Your Weekly Student Loan News: The Good, The Bad And The Hopeful
- Author: Jacob Greene
- Posted: 2024-05-23
The student loan debate continues throughout the United States while consumers, financial experts, politicians and others await President Joe Biden's decision about partial loan repayment forgiveness for the nation's more than 43 million federal and private borrowers. For some borrowers, the wait for a decision by President Biden has been too long:
Inflation, multiple adverse national and international events, continued supply chain problems and other concurrent natural and manmade catastrophes are driving borrowers further into debt and forcing them to make hard decisions when paying bills. New borrowers fall into student loan delinquency or default daily while trying to keep their housing and jobs and pay for necessities.
The Good
On Sunday, May 15, the graduating Class of 2022 at the diverse Los Angeles Otis College of Art and Design were shocked to learn that they no longer had to worry about their student loan debt as they went out into the world with their new degrees. Snap CEO and co-founder Evan Spiegel and KORA Organics founder Miranda Kerr made a massive donation to pay off the loans of all 285 graduates. Although the exact donation amount is currently unknown, the college has publicly acknowledged that it was greater than a previous record-setting donation of $10 million.
Spiegel and Kerr are honorary degree holders. Spiegel completed college-level classes for credit at the Otis College prior to pursuing a degree at Stanford. The couple issued a statement that they hoped the gift would "empower graduates to pursue their passions, contribute to the world, and inspire humanity for years to come."
Otis College president Charles Hirschhorn called the donation "life changing." More than 90% of students at the school receive some form of financial aid. The donation will cover loans that the college's financial aid office previously certified and, via a newly formed "Alternative Loan Debt Repayment Fund," any loans that graduates acquired separately.
In a statement, Hirschhorn said: "Student debt weighs heavily on our diverse and talented graduates. We hope this donation will provide much-deserved relief and empower them to pursue their aspirations and careers, pay this generosity forward, and become the next leaders of our community."
The Bad
Some borrowers outside of the college are feeling both happy and disgusted by this most recent student loan update. They're happy to see recent graduates receive a reprieve from crippling debt when starting out. Yet, they're also disgusted by so many people stating, given proof of past predatory lending practices at nearly every level of higher education, that they don't deserve forgiveness while observing a massive amount of consensus that the system has been broken for decades.
Their disgust also comes from watching students who didn't research certain for-profit schools enough receive total debt forgiveness for falling prey to scams while they're currently told that they made bad decisions for taking out student loans at all and don't deserve relief. They're observing new graduates receive relief in the form of gifts from private and corporate entities or universities that have reduced or eliminated entirely the costs associated with acquiring a higher education. Additionally, they've been forced to listen to many taxpayers who either paid off their own loans or never went to college openly express animosity toward them for taking out loans at all and believing that they should receive debt forgiveness.
These borrowers feel like they're a forgotten generation. They exist somewhere between the systemic old belief that low- and middle-class students had to take out expensive loans to achieve the American dream of a better life through higher education and new attitudes that education is a right that shouldn't put a student into a lifetime of debt. While everyone debates these ideas, they're stuck unable to achieve any dreams beyond survival.
The Hopeful
High-profile donations like the one made by Spiegel and Kerr to help the current generation of graduating college and university borrowers keep discussions about the abnormally high cost of education, systemic indebtedness and predatory lending alive and relevant. As long as the debate continues, there is still hope that current borrowers who fear being shackled to their loans for a lifetime, from graduation to death, will receive some sort of reprieve in the next few weeks from the Biden Administration or Congress. At the very least, the continued debate means that more positive changes to the system are likely by 2023 so that future graduates can pursue the American Dream without fear that their education efforts will leave them poor and enslaved by the debt they acquired while dreaming.
