Student loan debt payments are set to start back up again in October with student loan interest resuming earlier, in September. Loan payments are resuming after the debt-ceiling bill, passed on June 1st, 2023, prevented further student loan forbearance (a period of student loan forgiveness) following the end of the COVID-19 emergency on May 11, 2023.
In August 2022, the Biden administration introduced a one-time student loan debt relief program that sought to relieve up to $20,000 in debt per borrower. This June, the Supreme Court struck this down by stating that the program, enacted under the 2003 HEROES (Higher Education Relief Opportunities for Students) act, was unconstitutional. To put this into perspective, the average Class of 2020 graduate owed $28,400 according to NerdWallet (and it is also important to note that the $20,000 figure is a best case scenario; the average graduate would receive around $10,000). The Association of Public & Land-Grant Universities states that the median income for new graduates with bachelor’s degree was $52,000 in 2021, whereas the median income was $30,000 for high school graduates; this bump in income is a motivating factor in the financial decision of attending college.
“I plan on going to college after high school,” Vishnu Mahadasu ‘26 said. “I plan to pay for it using student loans, working for money, help from parents, and financial aid. College means I can most likely ensure a better job, which can allow me to pay back my student loans if needed.”
According to the Education Data Initiative, African American and Black graduates owe an average of 188% more than White students four years after graduation. This means that, for many, student loan debt can be seen as more of a social issue rather than purely an economic one.
Combining the two perspectives and focusing on the socioeconomic aspect of the student debt issue reveals that, according to the Federal Reserve, a graduated American that makes up to $39,000 a year owes an average of $36,120 in student debt whereas an American making up to $100,000 a year owes an average of $40,550. It is clear that, when looking at the debt-to-income ratio, that Americans that earn less money (and are less fortunate) owe more debt relative to their income than more well-off Americans.
“More unfortunate students may not be able to pay their debt back,” Shardul Pandit ‘26 said. “There’s also not that many ways to get jobs in college. I think [student loan debt relief] is a good thing as it definitely takes a big load off the student’s back, and I definitely think it doesn’t happen enough.”
Many young Americans are concerned about the financial situation that they could be put in after taking on such a large debt, fearing a “trap” of payments and interest.
“I think it’s one of the largest traps a young adult can get themselves involved with,” Dean Robertson ‘26 said. “[Student loan debt is] a very large amount of debt to incur at such a young age that will follow you to death, even through bankruptcy. The resuming of student loan repayments will probably affect people very negatively since the payments would reduce their income.”
