She'll be visiting other states
to hear from panels of
democratic voters as well.
Geoff: In just a matter of days,
the U.S. Supreme court is
expected to rule on whether
president Biden's plan for
student debt forgiveness can go
forward.
It comes at a major moment for
borrowers who may have to
restart those loan payments this
fall.
William brangham gets some
perspective about those concerns
and what borrowers may need to
think about.
William: The president's plan
would forgive as much as $20,000
of student loan debt for many
borrowers.
Before that plan was put on
hold, over 16 million people
were approved for that
forgiveness.
If enacted, that could cost the
government as much as $400
billion.
While that's been playing out,
for three years
since the start of the pandemic
, interest and principal
payments on federal student
loans have been paused, but
they're set to resume in just a
few months.
All this has left a lot
borrowers worrying about what's
ahead.
Here's what a few of them told
us -- and none of these people
are just out of school.
They work in education, and for
local government agencies.
>> My name is Carolann fry.
I live in Portland, Oregon.
>>, Located in Delaware.
>> If the supreme court ends up
striking down the Biden
forgiveness program, it is just
going to prolong the things I am
looking forward to in life,
being able to retire sooner,
helping my son who is 11 to be
able to go to college.
>> Won't be able to put money
into savings, which is very
scary as a person living
paycheck-to-paycheck.
>> I think having that burden
come back without any type of
relief would be almost
catastrophic as costs and prices
have gone up and the cost of
education has gone up over the
years.
>> Paying almost $400 a month
for the next 12 or 13 years is a
lot of money.
>> I think that my payments will
be about $400 a month, which is
a significant amount of money
for me.
I live alone.
>> Finances would have to
tighten up.
There would almost be a bill due
instantly and a lot of money
that for me personally is a lot
of money.
>> I do see the benefits of
going to college, however, it
needs to be a very financially
stable way to do things.
>> Getting the college education
was key to me having stability
in my life.
I had to take out the debt.
>> Undergrad total cost me
$25,000.
If my children decide to go to
university, it will cost
$125,000 for the same
university.
>> Even with the $25,000 in
front of the supreme court and
for I would still have 30 --
$30,000 left over.
>> The pause has allowed me to
put money other places for the
rising cost of rent and food and
everything and incorporate a
payment of $300 back and by
budget every month would be
almost the same as if I bought
another car.
>> We elected president Biden
with this promise of student
loan forgiveness and I do not
know when he promised that if he
fully knew he could go through,
we were all just hoping, but it
is looking bleak and there are a
lot of people who are
significantly depending on the
forgiveness and to have the rug
pulled out from underneath them
will not be a good look.
William: Given the potentially
significant changes, we wanted
to get some perspective on how
borrowers ought to be planning.
Julia carpenter focuses on that
for the Wall Street journal and
she joins us now.
Julia, thank you so much for
being here.
As we were hearing, the federal
student loan payments were
suspended at the start of the
payment -- pandemic and then
they kept getting renewed and
renewed.
Is there any chance they could
get renewed again?
>> President Biden said earlier
this year there is a supreme
court decision looming on
forgiveness and it is almost
impossible we would see another
delay.
Some payments are set to resume.
William: How many people are we
talking about that will suddenly
see payments due?
>> Millions.
Fewer than 2% of borrowers
continue making payments on
student loans during the pause
and everyone else took it the
pause as an opportunity to get
finances in order during the
pandemic or break an interest so
30 million people will see
accounts resume as of August.
William: So what did people do
with the savings?
Did most people just spend more?
Inflation obviously chewed into
some of it.
>> A lot of borrowers saved it.
They said this is my chance to
put his money away, stop -- put
this money away, stock up the
emergency fund.
But a ton of borrowers said it
just disappeared based on
grocery bills getting higher and
gas costing more and the money
they had earmarked for student
loans was taken up by day-to-day
expenses.
William: So separately the
supreme court ruling is coming
any day.
Can you remind us what president
Biden wanted to do and then what
the court might do?
>> The original plan promised
$10,000 to borrowers with
federal student loans with
income under $125,000.
If you were a Pell grant
recipient you were up to --
eligible for up to $20,000 in
forgiveness so qualified
borrowers would see their
balance lowered as a result of
the plan, -- plan.
William: I know you are not a
financial advisor but you talk
with a lot of them in your job.
What should people be doing who
might have certain -- sudden
payments reappear on balance
sheets?
What should they do in advance?
>> Every financial advisor said
hope for the best, plan for the
worst.
If you are a qualified borrower,
the financial advisors say to
plan as if you will not be
getting forgiveness.
That way should it be ruled as
constitutional, you will -- in
constitutional, you will have
planned in advance.
Look at where you can cut or
reallocate or move money in
order to free up room for the
payment to be reabsorbed is the
best case scenario and if it is
ruled constitutional and you
receive forgiveness, you have
planned for the worst and you
will be taken by surprise.
William: Do you think borrowers
get enough advice and education
to understand how interest
payments work and what they are
really signing up for?
>> I always ask that question
when I interview borrowers.
When they are 18 and deciding to
go to college and how to pay it
and every person says they
wished they had greater
education at that time.
William: The point of going into
debt is to go to college and you
can theoretically get a better
job and better income and pay
off the debt.
How has not panned out for
people?
Has it been -- how has that
panned out for people?
>> People with college degrees
attain higher incomes but what
we do not know is how student
loan balances are stacked
against the income over time.
If you accrued debt as a result
of attending some college, they
are often the people who hurt
the most.
William: Critics of student loan
forgiveness argue, you know what
you were signing up for.
It is not the governments job to
bail you out.
What do advocates of forgiveness
say in response to that?
>> I speak with a lot of
borrowers who say interest is
the enemy.
They watch the student loan
balances grow and income has not
kept up with the payments,
earning power is stagnant and
they would love nothing more
than to be able to pay down
their loans but as a result of
interest are not able to.
William: Julia carpenter of the
Wall Street journal, thank you
so much for helping us with
this.
>> Thank you for having me.