State universities would be responsible for portions of students鈥� defaulted loans under legislation advanced Wednesday by an Iowa House subcommittee.

would require state universities to offset 25% of a borrower鈥檚 liability if they default on an educational loan taken out to attend the institution. This means the university would be liable for 25% of what the student owes.

More than 40% of Iowa public college graduates finish their education debt-free, Iowa Board of Regents State Relations Officer Jillian Carlson said, and those who do take out loans receive financial counseling early in their college career 鈥渢o help them right-size their debt and advise them on not taking out more than they need.鈥�

鈥淥ne question or concern that we do have is to clarify whether students who default on their loans are actually defaulting because they鈥檙e unable to make the payments, versus defaulting on their loans because they know that we would pick up 25% of the bill when they actually do have the resources to make the payments,鈥� Carlson said.

Rep. Heather Matson, D-Ankeny, said there are important, practical questions on the topic of universities potentially being liable for defaulted loans that are not answered in the bill, such as where the money to take on these debts would come from. She also asked whether it should be the responsibility of a university to 鈥渂e on the hook for鈥� part of a loan in certain situations, like if a graduate finds themself in medical debt and must decide how they鈥檒l use their money to stay safe and healthy.

鈥淚 think it鈥檚 important to recognize that the majority party talks a lot about personal responsibility, especially when it comes to student loans,鈥� Matson said. 鈥淪o I鈥檓 curious as to why you all are proposing to put a graduate鈥檚 financial decisions back onto a university if personal responsibility for student loans is so incredibly important.鈥�

Rep. Jeff Shipley, R-Fairfield, said during the subcommittee meeting he believes the idea presented in the bill has 鈥渟ome merit.鈥� He and subcommittee chair Rep. Taylor Collins, R-Mediapolis, approved the legislation to move to the Iowa House Higher Education Committee.

鈥淢y general thoughts are, we need to make sure we have some skin in the game when it comes to 鈥� the future employment of these individuals, once they graduate,鈥� Collins said.

is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: info@iowacapitaldispatch.com.

The Trump administration is authorizing the Department of Education to remove nonprofits from the Public Service Loan Forgiveness program if deemed to have 鈥渟ubstantial illegal purpose.鈥� This change puts the entire public service ecosystem at risk. At a moment when America desperately needs more teachers, nurses, social workers and legal aid attorneys, we cannot afford to strip away one of the strongest incentives for talented, service-minded people to choose these careers.

Under the new rule, organizations could lose PSLF eligibility based on a vaguely defined 鈥減reponderance of evidence鈥� that their work conflicts with administration priorities. Entire institutions could be banned if one department is accused of crossing an undefined line. That means workers who鈥檝e made years of qualifying payments could see their progress erased with no opportunity to respond and no right of appeal.

This is a direct threat to the stability of the public service workforce that holds our communities together.

Consider Equal Justice Works Fellow Cecilia Ballinger, who serves families in rural Alabama. In a region where hospitals and schools are closing and where even basic needs such as transportation or internet access are hard to come by, Cecilia helps children with disabilities secure vital services. Her advocacy extends far beyond individual cases; she is empowering entire communities to push for change. Without PSLF, advocates like Cecilia will be in short supply as fewer students will take on the financial burden of pursuing public service careers entirely.

Public service workers already face financial obstacles that keep too many Americans from pursuing these career paths. For instance, a starting public interest attorney around $69,000 annually 鈥� about one-third of what their counterparts at a large private firm can make 鈥� while likely carrying six-figure student loan debt. Teachers, nurses, social workers and other public servants face similar choices between lucrative careers and mission-driven ones. These gaps are even starker in rural and underserved communities, where salaries are lowest but the needs are greatest.

PSLF is a critical bridge, ensuring people who want to serve are not priced out of higher education opportunities. Without it, communities risk losing the very professionals they rely on most.

PSLF also establishes a sustainable workforce model. Because workers must make 120 qualifying monthly payments over a decade of service, while employed in government or eligible nonprofits, the program encourages professionals to stay long enough to master complex skills and meaningful community relationships. 

After those 120 payments are received, the remaining balance is forgiven, and those years of consistent service pays dividends. Students thrive under experienced teachers; patients are healthier under consistent care from nurses; and families benefit from social workers and legal advocates who understand their challenges deeply.

The fallout of these loan forgiveness rule changes would be devastating. Underserved communities would feel the brunt of it, with justice deserts widening, health care access shrinking and classrooms left without experienced teachers. Students of color and low-income students who already disproportionate debt loads would face additional barriers to pursuing public service. And clients would lose advocates who reflect their experiences and fight on their behalf.

As if these dire consequences were not enough to make policymakers seriously reconsider hobbling PSLF, there is also a question of whether the department has overstepped. Congress created the program to ensure Americans who dedicate a decade of their lives to public service can do so without being crushed by debt. The Department of Education to rewrite that promise.

As of right now, the rule changes are set to take effect in July 2026 鈥� which means we still have time to change course. Weakening PSLF would push countless professionals out of fields that sustain our democracy and safeguard our future. Policymakers must protect this vital program 鈥� not just for the workers who depend on it, but for every community in America that relies on teachers to educate our children, nurses to care for our sick, and lawyers and social workers to protect our most vulnerable.

When public service becomes financially impossible for people to serve their communities, we all lose.

Over the past few months, Celina Damian鈥檚 phone has been ringing off the hook with one bewildered, anxious question after another: 鈥淲hat kind of loan is this?鈥� 鈥淎m I in default?鈥� 鈥淲ill the government really take my wages?鈥�

鈥淪ometimes they just don鈥檛 know where to start,鈥� said Damian, California鈥檚 student loan servicing ombudsperson.

鈥淚鈥檓 talking to borrowers from all ages, from new borrowers to 鈥� I have 80-, 90-year-old borrowers,鈥� she said.

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The federal government last month restarted collections on defaulted loans. State student loan ombudspersons such as Damian have become some of the only sources of contact for worried borrowers lost in a tangle of conflicting information at the federal level about their loan status and repayment options.

The U.S. Department of Education began collecting on defaulted student loans in May for the first time since the beginning of the COVID-19 pandemic in March 2020.

Federal student loans issued by the U.S. Department of Education come with . Private servicers handle billing, repayment-plan enrollments and defaults.

More than 5 million borrowers are in delinquency, and nearly 10 million 鈥� about 25% of the federal student loan portfolio 鈥� are at risk of default within months, according to data from the U.S. Department of Education.

States can鈥檛 cancel that debt, but they do register and oversee servicers operating in their states, run ombuds offices, tweak tax rules and offer outreach or limited grants 鈥� actions aimed at reducing defaults and the economic fallout.

When borrowers default, states will likely feel the economic impact. They might lose tax revenue as homebuying stalls. They could end up paying more for Medicaid and social services if borrowers need to rely on them. And students with loan debt may be reluctant to go into lower-paying public-sector work, leading to staffing shortages at state agencies.

A borrower is considered delinquent after missing a payment to the servicing companies that handle billing, repayment plan enrollments, and defaults.

Damian鈥檚 office, established under California鈥檚 Student Borrower Bill of Rights, began as a narrow statutory role but now serves as a hub for outreach, 鈥淪tudent Loan 101鈥� workshops and escalated complaints to federal agencies.

Roughly plus the District of Columbia have followed suit, creating ombuds offices to guide borrowers through confusing paperwork and misinformation. Damian believes these ombuds offices should be in every state, as borrowers across the country will likely have similar questions and little help at the federal level.

鈥淚f you don鈥檛 have an ombudsperson or even just a person at the state level who can educate borrowers, that will make a difference,鈥� Damian told Stateline. 鈥淭hese borrowers are trying to pay, but the system is broken. No other financial product works this way.鈥�

Student loans became a key issue during last year鈥檚 election race, with President Joe Biden blocked by the U.S. Supreme Court in his effort to offer relief to 40 million Americans. In its waning days, his administration did forgive loans for some 150,000 borrowers under previous programs.

But President Donald Trump opposes most loan forgiveness programs, and聽in May, the U.S. Education Department issued a , reminding them of their legal obligations to help former students understand repayment responsibilities and access support.

Some conservative economists聽 that federal loan forgiveness and financial aid hurt all students, offering colleges an incentive to raise tuition or lower their own institutional aid.

Winston Berkman-Breen, the legal director at the Student Borrower Protection Center, a nonprofit aimed at protecting borrowers and improving the repayment system, said that more than 2 million borrowers are stuck in a backlog of for ( 鈥� calculated pay structures meant to keep payments affordable based on a borrower鈥檚 income.

Other borrowers have called federal agencies for help only to find that U.S. Education Department staff, , have been laid off as the Trump administration works toward dismantling the department entirely.

鈥淭here was an expectation to repay,鈥� Berkman-Breen said. 鈥淏ut there was also an expectation that people would have access to affordable plans. That promise has broken down.鈥�

States now have three primary tools to address student loan debt, Berkman-Breen said: enforcement actions to protect consumers, such as the against servicer Navient; legal oversight by suing to uphold or challenge federal policy; and direct outreach to help public servants access Public Service Loan Forgiveness and similar programs.

Nineteen states now require registration for companies that service student loans, he said. And more than a dozen states align with federal policy to exempt forgiven loan balances from state income taxes.

鈥楥an鈥檛 wait for Washington鈥�

Connecticut state Rep. Eleni Kavros DeGraw, a Democrat, calls student debt 鈥渁 drag on the economy,鈥� and said states can鈥檛 afford to wait for Congress 鈥� mired in partisan gridlock over student loan forgiveness 鈥� to find common ground.

鈥淸Student debt] is stopping people from buying homes, starting families and fully participating in the economy,鈥� she told Stateline. 鈥淭hat hurts us as a state, as a city, and we can鈥檛 wait for Washington to figure it out.鈥�

Last year, Connecticut created a bipartisan that provides up to $20,000 for graduates of local colleges who make payments and complete community service. The state has distributed more than $2 million so far.

Kavros DeGraw hopes the program can serve as a model, and has already talked with lawmakers in other states on possibly developing their own versions of it.

鈥淭hese were people who were already paying,鈥� Kavros DeGraw said. 鈥淚t just made sense. I think it鈥檚 something that other states could explore this session, and it would provide an immense deal of relief.鈥�

Lawmakers in other states also have considered student loan legislation. This year, New Jersey introduced bills to and cap interest rates. Lawmakers in , and have proposed Borrower Bill of Rights legislation. Arizona has a registration bill for private servicers. None of these measures has advanced far.

According to the National Conference of State Legislatures, more than 20 states have enacted laws expanding loan forgiveness, repayment programs and servicer oversight in recent years.

Several states are also investing directly in workforce-aligned loan forgiveness: Georgia expanded its service-cancelable loan to cover dental students working in rural areas. Idaho created a loan repayment for rural nurses. Kentucky now offers $5,000 to attract new teachers. Maryland authorized Anne Arundel County to launch a local program for public school educators.

Repayment

Student loan stress is not . Seven states, all with Republican鈥恈ontrolled legislatures, report delinquency rates above 30% among borrowers required to make payments.

Mississippi leads the nation with a conditional delinquency rate of nearly 45% 鈥� meaning borrowers who should be making payments are late. That鈥檚 just ahead of Alabama, West Virginia, Kentucky, Oklahoma, Arkansas and Louisiana, all of which have rates above 31%, according to recent data from the Federal Reserve Bank of New York.

By contrast, Illinois, Massachusetts, Connecticut, Vermont and New Hampshire maintain delinquency rates below 15%.

Experts say this chasm reflects deeper systemic differences, such as lower median incomes in higher delinquency states, along with weaker consumer protections and a higher share of students attending for-profit institutions or leaving college without a degree.

States also have promoted the federal Public Service Loan Forgiveness program, established in 2007, that offers help to public service professionals. New Mexico has an outreach campaign that includes and health care workers. Maine has provided to public defenders on how they can take advantage of the Public Service Loan Forgiveness Program and touts a related state tax credit on a marketing to lure new residents.

鈥淪tates can regulate and enforce, but they can鈥檛 fix the structural problems in how repayment is administered,鈥� said Michele Zampini, senior director of college affordability at The Institute for College Access & Success, a research organization that advocates for students. 鈥淭hey鈥檙e helping around the edges, but the core system is still broken.鈥�

A November from the Consumer Finance Protection Bureau found at least 3.9 million borrowers received misleading or inaccurate bills from servicing companies.

鈥淭he repayment system is not in a good place to provide the services and repayment options borrowers are legally entitled to,鈥� Zampini said.

The Student Loan Borrower Survey, conducted between October 2023 and January 2024, found that 61% of borrowers who received debt relief made a beneficial life change earlier than they otherwise could have. Yet borrower awareness remains dangerously low: Nearly 42% of federal borrowers have only been on the standard repayment plan, and 31% of those didn鈥檛 know other options, such as an income-based plan, existed.

In California, a major part of Damian鈥檚 job in the past few months has been to help borrowers access existing forgiveness programs.

Meanwhile, new federal policy proposals could reshape repayment entirely. The Trump-backed would consolidate existing IDR plans into a single tiered structure, with lower-income borrowers paying flat monthly rates and higher earners contributing 8% of their income. The bill also proposes extending standard repayment terms to 30 years 鈥� raising concerns it could delay forgiveness and inflate total interest costs.

The bill passed the U.S. House and is pending in the Senate.

鈥業ncentive to hike prices鈥�

Andrew Gillen, a Cato Institute research fellow who recently testified before Congress, argues that any meaningful fix must address the incentives driving rising tuition 鈥� namely, federal aid being tied directly to college sticker prices.

鈥淭he link between rising tuition and increasing aid is what drives the Bennett Hypothesis, where federal student aid, in the form of loans, can lead to higher tuition costs at colleges and universities,鈥� Gillen said in an interview. 鈥淚f we instead use the median cost of attendance to calculate aid eligibility, we remove colleges鈥� incentive to hike prices just to capture more aid.鈥�

Even without agreement on blanket forgiveness, experts agree on smaller bipartisan steps: streamlined repayment, stronger servicer oversight and targeted help for borrowers with the greatest need.

鈥淲e don鈥檛 want people defaulting. We don鈥檛 want payments that are too high for people just out of school. That should be the bipartisan starting point,鈥� Zampini said.

is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

President Donald Trump said Friday that the U.S. Small Business Administration would handle the student loan portfolio for the slated-for-elimination Education Department, and that the Department of Health and Human Services would handle special education services and nutrition programs.

The announcement 鈥� which raises myriad questions over the logistics to carry out these transfers of authority 鈥� came a day after  a sweeping executive order that directs Education Secretary Linda McMahon to 鈥渢ake all necessary steps to facilitate the closure鈥� of the department to the extent she is permitted to by law.

鈥淚 do want to say that I鈥檝e decided that the SBA, the Small Business Administration, headed by Kelly Loeffler 鈥� terrific person 鈥� will handle all of the student loan portfolio,鈥� Trump said Friday morning.

The White House did not provide advance notice of the announcement, which Trump made at the opening of an Oval Office appearance with Defense Secretary Pete Hegseth.

The Education Department manages student loans for millions of Americans, with a portfolio of more than $1.6 trillion, according to the White House.

In his聽聽Trump said the federal student aid program is 鈥渞oughly the size of one of the Nation鈥檚 largest banks, Wells Fargo,鈥� adding that 鈥渁lthough Wells Fargo has more than 200,000 employees, the Department of Education has fewer than 1,500 in its Office of Federal Student Aid.鈥�

鈥楨verything else鈥� to HHS

Meanwhile, Trump also said that the Department of Health and Human Services 鈥渨ill be handling special needs and all of the nutrition programs and everything else.鈥�

It is unclear what nutrition programs Trump was referencing, as the U.S. Department of Agriculture manages  and other major nutrition programs.

One of the Education Department鈥檚 core functions includes supporting students with special needs. The department is also tasked with carrying out the federal guarantee of a free public education for children with disabilities Congress approved in the Individuals with Disabilities Education Act, or IDEA.

Trump added that the transfers will 鈥渨ork out very well.鈥�

鈥淭hose two elements will be taken out of the Department of Education,鈥� he said Friday. 鈥淎nd then all we have to do is get the students to get guidance from the people that love them and cherish them, including their parents, by the way, who will be totally involved in their education, along with the boards and the governors and the states.鈥�

Trump鈥檚 Thursday order also directs McMahon to 鈥渞eturn authority over education to the States and local communities while ensuring the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely.鈥�

SBA, HHS heads welcome extra programs

Asked for clarification on the announcement, a White House spokesperson on Friday referred States Newsroom to comments from White House press secretary Karoline Leavitt and heads of the Small Business Administration and Health and Human Services Department.

Leavitt noted the move was consistent with Trump鈥檚 promise to return education policy decisions to states.

鈥淧resident Trump is doing everything within his executive authority to dismantle the Department of Education and return education back to the states while safeguarding critical functions for students and families such as student loans, special needs programs, and nutrition programs,鈥� Leavitt said. 鈥淭he President has always said Congress has a role to play in this effort, and we expect them to help the President deliver.鈥�

Loeffler and HHS Secretary Robert F. Kennedy Jr. said their agencies were prepared to take on the Education Department programs.

鈥淎s the government鈥檚 largest guarantor of business loans, the SBA stands ready to deploy its resources and expertise on behalf of America鈥檚 taxpayers and students,鈥� Loeffler said.

Kennedy, on the  X, said his department was 鈥渇ully prepared to take on the responsibility of supporting individuals with special needs and overseeing nutrition programs that were run by @usedgov.鈥�

The Education Department directed States Newsroom to McMahon鈥檚 , where she said the department was discussing with other federal agencies where its programs may end up, noting she had a 鈥済ood conversation鈥� with Loeffler and that the two are 鈥済oing to work on the strategic plan together.鈥� 

is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Maine Morning Star maintains editorial independence. Contact Editor Lauren McCauley for questions: info@mainemorningstar.com.

Nathan Reyes lives with his family five minutes from Cal State Los Angeles, where he鈥檚 paying close to nothing to earn a bachelor鈥檚 degree that typically lands graduates a salary of $62,000 .

He鈥檚 one of hundreds of thousands of California low-income students who attend colleges that, , cost the equivalent of a few months of a typical salary that students earn within a few years of graduation. 

A  compares California鈥檚 colleges by analyzing how long it would take low- and moderate-income students to recoup the money they spent to earn a college credential. It shows that many community colleges, Cal States and University of California campuses 鈥� all public campuses 鈥� have better returns on investment than most nonprofit private colleges and for-profit institutions.

Reyes鈥� only expenses are car upkeep, gas, a few books and helping his family with some housing costs. The third-year student didn鈥檛 need to take out loans.

鈥淚 feel very lucky,鈥� Reyes, a communications major, said. 鈥淚n high school, I was always stressing about, 鈥極h, man, I鈥檓 gonna have a whole bunch of debt racked up after college.鈥� And now that I鈥檓 in my third year, I don鈥檛 have to worry about any of that.鈥�

Reyes, who鈥檚 20 years old, receives state grants to cover all his tuition and federal aid . He also works for  that pays students a stipend.

Report calculates time it takes to recoup cost of degree

The report was commissioned by College Futures Foundation, a nonprofit that promotes college completion. The report merges several concepts into one number: 

• The net price of a college degree after all financial aid is calculated 
• The typical earnings 10 years after a student first enrolls in a school 
• How much higher those wages are compared to what young adults earn with just a high school diploma. 

It defines low- and moderate-income households as those earning below $75,000 annually.

The data, all from the federal government, show that the time it takes to recoup the net costs of earning a degree at Cal State San Bernardino is less than three months. That鈥檚 because low-income students there incur about $5,000 in out-of-pocket expenses if they finish in four years. Within a few years they earn about $53,000 a year 鈥� double what young adults with only a high school diploma make.

At Cal State Los Angeles, the time to recoup the net costs of earning a bachelor鈥檚 is also less than three months of a typical post-college annual salary. 

鈥溾�嬧赌婽his is really a first-of-its kind look,鈥� said the report鈥檚 author, Michael Itzkowitz, who headed the federal government鈥檚 first consumer tool for comparing college costs under the Obama administration. The approach is a mathematical way of demonstrating which colleges confer economic value to students beyond what a high school diploma would.

A CalMatters analysis of Iztkowitz鈥檚 data found that the average time needed for a student to recoup their net costs is about two years at public institutions and a little over three years at nonprofit private colleges in California.

Some of those private campuses are as affordable as a Cal State, UC or community college after factoring in financial aid. Stanford University costs low-income students nothing. However, only 4% of students who apply are admitted, while all but three Cal States admit . Most undergraduates in California .

Pitzer, Pomona and the University of Southern California and several other highly selective nonprofit private colleges cost students less than a year鈥檚 worth of the typical salary they鈥檒l earn within a few years of completing their degree.

Return on investment varies by college

While some for-profit colleges have strong returns on investment, most do not. 

It takes nearly 13 years for students attending this  segment of higher education to recoup their costs, Itzkowitz鈥檚 calculations show. California鈥檚 Department of Justice has sued for-profit , accusing them of deceitful practices, and won large financial judgments and settlements.

And that doesn鈥檛 even account for the 22 for-profit institutions that show no return on investment, meaning students from those schools earned no more than what a young adult with just a high school diploma makes. In the report, 24 campuses in total, or 8% of all California colleges, showed no return on investment, including two small nonprofit private colleges. 

鈥淭here are for-profit institutions that can offer an affordable education and good employment outcomes and they鈥檙e recognized within the data,鈥� Itzkowitz said. 鈥淏ut what we also see is that there are a disproportionate amount that show more worrisome outcomes for students in comparison to other sectors.鈥�

Most California for-profit colleges, however, predominantly issue certificates, which are shorter-term credentials that don鈥檛 regularly lead to the.

At 79% of California institutions in the report, low and moderate-income students typically recoup their costs in five years or less. For nearly a third of campuses, it was less than a year.

For many students, the ultimate costs of a degree will be higher than the data published today. That鈥檚 because they need more than two years to earn an associate degree or beyond four years to earn a bachelor鈥檚, assuming they graduate at all. The longer they chase a degree, the less time they spend in the workforce earning the higher salaries that come with a college credential. Also, the federal net price data has limits: It only calculates what full-time freshmen pay. Students attending part time will experience different annual costs.

But the basic trend remains the same: State and federal financial aid at public campuses plus typical salaries that far exceed the wages for those with a high school diploma make college worth the investment.

Itzkowitz plans to produce a follow-up report that measures the return on investment by major. His organization, the HEA Group, produced an . Some majors lead to higher wages than others, which can skew school-wide results.

The data in today鈥檚 report show variation within public universities, too, even in the same city. UCLA鈥檚 net price-to-earnings ratio is about seven months and its students tend to earn more than those from Cal State LA after graduating. But the typical cost of a degree after four years for low-income students is roughly $31,000 鈥� far higher than the $5,500 at Cal State LA, which is 20 miles away. 

鈥淚 wanted to go to UCLA, but it was too expensive for me,鈥� Reyes said. 鈥淚 did get accepted.鈥�

Like he did at Cal State LA, he would have probably qualified for the Cal Grant, which waives tuition at public universities. But the distance from home would have forced him to either live in a UCLA dorm or commute about two hours daily between home and the crosstown campus. Housing, not tuition, is usually the largest expense for students at public universities. Borrowing money was out of the question for him. 

So was a long drive to UCLA. 鈥淚f I ended up missing a class or something, I鈥檇 beat myself up over it,鈥� he said. 

WASHINGTON 鈥� President Joe Biden announced Friday that some federal student loan borrowers will have their loans cancelled under the Department of Education鈥檚 new repayment plan.

Starting next month, people who took out under $12,000 in federal student loans and have been repaying those loans for 10 years will get their remaining student loan balance cancelled in the Saving on a Valuable Education Plan, known as SAVE.

鈥淭his action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans,鈥� Biden said in a statement.

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鈥淎nd, it鈥檚 part of our ongoing efforts to act as quickly as possible to give more borrowers breathing room so they can get out from under the burden of student loan debt, move on with their lives and pursue their dreams.鈥�

This initiative builds on the Biden administration鈥檚 effort to cancel federal student loan debt following last year鈥檚 U.S. Supreme Court decision that struck down the White House鈥檚 plan for a one-time cancellation of up to $10,000 for federal borrowers. Student loan borrowers who had received Pell Grants 鈥� federal aid to help low-income students pay for higher education 鈥� could have qualified for an additional $10,000 in forgiveness.

, the White House announced its SAVE plan, along with a one-year off-ramp program that would not report borrowers to creditors if they failed to make loan payments once repayment started back up in October.

鈥淎nd, in the wake of the Supreme Court鈥檚 decision on our student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible,鈥� Biden said. 鈥淚 won鈥檛 back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.鈥�

So far, 6.9 million borrowers have enrolled in SAVE, and of those borrowers, 3.9 million have a $0 monthly payment.

Under the new plan, SAVE calculates payments based on a borrower鈥檚 income and family size and forgives balances after a set number of years. The Department of Education has estimated that most borrowers will save about $1,000 per year under the new plan.

Borrowers who are in the former payment plan 鈥� known as the Revised Pay as You Earn plan 鈥� will automatically be enrolled in the SAVE program.

The states with the highest number of borrowers enrolled in the program include Texas, with 591,700, California with 597,300, Florida with 475,800, New York with 374,300 and Pennsylvania with 289,800.

is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Louisiana Illuminator maintains editorial independence. Contact Editor Greg LaRose for questions: info@lailluminator.com. Follow Louisiana Illuminator on and .

A new version of the federal application for student aid will open by Dec. 31, two months later than usual.

The Free Application for Federal Student Aid, known as FAFSA, is how prospective college students access federal financial aid programs, including grants, subsidized loans and unsubsidized loans, which can be forgiven in certain circumstances. Many colleges and private scholarship programs also use a student鈥檚 FAFSA to determine that student鈥檚 financial need.

It will look different from previous years. The FAFSA Simplification Act of 2022 made several changes to the application process and the methodology for determining how much aid a student can get.

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The FAFSA is largely based on parents鈥� income and tax information.

EAB, an education research and consulting firm, found that in 2021 more than % of first-generation and low-income college students said completing the FAFSA was 鈥渄ifficult,鈥� citing lack of parental support, difficulty locating tax information, confusing questions and immigration status.

The U.S. Department of Education is marketing the reworked application as 鈥�,鈥� promising to deliver a shorter, more efficient form and to provide additional aid to the students who need it most. The changes, however, have delayed the application鈥檚 opening date and raised questions about whether the new FAFSA will be better for everyone.

The changes in aid calculations will increase aid to low-income students, extending Pell Grants 鈥� need-based financial aid that students don鈥檛 have to repay 鈥� to an additional 610,000 students nationwide. In Minnesota, an estimated 13,000 additional students will receive a Pell grant, a 12.5% increase from 2022.

The Department of Education also says under the new rules, more students will receive the maximum Pell Grant award compared to previous years.

The changes also reduced the number of questions on the application; previously, students and families manually answered questions based on their tax returns. Now, the FAFSA application will import data directly from the IRS, saving families time.

Parents will have to provide up-front consent on the new online application to allow the IRS to share their tax information, presenting a potential barrier for students whose parents are concerned about data privacy.

Students will not be able to submit the FAFSA if their parents don鈥檛 consent to sharing the data.

As part of the new application process, parents will also have to use their Social Security number to create a unique login to the online application 鈥� paper applications do exist but are 鈥渉ighly discouraged,鈥� according to Zoey Haines, a program manager with Achieve Twin Cities, which provides college and career services.

For parents who do not have a Social Security number, the Federal Student Aid Office will use alternative questions to verify a person鈥檚 identity; if the initial round of online questions isn鈥檛 sufficient to verify the parent鈥檚 identity, they will have to go through an additional round of verification. The details of that process aren鈥檛 clear yet, Haines said.

With the application opening delayed two months, the window for students and families to complete the application, receive their award letters and decide on a college is shorter than in recent years.

is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Minnesota Reformer maintains editorial independence. Contact Editor Patrick Coolican for questions: info@minnesotareformer.com. Follow Minnesota Reformer on and .

Oregon Attorney General Ellen Rosenblum and a bipartisan group of her peers are urging a federal appeals court to protect student borrowers from paying back loans from schools that made bogus claims.

Rosenblum on Wednesday joined attorneys general from 22 other states and the District of Columbia in filing with the Fifth Circuit Court of Appeals in the case Career Colleges and Schools of Texas v. U.S. Department of Education.

The Texas association is challenging a 2022 rule passed by Congress that allows student borrowers to defend themselves against post-secondary institutions that make fraudulent and misleading claims about degree programs. Under the 鈥渂orrower defense rule,鈥� students can have loans forgiven or reimbursed if an institution has misrepresented or omitted facts about its programs and career options, or breached contracts with students.

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The case was first filed in April in a district court in Austin, Texas by Career Colleges and Schools of Texas 鈥� a trade association representing more than 70 for-profit higher education institutions in Texas 鈥� against the federal education department. The district court denied a motion to suspend the rule, so the group appealed to the Fifth Circuit that has yet to hear the case. The brief was filed in support of the Department of Education.

Though the borrower defense rule has existed for several decades under the Higher Education Act of 1965, the Biden administration in 2022 updated it to allow for the federal education department to recoup the cost of forgiven student loans from the colleges that had lured students with misleading claims. The update also outlined when the rule can be used, including if a school has engaged in鈥渁ggressive and deceptive recruitment鈥�; and it allowed for groups to submit claims, rather than just individual students. It also allowed state officials to file claims on behalf of groups of students in their states.

Career Colleges and Schools of Texas argued in the case that Congress did not authorize such a sweeping rule and that it could cause colleges 鈥渃rippling liability鈥� issues, creating a process in which borrower claims are virtually ensured to be approved while colleges are left unprotected.

In their brief, the attorneys general say the rule protects borrowers from a growing number of predatory, for-profit institutions that prey on vulnerable students.

鈥淪tates have assisted hundreds of thousands of student borrowers with securing relief under this process,鈥� the attorneys general wrote. 鈥淭he regulations challenged in this litigation are critical for ensuring that students who experience such institutional abuse are not unfairly saddled with federal student debt.鈥�

Rosenblum said in a news release that ending the borrower defense rule could have 鈥渄isastrous impacts鈥� on Oregon students.

鈥淭oo many for-profit colleges and universities have misled and deceived our vulnerable students, persuading 鈥� sometimes coercing 鈥� them to take out loans to attend programs that provided them minimal educational value,鈥� she said.

Joining Rosenblum in the brief are the attorneys general in California, Colorado, Connecticut, Delaware, Washington D.C., Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Washington and Wisconsin.

is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Oregon Capital Chronicle maintains editorial independence. Contact Editor Lynne Terry for questions: info@oregoncapitalchronicle.com. Follow Oregon Capital Chronicle on and .

As a first-generation college graduate from South Texas, Priscilla Lugo believed a degree was the key to financial stability and independence.

鈥淢y parents didn’t go to college and [I was] always being sold this [idea], 鈥榞o to school and you’ll get everything you’ve ever needed, you’ll have everything you will need to take care of yourself,鈥欌�欌�� she said.

But her undergraduate degree and two master鈥檚 degrees from The University of Texas at Austin came with a high price tag 鈥� despite receiving financial aid and scholarships, Lugo ended up with $30,000 in student loan debt.

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Now, as payments on her student loans resumed this month and she braces for the financial adjustments she鈥檒l have to make, Lugo said she鈥檚 鈥渞eally feeling lied to and misled.鈥�

A pause on federal student loan interest ended Sept. 1, nearly four years after former President Donald Trump provided borrowers with relief in response to the COVID-19 pandemic. President Joe Biden extended the pause after his campaign promised to help millions of borrowers with crushing student debt if elected. But any hopes for extended relief were dashed after the.

The Texas Tribune asked readers to share their stories of how they benefited from the student loan repayment pause, and how resuming payments will impact their finances. Some said the pause allowed them to contribute funds to their retirement and savings accounts for the first time; others said resuming payments means they will need to get a second job to be able to afford rent, utilities and groceries.

Having to resume payments on her loans worries Lugo, who works in Austin at a Latino civil rights nonprofit. She said her already limited savings will likely diminish to make ends meet and she worries she鈥檒l never be able to afford a home or have enough money in the bank for an emergency.

鈥淚t is stressful because I know my credit card debt will go up, especially with the rate of inflation and rising cost of living,鈥� Lugo said. 鈥淚 already worry that I am not putting enough money into my retirement fund to sustain my future. I worry about what this will do for not only my immediate future, but the long-term future.鈥�

Lugo said she feels misled by the Biden administration, which promised student loan relief to the millions of borrowers across the country like her. Despite applying for an 鈥� which considers an individual鈥檚 household income to calculate their monthly loan payment amount 鈥� Lugo said making payments will still put her in a tough spot financially. In addition to a tight budget, Lugo said the burden of researching and understanding complex student loan debt repayment plans has fallen on her with no clear communication or assistance from her loan provider.

Taylor Kidd, who lives in Houston and graduated with about $40,000 in student debt after receiving his undergraduate and graduate degrees, said unanswered questions and confusing directions have made the process of paying off his student loans frustrating and anxiety-inducing, even though he and his partner are financially able to pay off their loans.

鈥淚’m appreciative [of loans], but I really don’t think I should spend the rest of my life not owning a home or not being able to save for retirement,鈥� he said.

In talking with neighbors and friends who have paid off their student loans, Kidd said he has noticed a lack of compassion toward those still struggling to pay them off. Some critics of student loan forgiveness worry that providing relief to borrowers would exacerbate inflation by putting more money in their pockets for high-ticket goods, though loan experts believe . Others simply say borrowers should take responsibility for their loans and not expect help from taxpayers.

The cost of higher education in Texas and across the country has increased in recent years. A released last year by the Texas Higher Education Coordinating Board shows a 鈥渟ubstantial amount of unmet financial need among Texas residents attending Texas institutions of higher education.鈥�

The report found that 73% of undergraduate and graduate students who demonstrated need received aid, while 7% of students who demonstrated need did not receive it. Additionally, the report found that financial aid might not be going to the students who need it the most, with 20% of students receiving aid despite not having demonstrated a need for it.

Even though most students in need receive some level of financial aid, undergraduate students attending public universities in 2021 had an average of $12,947 in unmet needs 鈥� over half of the average cost to attend college, according to the report.

Linda Richards, a therapist who lives outside of Houston, graduated with $38,000 in student loan debt after earning her undergraduate and graduate degrees from the University of Illinois in 2001.

Decades later, she has paid nearly double what she initially borrowed 鈥� something she blames on the high-interest rate attached to her loans. Richards applied for the income-based repayment plan announced by Biden in August, but because the plan takes into account the borrower鈥檚 entire household income and her husband鈥檚 income is higher than hers, her monthly loan payments have actually increased significantly.

Richards, 59, paid off her credit card debt during the repayment pause and directed the money she saved into her retirement account. As repayments resume with increases to her payment requirements, Richards said she won鈥檛 be able to save for retirement anymore.

鈥淚t’s kind of scary knowing I鈥檓 probably not going to be able to retire,鈥� she said.

Tanya Garcia with the Institute for College Access and Success said in recent years the financing of higher education has fallen more on students and their families rather than the institutions or the state.

Garcia said a vast majority of students attend less well-resourced, underfunded institutions that typically serve a higher proportion of students of color and low-income students. Those students often do not receive enough operational funding and support and make up for it by taking student loans.

After the Supreme Court鈥檚 ruling, the Biden administration came up with other proposals to address the student loan debt crisis.

The Higher Education Act of 1965 gives U.S. Secretary of Education Miguel Cardona leeway to “compromise, waive or release鈥� some federal student loans, which would allow federal officials to craft other solutions for those struggling with debt. But borrowers will have to wait several months for a proposal. The act will need to go through a negotiated rulemaking process, which includes public hearings and can take up to a year.

In the meantime, Biden is offering a 12-month “on-ramp” repayment plan so borrowers who miss a payment won鈥檛 be referred to credit agencies, avoiding default on their loans.

Garcia said these proposals are a small step forward in addressing the student loan debt crisis, but she added that Texas and the rest of the country still have a long way to go.

鈥淚f we don’t figure out a way of removing student loans as the financing option, for at least the most low income students, we’re not going to be able to build a talented workforce, in Texas, or anywhere,鈥� she said.

Disclosure: University of Texas at Austin has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete .

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The U.S. Supreme Court on Friday ruled that the Biden administration does not have the legal authority to enact a one-time student debt relief program, dealing a blow to the 40 million Americans who would have qualified.

Last year, the Biden Administration rolled out a debt forgiveness plan for borrowers with federal student loans that would be a one-time cancellation of up to $10,000.

Those student loan borrowers who had received Pell Grants 鈥� federal aid to help low-income students pay for higher education 鈥� could qualify for an additional $10,000 in forgiveness, a policy that was 

滨苍听, Chief Justice John Roberts, writing for the conservative majority of the court, deemed that聽, the Higher Education Loan Authority, known as MOHELA, would have its revenue threatened by the debt relief.

The case was filed by Republican attorneys general of Nebraska, Missouri, Arkansas, Kansas and South Carolina, along with Iowa Republican Gov. Kim Reynolds鈥� general counsel, and they argued the Biden administration overstepped its reach and that MOHELA would be harmed by a loss of profits from federal student loan debt relief.

The court majority agreed. 鈥�(T)he Secretary鈥檚 plan would cost MOHELA, a nonprofit government corporation created by Missouri to participate in the student loan market, an estimated $44 million a year in fees,鈥� Roberts wrote.

鈥淢OHELA is, by law and function, an instrumentality of Missouri: Labeled an 鈥榠nstrumentality鈥� by the State, it was created by the State, is supervised by the State, and serves a public function. The harm to MOHELA in the performance of its public function is necessarily a direct injury to Missouri itself.鈥�

President Joe Biden said in a statement that 鈥渢he fight is not over鈥� to help borrowers.

鈥淚 believe that the Court鈥檚 decision to strike down our student debt relief plan is wrong,鈥� Biden said in a statement, adding that his administration plans to announce more efforts to help borrowers.

鈥淚 will stop at nothing to find other ways to deliver relief to hard-working middle-class families,鈥� he said. 鈥淢y Administration will continue to work to bring the promise of higher education to every American.鈥�

Republicans celebrated the decision. Nebraska Attorney General Mike Hilgers and Missouri Attorney General Andrew Bailey held a Friday news conference.

Bailey said the case was about 鈥減rotecting working Missouri families from getting saddled with Ivy League debt,鈥� and about 鈥渂asic fairness.鈥�

鈥淚 paid for my college with blood, sweat and tears, and service to my country, and it鈥檚 only fair that working families not be stuck with other people鈥檚 debt,鈥� Bailey said.

All three liberal Justices, Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson, dissented. Kagan, writing for the dissenters, did not agree with the finding the states had standing.

鈥淭he plaintiffs here are six States: Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina,鈥� Kagan wrote. 鈥淭hey oppose the Secretary鈥檚 loan cancellation plan on varied policy and legal grounds. But as everyone agrees, those objections are just general grievances; they do not show the particularized injury needed to bring suit.鈥�

The justices聽聽that a second case challenging the debt relief plan did not have legal standing. That case was brought by a two people with student loan debt who would either partially or entirely not qualify for the White House program. The case was backed by the conservative advocacy group the Job Creators Network Foundation.

Turbulent history for student debt relief 

The Biden administration鈥檚 student debt relief plan has not only been challenged in the courts by Republicans, but also in Congress. The House and the Senate  through the Congressional Review Act, but Biden vetoed the resolution.

More than 16 million borrowers had already been approved for relief,   before  from accepting more applicants following a nationwide injunction.

Repayments on federal student loans are set to resume Oct. 1, but interest accrual will begin starting Sept. 1, 

The Department of Education did not respond to a States Newsroom request for comment, but said on its website that the agency is 鈥渞eviewing the Court鈥檚 decision to determine next steps.鈥�

鈥嬧赌婣mericans have student loan debt, and the Federal Reserve  that the total U.S. student loan debt is more than $1.76 trillion.

A law passed in early June to address the nation鈥檚 debt ceiling  that the White House would not be able to extend the pause on repayment for federal student loans unless approved by Congress.

For three years, there has been a pause on federal student loan repayment due to the coronavirus pandemic that was initially put in place by the Trump administration and extended by the Biden administration.

In a statement, Iowa鈥檚 Reynolds said the decision 鈥渁ffirms what Iowans have believed this entire time: the hard-working men and women of this country should not bear the burden of paying off others鈥� loans.鈥�

鈥淭his plan belittles Iowans who paid their own debt or chose not to pursue a traditional four-year degree,鈥� she said.

HEROES Act central to ruling

Roberts disagreed with the Biden administration鈥檚 argument that the federal HEROES Act allowed the secretary of education 鈥渢o cancel $430 billion of student loan principal.鈥� The HEROES Act, first enacted 20 years ago, was used by the Trump administration to suspend repayments on federal student loans at the onset of the pandemic.

, U.S. Solicitor General Elizabeth B. Prelogar 鈥� representing the Biden administration 鈥� argued that under the HEROES Act, the secretary of education can 鈥渨aive or modify any statutory or regulatory provision鈥� to help borrowers in a national emergency, such as the coronavirus pandemic.

Roberts said the administration went too far. 鈥淲e hold today that the Act allows the Secretary to 鈥榳aive or modify鈥� existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up,鈥� Roberts wrote.

Roberts invoked the 鈥渕ajor questions doctrine,鈥� which means that if Congress wants to give an agency, such as the Department of Education, the power to make a decision of  鈥渆conomic and political significance,鈥� it has to explicitly say so.

Roberts wrote that 鈥渢he question here is not whether something should be done; it is who has the authority to do it.鈥�

Congress reacts

Congress is unlikely to act on debt relief anytime soon, with control split between a Republican House and a Democratic Senate.

Senate Majority Leader Chuck Schumer, a New York Democrat, said in a statement that he was disappointed in the decision.

鈥淭his disappointing and cruel ruling shows the callousness of the MAGA Republican-controlled Supreme Court,鈥� he said. 鈥淭he hypocrisy is clear: as justices accept lavish, six-figure gifts, they don鈥檛 dare to help Americans saddled with student loan debt, instead siding with the powerful, big-monied interests.鈥�

He called on the Biden administration to 鈥渄o everything in its power to deliver for millions of working- and middle-class Americans struggling with student loan debt.鈥�

Congressional Republicans hailed the decision.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said in a statement that the court鈥檚 decision 鈥渄eals a heavy blow to Democrats鈥� distorted and outsized view of executive power.鈥�

鈥淭he President of the United States cannot hijack twenty-year-old emergency powers to pad the pockets of his high-earning base and make suckers out of working families who choose not to take on student debt,鈥� McConnell said.

GOP Sen. Bill Cassidy of Louisiana, who introduced the Congressional Review Act resolution to overturn the Biden administration鈥檚 debt relief policy, said in a statement that the court came to the right conclusion.

鈥淭his is an obvious but welcomed ruling,鈥� he said. 鈥淧resident Biden鈥檚 student loan scheme does not 鈥榝orgive鈥� debt, but unfairly transfers the burden from those who willingly took out loans onto those who chose not to attend college or already fulfilled their commitment to pay off their loans.鈥�

But Democratic Sen. Raphael Warnock of Georgia said in a statement that the news was devastating.

鈥淭he Supreme Court鈥檚 decision to usurp the President鈥檚 executive authority to provide meaningful debt relief isn鈥檛 just bad for the everyday, hardworking Georgians who are being held back financially by crippling debt, but it鈥檚 also terrible for our entire economy and sets a dangerous precedent that binds the hands of the elected executive from taking action that reflects the will of the people,鈥� he said.

The chair of the House Education and Workforce Committee, Rep. Virginia Foxx of North Carolina, said in a statement that she was pleased the Supreme Court had held the Biden administration accountable.

鈥淢r. President, good riddance to your illegal, economically disastrous taxpayer-funded bailout for the wealthy,鈥� she said. 鈥溾�淭his 鈥榦ne-time鈥� 鈥榗ancellation鈥� of student loan debt was subterfuge for the radical Left鈥檚 ultimate goal of taxpayer-funded 鈥榝ree鈥� college for all.鈥�

Foxx has held several hearings about the Biden administration鈥檚 student debt relief program, and has spoken against the policy since it was announced.

The top Democrat on the House Education and Workforce Committee, Bobby Scott of Virginia, said in a statement that millions of borrowers will be denied 鈥渢he relief they need to make ends meet.鈥�

鈥淎 college education should not depend on how much money a student鈥檚 parents make,鈥� he said.

Scott said moving forward, Democrats should work to advance legislation to increase the funding of Pell Grants, lower interest rates for student loans and 鈥渕ake other critical reforms to make our student loan system work for students.鈥�

Rep. Frederica S. Wilson of Florida, who is the top Democrat on the Higher Education and Workforce Development Subcommittee, said in a statement that the decision will perpetuate inequality and continue to harm vulnerable borrowers of color.

鈥淚t is no secret that the pandemic has disproportionately impacted communities of color, exacerbating inequalities,鈥� she said. 鈥淪tudent debt cancellation would have been a bold step toward narrowing the racial wealth gap.鈥�

Youth vote

The decision is likely to become an issue in the race for the presidency. Youth organizations that back student debt relief said they will use the ruling to rally support.

Cristina Tzintz煤n Ramirez, president of NextGen America, one of the largest youth voting organizations, said in a statement that 鈥測oung voters will remember this come 2024.鈥�

She added that, 鈥渉eading into 2024, we will not forget the people who fight for us everyday and the people who would rather protect the pockets of shady billionaires.鈥�

Another Gen Z-led organization, Voters of Tomorrow, echoed similar sentiments.

鈥淲e hope that the Biden Administration is able to negotiate a deal through Congress or take executive action to relieve student debt for all Americans,鈥� the group said in a statement. 鈥淲hile we know it will be difficult with far-right politicians who have championed the removal of the plan, it is what is needed to remove the burden from millions of Americans.鈥�

Kendra Cotton, the CEO of New Georgia Project, a voter mobilization group, said in a statement that in 鈥渢he wake of this decision, New Georgia Project will double down on our efforts to connect the issues Black, brown, and young Georgians need to secure their economic futures 鈥� an increased minimum wage, better access to healthcare, and more affordable housing 鈥� to the importance of voting.鈥�

GOP presidential candidates, such as Nikki Haley, praised the decision as stopping executive overreach from the White House.

鈥淎 president cannot just wave his hand and eliminate loans for students he favors, while leaving out all those who worked hard to pay back their loans or made other career choices,鈥� she said.

鈥淭he Supreme Court was right to throw out Joe Biden鈥檚 power grab.鈥�

Another presidential candidate, Republican Sen. Tim Scott of South Carolina, released a video statement, arguing that there are other pathways to the 鈥淎merican Dream鈥� that don鈥檛 require a college degree.

鈥淲e need more welders, carpenters and electricians,鈥� he said. 鈥淭hese are the jobs that built America, and these are the jobs liberal elites can鈥檛 ship to China.鈥�

Beyond the 鈥渟tanding鈥� issue, however, conservative justices expressed skepticism that the administration had the authority to offer up to $20,000 in debt relief without going through Congress or at least allowing public comment.

鈥淲e take very seriously the idea of separation of powers, and that power should be divided to prevent its abuse,鈥� Chief Justice John Roberts told Nebraska Solicitor General James Campbell, representing the states. 鈥淭his is a case that presents extraordinarily serious important issues about the role of Congress and about the role that we should exercise.鈥�

Those eligible for relief 鈥� roughly 40 million borrowers 鈥� have been since November, when a Trump-appointed federal judge halted the plan. Both the Trump and Biden administrations had argued that the secretary of education has the authority under a 2003 law, the Higher Education Relief Opportunities for Students, or HEROES, to forgive student debt because of the pandemic. COVID caused severe financial harm and  increased the chances that borrowers would default on their loans, said U.S. Solicitor General Elizabeth Prelogar.

鈥淢illions of Americans have struggled to pay rent, utilities, food, and many have been unable to pay their debts,鈥� she said. 

Biden’s plan offers $10,000 in relief to borrowers earning up to $125,000 and $20,000 for Pell Grant recipients.

鈥楢 breathtaking power鈥� 

In the first case, , Prelogar argued that the six states had no right to sue on behalf of the Missouri Higher Education Loan Authority, the student loan servicer that would primarily be affected if students don鈥檛 make good on their debt.

Campbell argued that because the state created the nonprofit, it has an interest in the case and that if the authority loses revenue, it won鈥檛 be able to adequately contribute to the state鈥檚 higher education programs. On the merits of the case, he argued that the administration misinterpreted HEROES.

鈥淭he secretary here asserts a breathtaking power to do anything that he thinks might reduce the risk of borrowers defaulting,鈥� Campbell said.

Justice Elena Kagan, one of the three liberals on the court, disagreed that Education Secretary Miguel Cardona was acting outside the intent of the law. 

鈥淐ongress used its voice in enacting this piece of legislation,鈥� she said. 鈥淐ongress has authorized the use of executive power in an emergency situation.鈥�

That鈥檚 what former Rep. George Miller of California, one of the authors of HEROES, wrote in last week. He was among those who filed amicus briefs in support of loan forgiveness, saying the law鈥檚 use of the terms 鈥渨aive鈥� or 鈥渕odify鈥� in regard to the terms of a loan includes debt cancellation. 

鈥淐ongress empowered officials to say that those requirements no longer apply 鈥� that borrowers no longer need to pay off the debt they owe,鈥� he wrote. 鈥淎nd there鈥檚 no question that the COVID-19 pandemic is a 鈥榥ational emergency鈥� within the meaning of the law.鈥�

In the second case, , attorney John Connolly, representing two borrowers and the conservative Job Creators Network Foundation, argued that Cardona should grant relief but should have used a different law 鈥� the Higher Education Act. That law would have required the department to seek comments from the public.

Congress, through HEROES, he said, 鈥渄id not authorize the secretary to create a $400 billion debt forgiveness program behind closed doors with no public involvement.鈥�

One of his clients, , is ineligible for the Biden program because she received loans from commercial lenders. Another, , qualifies for only $10,000 in relief because he鈥檚 not a Pell Grant recipient. Connolly said loan forgiveness is so important to the administration that Cardona would likely use the Higher Education Act to grant it if the current Biden plan were overruled. 

But Prelogar said the case uses a 鈥淩ube Goldberg theory鈥� and takes a 鈥渃ircuitous route鈥� to get relief. 

Even Justice Ketanji Brown Jackson, a liberal, agreed. 

鈥淵ou 鈥� have to convince us that the administration would have provided this sort of debt relief under the authority you point to,鈥� she told Connolly. 

鈥楢 technicality鈥�

Observers said it鈥檚 possible that the court will never rule on the major question of whether the debt relief plan is an example of government overreach. 

The administration has 鈥渟taked a lot鈥� on the idea that the plan will be upheld 鈥渙n essentially a technicality rather than on this question of whether the Department of Education had the right to do this,鈥� said Michael Brickman, an adjunct fellow at the conservative American Enterprise Institute, who focuses on higher education.聽

The arguments ran for over three hours, while demonstrators 鈥� overwhelmingly advocating for debt relief 鈥� amassed outside the court. About 100 college students with Rise, a nonprofit, had spent the night outside to get tickets to hear the arguments. 

鈥淲e get caught up in the legalese 鈥� standing issues, statute issues 鈥� that we miss the big picture around the students鈥� lives who are going to be impacted by what the justices decide,鈥� said Max Lubin, the organization鈥檚 founder. 鈥淥ur job as advocates is to be prepared for every possible outcome.鈥�

Among the 26 million borrowers who were automatically eligible for the relief or submitted an application are many K-12 and early childhood educators who needed more than a bachelor鈥檚 degree to meet job requirements and advance in their careers. That has consequences for students, some say.  

Albert Sackey, principal of Hommocks Middle School in Larchmont, New York, said he knows teachers, principals and other administrators who are 鈥渟trongly exploring changing career paths to everything from catering to real estate to law,鈥� in part because of financial strain.

鈥淲e want to make sure that the people we are putting in front of our children have the necessary training and education that is needed,鈥� said Sackey, who has two master鈥檚 degrees and a doctorate. 鈥淚 graduated with my undergraduate degree in 1998 and have been paying significant student loans ever since.鈥�

The court will hear two cases that say the administration exceeded its authority when it offered borrowers up to $20,000 in debt relief last August. One is from six GOP-led states; the second is from a conservative organization that sued on behalf of two borrowers who argue the administration鈥檚 plan leaves them out.聽

Given the 6-3 conservative majority on the court, experts say it will be tough for Biden to win. Just last year, that the administration鈥檚 plan to set limits on carbon emissions crossed 鈥渃onstitutional lines鈥� and exemplified government overreach.

The states 鈥� Nebraska, Arkansas, Iowa, Kansas, Missouri and South Carolina 鈥� and the plaintiffs who filed the second lawsuit will first have to convince the court that Biden鈥檚 plan would cause them financial harm and that they had legal 鈥渟tanding鈥� to sue in the first place. 

鈥淚t seems likely that if there is standing, that the loan forgiveness will be overturned,鈥� said Michelle Dimino, deputy director of education at Third Way, a center-left think tank. 鈥淐an the department do something with that level of political and economic significance without an act of Congress?鈥�

After the administration paused repayment multiple times, Biden鈥檚 decision聽to go forward with the loan forgiveness plan was viewed as a politically popular move ahead of the recent midterm elections. Supporters hailed it as compassionate toward borrowers, including the who took out loans to afford college. American Federation of Teachers President said many were 鈥渆agerly awaiting the breathing room 鈥� student debt relief would bring.鈥� But Republicans argue it鈥檚 not only illegal, but favors one group of borrowers at the expense of others.聽

鈥淲here is the forgiveness for the guy who didn鈥檛 go to college but is working to pay off the loan on his work truck?鈥� Louisiana Sen. Bill Cassidy, ranking member of the education committee, asked earlier this month during the first meeting of the new Congress.

Others say the plan increases inflation and could leave today鈥檚 K-12 students with the impression their college debt might be slashed as well. 

鈥淚f [politicians] have the authority to give away money if they declare an emergency, there鈥檚 a lot of incentive to declare emergencies 鈥� or give it away after they鈥檝e declared one,鈥� said Rick Hess, a senior fellow and the director of education policy studies at the conservative American Enterprise Institute.

But Kim Cook, CEO of the National College Attainment Network, said Biden presented the plan as 鈥渙ne-time debt relief鈥� and that 鈥渇uture students shouldn鈥檛 depend on it.鈥� Her organization, and many others, advocate for to $13,000 so low-income students won鈥檛 have to borrow so much to go to college.

鈥楥ontinued recovery鈥�

During this month鈥檚 State of the Union address, Biden efforts to reduce student debt, but didn鈥檛 directly reference the cases before the court. 

The administration鈥檚 argument rests on a 2003 law called 鈥� for Higher Education Relief Opportunities for Students. The law gives the education secretary the flexibility to make temporary changes to the federal student loan system in the case of a national emergency, including war.

鈥淪tudent loan borrowers from all walks of life suffered profound financial harms during the pandemic,鈥� U.S. Secretary of Education Miguel Cardona said last month when filed briefs in support of the plan. 鈥淭heir continued recovery and successful repayment hinges on the Biden administration鈥檚 student debt relief plan.鈥�

One 鈥渨ild card issue,鈥� Dimino added, is that Biden plans to end the on May 11, which could make it harder for the administration to prove its case before the court.

In addition, former Republican education secretaries wrote in that the link between HEROES and Biden鈥檚 plan is weak.

鈥淪uch a pause only ensured that affected individuals were not placed in a worse position financially,鈥� they wrote. 鈥淚t did not authorize the executive branch to cancel $400 billion in student debt and leave borrowers in a better position than they would have been in if the COVID-19 pandemic had never occurred.鈥�

In Biden v. Nebraska, the states argue that their tax revenues would drop if students don鈥檛 pay back their loans. The Missouri Higher Education Loan Authority, for example, is a nonprofit that services student loans and contributes to the state鈥檚 higher education system. Biden鈥檚 plan, the states say, could cost the Missouri organization nearly $44 million a year and reduce what it pays the state.

Job Creators Network Foundation, an advocacy group, filed the second case, U.S. Department of Education v. Brown, on behalf of of Texas. Brown, a business owner from the Dallas-Fort Worth area, received loans from commercial lenders, making her ineligible for the Biden program.聽

Taylor, a graduate of the University of Dallas, argues that limiting the maximum amount of relief 鈥� $20,000 鈥� to Pell Grant recipients is unfair because borrowers earning far more than him will have more debt erased. He earns less than $25,000 a year, but qualified for $10,000 in loan forgiveness because he was not a Pell Grant recipient. Brown and Taylor argue that the administration didn鈥檛 give the public a chance to comment on the plan.

In the meantime, borrowers who took advantage of the Biden plan remain in limbo.聽

In October, people were automatically eligible or applied for the relief. The department approved over applications before the U.S. Court of Appeals for the 8th Circuit blocked the plan.

If the program is overruled, it鈥檚 unclear how soon borrowers would have to begin repayment, Dimino said.

鈥淏orrowers are still totally in the dark,鈥� she said. 鈥淭hese are really difficult circumstances for those making immediate financial decisions.鈥�

WASHINGTON 鈥� The U.S. Department of Education unveiled a proposal Tuesday that would overhaul a federal student loan income-driven repayment plan, and, if implemented, could help millions of low-income borrowers.

However, it鈥檚 unclear how the agency would be able to finance the program. Many student debt relief advocates also criticized the proposal for leaving out graduate students and parental loans.

The federal agency that would implement the plan, the Office of Federal Student Aid, handles the loans of 44 million borrowers. But it was not given an increase in its $2 billion funding in the recent $1.7 trillion government spending bill that covers the current fiscal year.

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In a call with reporters late Monday, senior administration officials said funding their new plan would be difficult.

鈥淚t鈥檚 true that we were very disappointed with the level of funding we received from Congress for Federal Student Aid,鈥� a senior administration official said. 鈥淎nd that鈥檚 going to make it a challenge for us to carry out a number of our policy initiatives.鈥�

Changes in plan

Under the proposed rule, undergraduate borrowers would only be required to pay 5% of their income toward their loans, which would be down from the 10% required under the current income-driven repayment plan.

The proposed rule would also amend the 鈥淩evised Pay As You Earn鈥� federal plan to offer zero monthly payment plans to any borrowers who make less than $30,600 a year and any borrower in a family of four who makes less than $62,400.

鈥淭he proposed regulations would also ensure that borrowers stop seeing their balances grow due to the accumulation of unpaid interest after making their monthly payments,鈥� according to the Department of Education鈥檚 .

The department鈥檚 goal is to implement the program this year, officials said. However, rule can be a lengthy process, which can even take longer . Public comment will be open on Wednesday for the .

Pathway to forgiveness

U.S. Education Secretary Miguel Cardona said in a statement that the proposed regulation will help create a faster pathway to federal loan forgiveness and help those borrowers avoid defaulting on their loans.

鈥淲e cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed,鈥� he said.

Americans have student loan debt, and the Federal Reserve that the total U.S. student loan debt is more than $1.76 trillion.

If implemented, the department estimates that federal loan borrowers who are low income would see payments that are 83% less, while federal loan borrowers who make higher incomes would see a 5% reduction.

Federal student loan borrowers who went to community college would be debt free within 10 years if the program is implemented, the department said.

The move comes as the Biden administration鈥檚 larger plan for student loan relief is tied up in the courts and under a nationwide injunction awaiting a U.S. Supreme Court hearing and ruling.

The court action has prevented the administration from implementing its plan for one-time student loan debt cancellation of up to $20,000 for millions of borrowers.

The Supreme Court will hear oral arguments on the case Feb. 28.

Criticism of proposal

The Committee for a Responsible Federal Budget, a bipartisan think tank focusing on government spending, criticized the plan announced Tuesday and argued that if implemented it would lead to more student loan borrowing and drive up tuition costs.

Maya MacGuineas, the president of the group, said in a statement that 鈥渋t now looks like the Biden Administration鈥檚 student debt proposals could cost $600 billion, or perhaps even more.鈥�

鈥淭he Administration should abandon their unilateral effort to remake higher education financing, and instead work with Congress on a thoughtful package of reforms that truly address college costs and value,鈥� she said.

The deputy executive director of the Student Borrower Protection Center, Persis Yu, said in a statement that while the proposals are significant, the Department of Education should go further by including Parent PLUS loans and graduate student loan borrowers in the program.

allow parents to borrow money for a dependent鈥檚 higher education, and those loans are on an income-driven repayment plan. The loan cannot be transferred to the child and is the sole responsibility of the parent.

There are about 4 million Parent PLUS loans, according to .

Yu argued that many low-income families of color are more likely to rely on Parent PLUS loans and students of color are more likely to 鈥渘eed to get a graduate degree to earn the same salary as their wealthier white peers.鈥�

鈥淓quity demands that these borrowers have equal access to an affordable payment plan and the necessary supports to free themselves from the crushing weight of student debt,鈥� Yu said.

The president of the Student Debt Crisis Center, which advocates for student loan debt relief, Natalia Abrams, made similar criticisms in a statement.

鈥淯nfortunately, the plan repeats past mistakes that leave too many holes in the student loan safety net,鈥� she said.

鈥淧arents are excluded from the new benefits even though many are shouldering their children鈥檚 debt on top of their own debt. And, graduate students are blocked from the full benefits of the plan despite them carrying higher, more unaffordable monthly payments.鈥�

Abrams called for a broad-based debt cancellation plan and reforms that would benefit all borrowers.

is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Louisiana Illuminator maintains editorial independence. Contact Editor Greg LaRose for questions: info@lailluminator.com. Follow Louisiana Illuminator on and .

Cortez Masto鈥檚 was the lead signature on by 14 senators to Department of Education Secretary Michael Cardona. Fellow Nevadan Sen. Jacky Rosen also signed.

An estimated 200,000 service members now owe more than $2.9 billion in student loans, according to the senators鈥� letter.

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鈥淢any of them planned their financial futures around the promise of eventual student debt relief,鈥� the senators wrote. 鈥淗owever, a recent Government Accountability Office report indicated that approximately 94% of service members and civilian employees of the U.S. Department of Defense who previously applied for relief through the program have been denied.鈥�

In October, the U.S Department of Education announced it would overhaul the Public Student Loan Forgiveness (PSLF) program, which promises to forgive the remainder of a borrower鈥檚 federal student loans, if that borrower worked for 10 years in the public or nonprofit sector and made qualified income-based payments during that time. The PSLF program has proven cumbersome for borrowers to navigate and has , once reported as around 2%.

As a part of those announced changes, service members were allowed to count months spent on active duty toward PSLF, even if their loans were on a deferment at the time.

President Donald Trump first paused student loan payments during the pandemic, and President Joe Biden extended that pause . Biden has indicated it will not be extended further.

Progressive Democrats continue their of up to $50,000 in student loan debt per borrower and many want Biden to act through executive order. Biden has pushed back, saying he would support $10,000 in forgiveness if approved by Congress. He has instead implemented more targeted efforts, including cancelling millions of dollars of debt for students of predatory for-profit colleges and people with disabilities.

Student loan forgiveness is not part of the sweeping social policy bill being discussed in Washington DC.

is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Nevada Current maintains editorial independence. Contact Editor Hugh Jackson for questions: info@nevadacurrent.com. Follow Nevada Current on and .

Loans were repeatedly described as a 鈥渓ifetime sentence鈥� in interviews with 100 degree holders. For those enrolled in income-driven enrollment plans that stretch on for upwards of 20 years, growing balances are 鈥渟hackles on their ankle,鈥� and 鈥渓ike Jim Crow,鈥� with virtually no chance of total repayment.

Health scares, job insecurity and refinancing homes or vehicles with high debt-to-income ratios have derailed borrowers鈥� futures and compounded stress, according to the , 鈥淛im Crow Debt: How Black Borrowers Experience Student Loans鈥�. Many feared the only way out from under would be, 鈥渢aking it to my grave鈥� or 鈥渨hen I die.鈥�

Many of the 1,300 Black student loan borrowers are unable to access economic freedom because of their debt. An overwhelming majority cannot sustain savings, according to the advocacy nonprofit.

The majority, 66 percent, regret taking loans in the first place. Only in income-driven plans 鈥� of 2 million who鈥檝e made payments for over 20 years 鈥� have ever had loans cancelled.

It鈥檚 been that Black students 鈥� who because of , are unable to tap into generational wealth 鈥� borrow more and repay at slower rates than peers of other races. 

This report is the first national look at the day-day toll that debt has on Black families. 

It鈥檚 also the first to explore borrower-identified policy solutions, like doubling federal Pell Grants, lower interest rates and realistic debt cancellation. 

鈥淭his is not about individuals making the wrong choices, because they didn’t have good choices to make,鈥� said Victoria Jackson, Education Trust鈥檚 federal and state policy lead on college affordability.

Attempting to get loans forgiven through existing programs is also nearly impossible, graduates say.  

One borrower, named Georgia for anonymity, took out $24,000 in 1990 and owes $125,000 today.

鈥淚 have worked at a nonprofit for 27 years and have tried to work with my multiple loan servicers to get public service forgiveness. I only get the runaround,鈥� said Georgia, who like 72 percent of those surveyed by the Education Trust, is enrolled in an income-driven plan. 

鈥淚 tried the Department of Education, my Congress members,鈥� she said. 鈥淚 am 62 years old and do not know how I will retire.鈥� 

Researcher and co-author Jailil Mustaffa Bishop said student loan policy debates are always 鈥渂ased on Black people’s data, but not really involving actual Black people. We weren’t hearing how Black borrowers were framing their problems and expressing the solution.鈥�

Whether by coincidence or fate, the timing of their project 鈥渃ollided鈥� with national discussions around debt cancellation and the urgent need to reform college affordability.

No 鈥榞ood choices鈥�: How policy enables a lifetime of debt

Like many other borrowers, Georgia, struggling to retire, said she received confusing information as to which loans qualified for public service forgiveness or income-driven-repayment. 

With lower monthly payments and cancellation promised after about 25 years, she chose an IDR plan. Thirty-one years later, she has not had any student loans forgiven and her balance has compounded. 

Her experience mirrors that of 2 million borrowers who鈥檝e . A mountain of red tape and convoluted paperwork stands to keep borrowers in 鈥渓ifetime sentences.鈥� 

Intended as a temporary strategy to help borrowers pay down balances post-college, IDR plans rolled out in 1995. Borrowers pay smaller balances, based on income, and debt spreads out over 20-25 years as opposed to the original 10. 

Once borrowers are back on track, perhaps with higher paying career moves years after graduating, they can go back to standard payment plans. 

But getting 鈥渂ack on track鈥� to paying off the original loan has proven impossible, particularly for Black borrowers, with mounting costs of living, racial wealth gaps and stagnant wages. 

鈥淸An IDR plan] provides immediate relief, but it doesn’t offer a solution to borrowers who are looking at a potential lifetime death sentence, as many Black borrowers in our study described 鈥� It just offers a way for them to kind of manage that debt, but not really a solution to pay it off,鈥� co-author Bishop said.

Today, IDR is touted as the primary solution to the student debt crisis, over cancellation or forgiveness.

Yet those in IDR plans rarely see balances go down, only mount with interest. The high debts harm borrowers鈥� chances of buying homes, renting apartments or accessing credit lines 鈥� even more so than those with typical student loan plans. 

鈥淭hose in the study that were actually enrolled in an IDR plan 鈥� more frequently reported that loans were a source of financial stress. They had a negative impact on their overall mental health, as well as a negative impact on their quality of life,鈥� Education Trust researcher and report co-author Jonathan Davis said. 

About a third of graduates surveyed even postponed having a child because of their student loan debt; about half have put off retirement savings. 

Even more striking, 67 percent of those earning $75-100,000 delayed buying a home because of their student loan debt. The number is nearly just as high, 61 percent, for those with graduate degrees, in theory, better positioned in their careers.  

Chronicling the human toll behind current federal loan policies, the report makes the case for race-conscious reform. 

The future of loan policy, as told by borrowers

鈥淚 mean, realistically, I think the [student loan] system is working exactly as we expect it to 鈥� no one鈥檚 surprised that we somehow built a financial aid process and policy and set that up to only consider your annual salary, as if [Black people] all have the same net assets,鈥� one borrower said.

First and foremost among the solutions, with 80 percent surveyed in support, is wide scale debt cancellation. 

Researchers told 社区黑料 that when it came time for cancellation through IDR plans or public service loan forgiveness 鈥� which 鈥� Black borrowers were often disqualified because of technicalities.

Jalil Mustaffa Bishop said the administrative process is intentionally difficult, similar to bankruptcy filing.聽

鈥淭here’s a lot of clauses, really it means that a borrower has one misstep that may derail their whole repayment strategy. And that’s also a part of the design … that was built into student loans to make it really hard to get from under this debt. We should see that as a decision that was made, not just kind of an accident that came into being.鈥� 

Common proposals cap forgiveness at $10,000 or suggest 鈥渕eans-testing鈥�, or limiting who is eligible, for example, to those making under $100,000. Yet Black graduates experience greater wealth gaps and higher debt than any of their peers. 

Limits or caps on forgiveness would 鈥渄isproportionately exclude Black borrowers.鈥� They鈥檙e more likely to have high balances and take on graduate school debt to 鈥渉edge against discrimination鈥� in the workforce, the report cautions. They鈥檙e also least likely to amass wealth long term because of systemic racism. 

Four years after graduation, Black graduates typically owe as white graduates 鈥� a result of racial , and needing more in loans because of generational wealth gaps.

Borrowers and , currently capped at $6,495 annually. The increase would entirely eliminate the need for federal student loans for about 75 percent of families living in poverty, and 85 percent of low-income Black families.  

For years, funding declines drove up university tuition as wages stayed stagnant. Accordingly, fewer and fewer families can afford higher education.

And 鈥渢he purchasing power of the Pell Grant, the nation’s most important college grant, has declined significantly,鈥� Education Trust policy expert Jackson said.

The National Study on Black Student Loans research team will roll out more reports on specific populations and issues within the student debt crisis, like Black women and parent borrowers. They鈥檙e also in the process of building a data hub for students, policymakers and advocates to explore research, solutions and students鈥� lived experiences. 

Black borrowers鈥� experiences also point to a need for transparent loan counseling, particularly when facing income-driven plans that compound for decades with lower monthly payments.

鈥淲e still found that those in plans 鈥� that by design are supposed to help you better manage your loan repayments 鈥� are unable to afford basic necessities like food, rent, healthcare, contributing to saving, childcare鈥� We want to humanize that. While these plans by intent were designed to do one thing for black borrowers in our study, they have not yet proved to meet that intention,鈥� report co-author Jonathan Davis said.

Disclosure: Marianna McMurdock was an intern at the Education Trust-West in the summer of 2020. 

Signed by Gov. Dan McKee on June 1, creates a Dec. 31 deadline to develop and approve state-specific consumer education and personal finance standards. By the start of the 2022-23 school year, all public high schools in Rhode Island must offer a standards-aligned course.

鈥淚t’s very aggressive to get these standards up and running in the time frame that we have set out, but we know that it’s really necessary,鈥� state Education Commissioner Ang茅lica Infante-Green said. On average, , at $36,193.

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Having met with students statewide who felt they weren鈥檛 prepared to go onto college, and given the pandemic鈥檚 impact on student engagement, the commissioner told 社区黑料 this moment was the time to solidify what they had built momentum behind for years.

鈥淸Students] felt like this was something that they were being shortchanged [on]. So we made it a point to push this agenda.鈥�

Rhode Island approved the national Council on Economic Education standards in 2014. On average only about 5 percent of Rhode Island students receive financial literacy education, according to the state education department, given that schools could choose whether or not to adopt the curricula.

Last year, senior Saloni Jain took a personal finance course in a hybrid learning setup, with three days of learning online, at the suburban East Greenwich High School. She said course simulations, like completing mock returns on and creating a budgeting spreadsheet, kept her engaged during virtual learning.

鈥淲e were getting paychecks 鈥� how do we put that money towards a 401(k) and pay all our bills and pay down our credit card or student loan debt? That was really helpful to visualize, you know, how we might live in the future,鈥� Jain said. 鈥淚t was just a one-semester course, but it honestly changed the way I think a lot.鈥�

Nationally, have some version of financial literacy standards, which may be incorporated into math or civics classrooms, though be completed before graduation.聽

In 2021, strengthening personal finance education. Advocates contend that literacy is key to breaking cycles of poverty, particularly as the younger generation deals with economic fallout from the pandemic. When loans, budgeting and debt management are explicitly explored during the school day, young people are exposed to as they head into adulthood.

A showed that financial literacy graduation requirements result in lower credit card balances and high-interest student loan debt for lower -income students, and decreases in private loans for higher-income students. Working- and lower-class students who took financial literacy courses were also able to work less while enrolled in college, which could encourage college persistence and graduation. Expanding access to personal finance courses and support homeownership down the line.

Even within states considered to have the strongest standards and requirements, students seek more real-world connections to prepare them for the future. Whitman Ochiai, who recently graduated from high school in Alexandria, Virginia, described his mandatory course as 鈥渕ore broad than it was deep鈥�.

Left wondering about retirement decisions, building a balanced budget and the intuition behind large purchases, he started the in 2019 to explore thosetopics. He said there鈥檚 been increased interest throughout the pandemic, likely with more students working and families facing economic uncertainty.

鈥淎 lot of times the only people who have access to this information are the people who would have had access to it anyway,鈥� Ochiai said. 鈥淓specially for first-generation college- goers and students, and parents that may not be homeowners, this is a pathway for them to have a deeper understanding of finance.鈥�

Some Rhode Island teachers created elective courses in their schools in recent years, heeding students鈥� desires and seeing how financial literacy may enable connections to hard-to-grasp concepts like compounding interest. Before now though, funding and implementation was left to individual teachers or schools to prioritize.

Samantha Desmarais teaches math, financial literacy and computer science at Central Falls High School, which serves predominantly low-income Latino and Black students in a working class city just north of Providence. She hopes the legislation will open the door to financial support from the state for credentialing and hiring, building more capacity to teach the subject.

Otherwise, she said, 鈥渢here’s going to be disproportionality between the districts that are able to shimmy around their budgets or their staff and make it work, and the districts that are weighted under all of these other things.鈥�

Desmarais teaches about three sections of finance per year; enrollment is always on the higher side even with its elective status, at about 25 to 30 students per class. This fall, she鈥檒l also teach a section for language learners, which introduces students to American money systems and credit.

鈥淚f you enjoy learning something today, spread that news and talk about it with your friends. There’s no reason why talking about money has to be this taboo subject,鈥� she tells her students.

Advocates say that personal finance education provides an opportunity for students to break down any stigmas about money conversations before they head into large financial decisions, like student loans, car ownership and credit card debt. Lessons learned may also make their way home and support families facing economic challenges.

鈥淚 look at the state’s implementation of this guarantee of a financial education as sort of being a gateway to some meaningful engagement with families,鈥� said Pat Page, vice president with the Rhode Island personal finance coalition and a business educator.

Page, Rhode Island鈥檚 former teacher of the year, has been a vocal advocate for broader financial education for years, and was one of the first in the state to teach a standalone course. She supported students, including Sunny Sait, in testifying in favor of broader financial education to the state legislature 鈥� in 2014, 2019 and again in 2021.

Though Sait took Page鈥檚 class two years ago, he said he still uses the concepts daily. Currently on a gap year after graduating this spring, he鈥檚 opened up a Roth IRA, and budgets his internship paycheck to make sure he can still afford things he loves, like karate.

鈥淢y mindset definitely shifted a little bit from thinking of money in terms of things, but instead thinking of money as a means for growth, saving and investing. I really had my focus shift from purchasing, like being a consumer, to becoming an investor.鈥�

Many describe the effort to make financial literacy a reality for all Rhode Islanders as both a grassroots and grasstops effort, pushed by students and teachers, but also state leaders, like Treasurer Seth Magaziner, who helped introduce the legislation.

鈥淭he strongest advocates who worked very hard to get this bill passed were teachers and students. Students who very much wanted this to be taught, and teachers who are ready to teach it,鈥� said Magaziner, who began his career as an elementary school teacher and his run for governor.

The treasurer and education commissioner both see the law鈥檚 signing as phase one of creating a broader financial literacy landscape in the state 鈥� their hope is to expand lessons to middle and elementary grades. The education, Magaziner says, will make a particular difference in Rhode Island.

鈥淲e do have a large rolling immigrant population, students who are English language learners. We have one of the highest poverty rates in the Northeast. Financial education is not a panacea, it’s not a cure-all, but it is an important part of the puzzle for how we solve these inequities, and correct them.鈥�