Loan forgiveness to provide debt relief for some NU students
Sixth-year learning sciences Ph.D student Ally Reith currently owes $23,159.86 in student loans. But recently announced student loan relief will soon reduce that number by $20,000.
“This particular program will be life-changing for me,” Reith, a former Daily op-ed contributor, said.
Reith is one of about 95% of student borrowers who qualify for loan forgiveness through the student debt relief plan, the Congressional Budget Office estimated in June. The plan is designed to relieve up to $20,000 in student loans for individuals who make $125,000 or less, or couples making $250,000 or less. Federal Pell Grant recipients, like Reith, will qualify for $20,000 in relief.
While she will benefit from the loan relief, Reif said her debt is on the smaller side compared to other Northwestern graduate students. She supports the cancellation of all student debt.
“I don’t think this measure on behalf of the Biden and (Vice President Kamala) Harris administration is enough to atone for how broken the system is and how much student loan debt has morphed into this absolutely hellish bureaucratic monster,” Reith said.
Third-year plant biology and conservation graduate student Imeña Valdes said the $20,000 she will receive through student loan forgiveness will not even cover a quarter of her total debt. She said she wishes the government considered relieving a higher amount of debt.
Valdes said her loans are difficult to pay off since her department provides little financial support, unlike some other NU graduate programs.
Some economists, including former University President Morton Schapiro, have argued that student loan forgiveness should not apply to graduate students because they are statistically more likely to have higher incomes post-graduation. Reith and Valdes both disagree.
“There’s very little support for people who want to just get a master’s, and I don’t think that we necessarily will always end up in a higher tax bracket because a lot of entry-level jobs with entry-level salaries require a master’s degree now,” Valdes said.
However, Kellogg Prof. Nicola Bianchi said he thinks the student loan forgiveness plan is not intended for students from elite, private institutions.
For-profit schools — often with lower graduation rates — have contributed far more to the student loan crisis than schools like NU, he said.
“I think that the real reason why this reform was needed was to solve a problem in other parts of the higher education system,” Bianchi said.
Bianchi said the forgiveness plan could benefit lower-income students by making student loan payments more manageable. While the plan protects borrowers and taxpayers, he said it is still unclear how the policy will affect the overall price of a university degree.
Since elite institutions like NU grant a significant amount of financial aid, fewer students may be in urgent need of student loan forgiveness, Bianchi added. Sixty-one percent of NU students receive financial aid, according to the Office of Undergraduate Admissions, and the University will allocate $272 million in financial aid for undergraduate students during the 2022-23 academic year.
However, some undergraduates on financial aid still may end up taking out loans to cover uncovered costs, Bianchi said.
Weinberg sophomore Elle Jung is one such student. As a QuestBridge applicant, a national program connecting low-income youth with leading universities, Jung did not match with NU but was accepted during the early decision admissions cycle. Although she received financial aid from the University, she said she also had to borrow from NU.
Jung said she and her mother both planned to work in order to pay off the loans. However, because of the student loan forgiveness, she said she’s less worried about repayment.
“I wasn’t even supposed to get this (loan forgiveness),” Jung said. “I was supposed to pay all of that. So anything that will help, I am grateful for.”
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