Hi everyone, it's West Kasova. We want to bring you something new this weekend and introduce you to one of our favorite podcasts from WAMU and NPR. The one A podcast, hosted by Jen White, looks beyond the headlines to get to the heart of the story. Bloomberg News collaborated with one A this week for a series called Life and Debt.
The series explorers debts big and small, from the federal debt ceiling to the impact of credit cards, medical debt, and student loans, and today's show is all about student loan debt. Currently, the Supreme Court is deciding the fate of President Biden's student relief plan, and at the same time, the pandemic arapause on student loan payments is set to end. Here's Jen with more.
It's a weight felt by over forty three million Americans and that includes many of you.
I graduated with my PhD at over one hundred and fifty thousand dollars in debt federal debt, student loans, and an additional twenty five to thirty thousand dollars in private student loan debt.
I have about one hundred and forty thousand dollars in student debt. I am a first generation lawyer.
I have over eighty thousand dollars in student loan debt, most of which is interest, and there is vertal chance I'll be able to pay it off anytime in my life.
Those of us in Generation XT we did take out student loans. And meanwhile, we do also have children that are on their way to college or are in college right now. And if we could get some relief in our unsudent loan debt, it will be really helpful in letting us have the opportunity to help pay for our own children instead of adding more and more onto student learn debt among all of us.
According to the Education Data Initiative, the average student loan debt balances upwards of forty thousand dollars and the cost of college keeps rising. Over the past twenty years, college tuition at in state public universities has risen one hundred and seventy five percent. The numbers can be dizzying, especially for recent high school grads. The Supreme Court is set to decide the fate of President Biden's student debt relief plan. At the same time, the pandemic era pause on student
loan payments is set to end. For over three years now, borrowers with federal loans haven't had to pay a dime, but it all may be about to change. For this installment of our Life and Debt series and collaboration with Bloomberg News, we take a closer look at student debt and what comes next. I'm Jen White. You're listening to the one, a podcast where we get to the heart of the story. Here to help us through it is Akaela Garth. She's a White House correspondent with Bloomberg News.
Betsy Mayott is the founder and president of the Institute of Student Loan Advisors. It provides free advice on student loans. She's been working in the student loan industry doing compliance and advocacy work for over twenty years. And Adam Minski. He's an attorney who focuses on helping student loan borrowers in their families. He's also a senior contributor at Forbes. Thank you all for joining us. So let's first just
parse out the student loan debt relief avenues. So first came the emergency pause for a student debt enacted by President Trump during the start of the pandemic. Adam explained that initial pause and how it's been able to be extended now for over three years.
Sure, of course, So President Trump initially, through executive authority, paused all payments and interest on government held federal student loans in response to the COVID nineteen pandemic in March twenty twenty, and Congress then codified that shortly after that through passage of the Cares Act, which was that large stimulus package that was passed as the economy started tanking
as a result of the pandemic. Now, Congress originally envisioned the payment pause lasting six months, but then President Trump and then subsequently President Biden used executive authority to extend the pause repeatedly beyond that original six months, and they relied on the Heroes Act of two thousand and three, which is an older piece of legislation that gives the Education Department pretty broad authority to modify or waive rules
governing federal student loan programs during times of an emergency such as a pandemic. So President Trump used that authority to extend the pause, and then President Trump and then President Biden followed suit after that.
Well, this week, Education Secretary Miguel Cardona's spook at a Senate hearing. Here's what he said.
And we're preparing to restart repayment because the emergency is period is over, and we're preparing our our borrowers to restart.
Okay, So preparing borrowers to start paying Betsy. When should people be prepared to start sending in that money?
Again, Well, we don't have the exact timeline yet, other than the last we heard that a prominent education had stated that the current pause would end either sixty days after the Supreme Court gives their decision on the Biden Harris det relief or by August, whichever comes sooner. So as far as when people should be prepared to actually have to hit that make a payment button, I'm estimating somewhere around September or October.
Adam, is there any likelihood of another extension of this pause on repayments?
It's a really good question, you know. So the COVID emergency has officially ended, and that's been a central justification of the repeated extensions of the relief. Now that that has ended, you know, they're certainly arguably is less of a rationale for extending it. That being said, the Heroes Act doesn't necessarily require that the emergency be ongoing for
relief to be granted under that statute. In theory, the administration could argue that the relief is still in response to that emergency and the harm caused by it, even though the emergency has technically ended. That being said, there's no signs as far as I'm aware that the administration is seriously considering a further extension. They are saying that they are preparing to return to repayment this fall. But some folks might remember that we've been through this before.
There's been several times where we were told that the pause this was the final extension, only for it to be extended again at the last moment. So I suppose anything is possible, but I think it would be prudent for borrowers to anticipate or return to repayment in September or October.
As Betsy reference, I want to get into the details of President biden Student Debt Forgiveness Plan BEFER sequila. How much of a priority is student debt relief for President Biden.
Student debt relief is something that was one of Biden's campaign promises when he ran for president in twenty twenty, and on the trail he made this commitment to cancel ten thousand dollars in student debt per borrower, and in pursuing this program, he even went beyond that to extend twenty thousand dollars in relief for pel grant recipients. And for those who don't know, those are people who are undergraduate students who basically display an exceptional amount of financial need.
And that commitment was seen as a pretty big deal, especially because Biden has branded himself as a moderate and this was an idea that had been talked about by progressives like Bernie Sanders for a year. So it was really seen as a shift of the center in democratic politics.
And one might ask, even though he.
Campaigned on this in twenty twenty, why the president waited almost nineteen months.
To release it.
And so there's a number of reasons why that could have happened, and one is we know that Biden's team internally heavily debated the merits of broad student debt cancelation, and then the president had also hoped that Congress might
act on its own to pursue debt relief. Another reason on the timing potentially is because the policy isn't popular with some moderate Democrats, think Joe Manchin and the White House may have been waiting to pass some of its key legislative pieces, like the Inflation Reduction Act before introducing this plan, in order to avoid upsetting some of those lawmakers. And lastly, because it was released in August, just months before the midterms, it was also viewed as a way
to energize the base. So, whether it's all or some or those of those reasons, waiting nearly two years could have hurt the administration's legal argument here because they were relying on the pandemic. And as you know, my other panelists noted earlier that relief for that emergency declaration has now ended just about a week ago.
Adam, can you give us just a brief rundown on the cases before the Supreme Court holding up Biden's student loan forgiveness plan.
Yeah, so, I mean before anyone could actually receive any student loan forgiveness under this plan, there were a number of legal challenges trying to stop it. Most of those challenges were tossed, but two of them resulted in the program being blocked, and then the Biden administration appealed those decisions to the Supreme Court, which agreed to take up the cases. The two cases are somewhat different but similar
arguments essentially so. The first case involves a coalition of Republican led states which are arguing that the debt relief plan would financially harm a state related loan servicing entity called Mohila based in Missouri, and that harm would in
turn then harm the finances of the states. The second case involves a couple of individual borrowers who aren't entitled under the rules of the program to receive the maximum amount of forgiveness, the twenty thousand dollars, and they're arguing that the way the program was established prevented them from publicly commenting on it and participating in the regulations, and that has harmed them as well. The two major legal questions though in both of these cases number one whether
the program, of course is legal. Just like with the payment pause, the Biden administration relied on the pandemic authority
under the Heroes Act to authorize the program. But the second question, and arguably the one that ultimately might be the issue that decides the cases, is the issue of standing whether the challengers who brought these cases in the first place can demonstrate a harm that is both concrete and directly tied to the program that would entitle them to the relief they're seeking, which is striking down the program entirely for everyone.
A Kayla, Those are the Supreme Court cases. But Republicans are taking game at student debt relief in multiple bills. Explain what they're doing.
Yes, Well, I would say that this plan has received pretty universal opposition from Republicans since the White House has announced it, and there's basically two avenues in Congress right now that they're pursuing to cancel or nullify this program. One is through McCarthy's proposed debt limit bill and also through a separate bill that hopes to nullify it. Both of those face very small chances of succeeding, but that's what we're seeing in Congress.
Okaylo, Why do Republicans say they don't support this student debt relief plan.
Well, one of the reasons that many Republicans raise is they say that that price.
Tag is just simply too high.
The Congressional Bushet Budget Office estimates that just debt cancelation alone could cost the government as much as four hundred billion dollars, and coupled with the program's new income driven repayment program, which basically slashes monthly payments for barers, it could be closer to six hundred billion dollars according to their estimates. So they say, in an inflationary environment, it's
just not a responsible use of money. Now, I should note that economists are divided over whether it would actually impact inflation, but nonetheless, Republicans would rather see that amount of federal money left alone.
Some of them also just say they don't believe the president has the authority.
They say that the Constitution doesn't grant him or President Biden specifically that kind of power.
They say that only Congress has this power.
And lastly, they think that it's unfair to people who chose not to pursue college because of how expensive it was, or chose to be a service member or.
Go the military route.
And we know that Republicans their base tends to be people who are low income, blue collar, and so for them, this is just simply not popular.
Politically, Betsy.
When we're talking about President Biden's plan, the one that's before the Supreme Court, right now, how far will it go to relieving some of this debt pressure from students if it goes through. We're not talking about wholesale giving people just you don't have to pay anything back. It's just a portion, right.
Well, for some people it will.
It would mean if it were to make it through, it would mean all of a sudden having a zero balance. And those people tend to be people that either have been paying their loans since the earth cooled, or people that have lower debt balances to begin with. And while that might seem unfair, I personally appreciated the mindfulness of this because, believe it or not, people with lower balances from the onset actually tend to have a higher default
rate than those with the six figure balances. And the reason for that is the vast majority of borrowers that end up that come out of school with lower student loan balances, it's because they never finish their degree. So these are borrowers that have debt and no degree. So it could have a life changing impact, even though it's for some borrowers that end up with the six figure amounts it might just be a drop in the bucket.
Well, we also hear from a lot of people who talk about the interest they pay on loans and how that interest amount sometimes is more than what they actually took out in the first place. Can you explain that.
Yeah, so we hear about that a lot, you know, especially one of the features of the COVID pause is not only did it pause payments, but it paused interests. Those people have been enjoying a zero percent interest rate, And I hear from a lot of borrowers saying, you know what, if forgiveness goes through, great, but if they could keep the interest at zero or reduce the interest, that would be a much bigger impact on my overall
repayment success. You know, federal student loans have a pretty unique feature where you can get payments that are lower than what your typical ten year term would be payments based on your income and so on. The benefit of
that is that it keeps the payments of wardable. But the negative of that is it extends the term and therefore the amount of interest that you're paying on your loan, which is why we're hearing all these stories of people who have paid back much much more than they've borrowed, but yet still have a balance.
Now, President Biden is looking at other ways to lighten the student debt low. The Department of Education is canceled more than sixty six billion dollars in debt under programs already put in place. Adam, what are some other options for borrowers who are looking for relief?
Yeah, I mean, the good news here is that despite the block by the federal courts, right now is the Supreme Court considerers whether to uphold or strike down Biden's one time cancelation plan. There's all these other programs that are already working for people. One of the big ones that's been in the news a lot lately is something called the Limited PSLF waiver, which stands for the Public
Service Loan Forgiveness Program. This has been a long troubled program that can provide loan forgiveness to folks who commit to careers working in nonprofit and public organizations. After ten years, it's had a whole bunch of problems, rules that are complex,
poor servicing. So the Biden administration relaxed a lot of those rules and allowed more people to qualify, and the result has been something like six hundred and fifty thousand barrowers I believe have gotten their loans completely discharged under that waiver. There's also a new initiative going into effect as we speak, called the IDR Account Adjustment, which waives some rules and requirements for folks seeking loan forgiveness under
income driven Repayment plans. There has been a streamlined data sharing initiative to make it easier for disabled borrowers to get relief through the Total Permanent Disability Discharge Program, and the administration has also released new regulations governing a number of loan forgiveness and discharge programs, including Borrower Defense to Repayment, which is a program designed to help people who were
defrauded by their schools. A lot of these new regulations, which are set to go into effect this summer, will make it easier for to apply for and receive relief under a number of these programs.
Betsy, what about at the state level? What program should browers be aware of that could offer them some debt relief?
So, you know, as Adam mentioned, some of the most well known student loan forgiveness programs such as Public Service loan forgiveness and the Income Driven Plans. But what a lot of people don't realize is there's actually over one hundred student loan forgiveness programs many. I would go so far as to say most states have some sort, if not multiple, student loan forgiveness programs. A lot of them
are based on profession. There's quite a few for the people in the healthcare industry, or teachers or public defenders. But there's also some sort of unique ones, such as the state of Kansas that offers student loan forgiveness just for moving to Kansas. So we have a database of those forgiveness programs on our website, but just using your Google skills, you'll come across quite a few of them a Kuila.
How much will student debt play a part in the twenty twenty four presidential election?
If you look at polling, the electorate at large, attitudes.
On student debt is pretty mixed.
But if you look at specific demographics like black voters, Latino voters, and particularly young voters, that calculus changes and the policy is pretty popular with those groups. Young voters specifically turned out to be very influential in the midterms, and they were in twenty twenty as well for Biden. But polling shows that while the issue is important for young voters, other issues still were more impactful to their
vote in the midterms. This Harvard youth pull for voters between eighteen and twenty nine showed only nine percent of young people said student debt was within their top two most important issues, so other issues like abortion, climate change,
inflation were still more important for that voting block. But at the same time, the vast majority of a young America and want to see some kind of government action, and the voters of tomorrow pool show that young people know about Biden's student loan forgiveness program more than any of his other policies. So while it may not necessarily
drive their vote, it's still top of mind. And it's hard to imagine that if the Supreme Court does strike down this program that there won't be disappointment here well.
Education Secretary Miguel Cardona said that restarting payments will be unprecedented and quote a huge lift for our team. Adam, what logistical concerns do you have if and when those payments start up again?
I have plenty. You know, there's a couple of sides of this. You know, there's the fact that you know, something like forty million borrowers have not had to make payments on their loans or frankly even look at their accounts in many cases for over three years, and a lot has changed during that time. The financial circumstances may have changed, someone may have gotten married or divorced, their job has changed, The loan servicing industry has gone through
a lot of change. Millions of borrowers have had their accounts shifted over to new services during that time. The Department of Education is also, unfortunately facing a bit of a cash crunch. They were flat funded, The Office of Federal Sternade was flat funded in the last budget. And so what's essentially happening is these loan servicers and the Department of Education have all these new programs to implement,
but no new money to do it. And some loan servicers have actually started laying off workers and cutting customer service hours. And so it's creating what could be a perfect storm of problems where you have millions of borrowers simultaneously all resuming repayment, which has never happened before, while the Department of Education and the loan servicing system is frankly about to buckle without enough resources or funding or staff to handle it. It could be a real problem.
I have concerns, and a lot of other consumer advocates have serious concerns as well.
Betsy, how are you preparing borrowers for potential care.
Well, to speak to Adams comments, I'm suggesting that they prepare for the worst and hope for the best. Put their patients pants on is another way I put it. But make sure they know who holds their student loans. Log onto student aid dot gov and they can get a list of their federal student loans and who's currently
the servicer. Make sure their servicer has their current contact information, and then to make sure they don't miss any important information or deadlines, open all the things you know, open all the letters, open all the emails, and finally get an idea. Now what your monthly payment's going to be, and if it's not a number that is affordable and
that'll fit in your budget. Utilize the tools available at student aidc Gov in other places to figure out which payment plan will best fit your budget and get your paperwork in for that.
Well, one thing you wanted to mention, Betsy with the return of payment is also the potential resurgence of scams. What should burrowers be looking out for well.
Unfortunately, all these great programs and improvements to student loan regulations that have happened in addition to is out and put it the perfect storm that could be on the horizon for student loan repayment. This is a Birthday, Thanksgiving, Easter, and Christmas for the student loan scammers. It gives them a lot of what sound like reasonable talking points to bate potential victims of these student loan scams. The bottom line is, if it sounds too good to be true,
it probably is. And maybe even more important, you never have to pay for student loan advice or for access to a program or a repayment option that you wouldn't normally be eligible for. There isn't a person on the planet, including the people on this program today, that can get you access to a benefit that you can't do yourself directly through your loan servicer.
In just a moment, we'll hear from Democratic Congresswoman Aana Presley. She cosponsored a bill urging the use of the Higher Education to cancel student loan debt. Akaylab, what are you hearing about that option?
Me and my colleague Nancy Cook, I've been reporting that the administration is under pressure to basically use that act as a plan B in case they're not successful in the Supreme Court. So I'm definitely interested to hear what the congresswoman has to say about that option.
Akayla Gardner is a White House correspondent with Bloomberg News. Thanks for being here. Let's take a moment and go back to our voicemail box. We get this message from one of you.
The student loan crisis in this country has gotten to the point where it's just ridiculous to think that someone might be against just forgiving it all. I personally have very little student loans compared to some other people I know, and I won't get as much from this forgiveness, but even the amount I'm getting would be incredible.
Let's add another voice to the conversation. Congresswoman Ayana Presley joins us now. She's a Democrat representing Massachusetts seventh District. Representative Presley, thanks for joining us.
Good to be with you.
So Republicans are seeking to thwart President Biden's student debt forgiveness plan. A house GOP build targets President Biden's proposed income driven repayment plan. This issue was turning out to be a hard fight for Democrats. How confident are you that student debt relief will be a reality?
Well, look, we fought for years to get this done and to move student debt cancelation. This was an issue
that people tried to fringe and marginalize. We worked for over two years to build a big and broad and diverse coalition of borrowers and union families and workers and presidents and civil rights organizations the number one issue for the NAACP in fact, and ultimately President Biden acted being responsive to the demands of that coalition, but to the needs of the people burden by this nearly two trillion
dollar crisis. And the President acted and by executive action with the stroke of a pen, wanting to provide this transform to relief for some forty million plus people, those with PEL grants twenty thousand dollars canceled, and NONPEL grant recipients ten thousand dollars. This is an economic justice issue. It's a gender justic issue. Nearly two thirds of this
two tillion dollar crisis or war by women. And it's a racial justice issue because black and brown and black bars in particular borrow and default at higher rates, and so this will zero out for one in four black borrowers. This stands to zero out their debt completely.
But again, congresswomen, right now, we know there are two cases in the Supreme Court around debt relief. We know the GOP has a number of bills targeting this proposal from President Biden. Will this be a reality for people who are facing this debt? Is this going to happen? Do you think?
Well, Listen, people did not think we'd get an executive action on student debt cancelation. So I'm always going to to fight the good fight, particularly on an issue as consequential as this one. This debt is choking people, and it's not just a millennial or Gen Z issue, and it's disingenuous for people to say, well, I did it and others can too. We should want more and better
for the next generation. But moreover, I have seventy six year old in my district on fixed incomes who are worried they're going to die, are still paying on this debt, and at this time they are paying more than they even borrowed. Educators who have confided with me about suicide ideation. The psychological toll of this debt, debt they took on because they want to teach our babies, and they can
barely meet the monthly minimums. I'm not surprised that the GOP is doing everything in their power, you know, and have many co conspirators in that effort, unfortunately, to obstruct and overturn the will the majority.
Of the people.
I understand where it is with the Supreme Court, but the legal case is sound. President Biden has the authority. This is transformative, life changing relief for some forty million plus people, and the case is the legal case is sound.
I want you to hear from one of our listeners.
We need to be fiscally responsible for our debts and going on to college, one should expect if you cannot pay in full that there will be a balance at the end of your college time. I also feel that the money that the government wants to spend in relief would better be spent on the high schools and counselors, constructing parents and family and perspective students.
As you've alluded to, Congresswoman, you've heard this argument before. People take out house loans and credit card loans and they aren't given relief. Specifically when we're talking about taxpayer money, and we should note that about eighty three percent of American adults don't have student loans. What is the art you make for providing relief through taxpayer money for those who did take out loans?
Jen, Again, this is an issue of consequence that is affecting people from every walk of life. It is destabilizing families, choking at really the promise of our families, our communities, and this country. And it's disingenuous to use really a dated comparison that is hardly an apples to apples comparison. You can't say we live in a meritocracy and that education is life's great equalizer when we have put it
farther and farther out of reach for people. The cost of higher education is increased by one hundred and fifty percent. So I agree that there are other there's other work that we need to do. We have to expand pell grants, we have to invest in HBCUs, in vocational education, there are so many other ways that we need to get at this.
But it's not or it's both.
And because again, this is impacting people from every walk of life, from seniors to new parents. And again to disparate impact on black and brown communities. For example, Black Americans have been locked out of every major federal relief program in this country, from the GI Bill to the Homestead AD. Are families targeted by redlining, denying us the ability to build generational wealth, which is why we borrow at higher rates. So this is an economic justice issue,
it said, gender justice issues, or racial justice issue. These legal challenges that have been mounted are nothing more than frivolous partisan attempts to prevent what is a legal, popular, and sorely needed policy from going into effect. The Supreme Court should uphold the law and affirm the president's authority to cancel student debt.
You're a co sponsor of a bill calling for President Biden to use an executive order to cancel up to fifty thousand dollars for federal loan borrowers.
Now.
In twenty twenty one, House Speaker Nancy Pelosi said in a press briefing that President Biden couldn't forgive student debt even if he wants to. There's disagreement over the of the president's authority to fully forgive student loans. What's your argument for why he has that legal authority.
Well, the President has the legal authority.
It's been given to him by Congress, and the same authority that was used to pause student loan payments during the pandemic, which myself and others advocated for. It's the same authority. So the legal cases sound. The President has acted being responsive to the demands of this broad and diverse issues based coalition, but moreover, responsive to the needs of the people. And executive action is the most direct
and precise way to get this done. And the legal authority is clear, and the President, I'm grateful he's made a commitment. Regardless of the court his should find a way he will to get this done.
If the Supreme Court rules against Biden's plan, what other options does Congress have to keep pursuing student loan forgiveness.
Look, I'm a firm believer that organized power is realized power. We've seen that over the last two years, and that people did not even think we would get to the point of executive action on student debt cancelation. So you know, as an organizer, I you know, I don't suffer for contingency plans. I always have one, But at this time I'm not seating any ground the Supreme Court should uphold the president's legal authority. The authority is clear, and they should just uphold the law.
So I'm not seating any ground here.
As an organizer, I always have contingency plans, but you know we're not their Student debt cancelation is a popular policy, it's legally sound, it's deeply needed. It'll be transformational.
Uh.
When I think about the people that I've heard from throughout this country who during the pandemic spoke about the impact it had on their lives to have that pause on payments, and that was just during during the pandemic. Imagine just how transformational and game changing will be when we get this done for this forty million plus people who stand to benefit from this relief.
That's US Representative Ayana Presley. She's a Democrat and represents Massachusetts seventh district. Congresswoman. Thanks for joining us. Thank you, And we're talking about student loan debt and answering your questions with Betsy Mayott, founder and president of the Institute of Student Loan Advisors, and Adam Minsky. He's an attorney who focuses I'm curious to hear from each of you, your thoughts on the conversation we just heard with Congresswoman Presley. What stood out for you.
Well, you know this is you know, as she mentioned, this student loan forgiveness has been a really important issue for her office as well as, for example, Senator Warren's office. So I expected the messaging from her that we received, and you know, I agree that this forgiveness program, if it were to go through the Supreme Court, will be life changing for a lot of borrowers. I mean, going back to what I said earlier about the borrowers with the lower balances are the ones that struggle the most.
We're not talking just you know, sort of getting rid of a debt that someone agreed to so much. We're talking about people who this will make the difference of whether they can pay their light bill or not. So, you know, I agree that this form of student loan forgiveness can be transformational, especially to the most marginalized borrowers.
Adam, briefly your thoughts.
So, you know, one you know, very interesting question here that we heard a little bit from the congresswoman on was you know this idea is is there going to be a backup plan, a contingency plan if the Supreme
Court does wind up striking down the program. There has been a push by a coalition of consumer advocacy groups and some legal experts to get the buy An administration to consider essentially reissuing the program under a different legal authority under the Higher Education Act if the Court down
the program under the Heroes Act. The Higher Education Act has its own provision that arguably could provide some authority to the Education Department to cancel student debt, and the Administration is actually cited to that authority in a different context involving broad student loan cancelation. So I think it's an interesting question. What will the Biden administration do if the Supreme Court rules against them? Is there a backup plan and what would it look like.
Let's go back to our voicemailbox.
Hello, my name is Blake calling from Oklahoma City, Oklahoma. Essentially, I think the answer to the student loan debt crisis is to move towards interest free loans. Doesn't make any sense for students to be patting the pockets of any lenders just to get an education, and in fact, we're already seeing what that does to people on the other end. It cripples the economy, and it cripples it kind of
mortgages the future. So I think if we can get towards an interest free type of world where the loans are basically backed by the federal government not by private lenders, that would be best for everyone.
Adam might love to hear your thoughts on that, well.
I mean, one of the problems is that even for government issued loans, the government is charging an interest rate.
We've heard several times throughout this discussion that one of the biggest complaints from borrowers is that you can pay back essentially everything that you borrowed and still owe an enormous balance because of how interest works and how interest can accrue in excess of your payments, and interests can accrue and be capitalized during certain periods, and if something bad happens, like you slip into default because off a hardship, then even more fees are at it as well. It
can really become a hopeless situation. I definitely do think that we need interest reform. One of the nice features of the proposed overhaul of income driven repayment by the Biden administration is that it would actually waive any excess interest that a cruise above and beyond a borrowers monthly student loan payment. So that's one example of I think a broad away array of interest fixes that we need for the student loan system.
That's Adam Minski. He's an attorney who focuses on helping student loan borrowers and their families. He's also a senior contributor at Forbes. Also with us was Betsy Mayott. She's the founder and president of the Institute of Student Loan Advisors. She's been working in the industry doing compliance and advocacy work for over twenty years. Thanks to you both. This conversation is part of our Life and Debt series in
collaboration with Bloomberg News. Throughout the series, we discussed the federal debt, sealing, credit card debt, medical debt, and more. Today's producer was Michelle Harvin. Barbon Guiano produces our podcast. This program comes to you from WAMU, part of American University in Washington, distributed by NPR. I'm Jen and White. Thanks for listening, and we'll talk more soon. This is one ASP