Student loan debt is one of the heaviest burdens on people in the United States. It’s become a hot topic again during the 2020 presidential campaign, and understandably: it’s something that keeps millions of Americans in debt to the government or private financial groups. Additionally, defaulting on student loans can amplify this burden by hurting credit scores for years to come.
Earlier this month, U.S. Representatives Deborah Ross (NC-02) and Alma Adams (NC-12) joined two of their House colleagues at a press conference for a package of bills that would change the national student loan debt landscape by helping borrowers. get back on track. The trio of bills – the Clean Slate through Repayment Act, the Student Loan Rehabilitation and Credit Score Improvement Act, and the Clean Slate Through Consolidation Act – are designed to improve the credit scores of those who have defaulted on their loans but which are now being caught up in payments. On top of that, the Joe Biden administration just delayed student loan collections for the fifth time in two years and canceled defaulted loans for about 8 million borrowers.
“Our Clean Slate bills will remove some of the greatest obstacles students face in their pursuit of the American Dream,” Ross said at the April 5 press conference. “We want to make sure these Americans can achieve all of their goals – whether it’s buying a home, owning a car, starting a business, paying for their wedding or saving for the future.”
What Ross and Adams are advocating is not enough to address the enormous student debt burden facing North Carolina residents, but it is badly needed legislation. Currently, it takes about seven years for a defaulted federal student loan to be erased from your credit report after you pay it off. According to Ross, these bills would require the Department of Education to require consumer rating agencies to remove the defect after reimbursement.
There are 46 million Americans trying to pay off $1.75 trillion in student loans. Breniecia Rueben, a technician in Raleigh, was one of those people. Her loans were relatively small – around $5,000 – but she couldn’t repay them without graduating. When she started evaluating her life in 2020, she realized that her delinquent loans were weighing on her.
“I was trying to fix my credit rating because at the start of the pandemic I was like, ‘I want to buy a house, I want to do all these things,’ but I was starting from scratch,” Reuben said. me.
After getting information from a friend who had also rehabilitated their credit score, Reuben was able to refinance his student loan payments to something more affordable. She wouldn’t have known about this program if not for the help of the community, and now she’s trying to help others looking for similar help.
Although she got her loans paid off, which improves her credit rating, it will be seven years before the default disappears from reports completely. She sees the benefit of dropping them sooner, but she also sees where it would help everyone to forgive student loans en masse.
“If there was loan forgiveness, it would affect people who don’t really have a lot of money now,” she says. “Because all of our money goes to loan repayments.”
What Ross and Adams suggest is good, but we shouldn’t settle for “good”. We must strive for the best outcome for everyone and further cancel the trillions of dollars in debt.
Sara Pequeño is a member of the editorial board.