The 2020 election “has huge implications for student debt”
As millions of Americans voted on Tuesday – after more than 100 million votes already – the stakes are high for more than 40 million Americans holding student loans.
“This election has huge implications for student debt,” Debbie Cochrane, executive vice president of the Institute of College Access and Success, told Yahoo Finance Live (video above). “The two candidates who are on the ballot… have very different versions of college costs, college affordability, and student loan debt.”
President Donald Trump’s first term was “really a lot regulatory-focused” and “didn’t necessarily invest more in public higher education or financial aid,” she explained, adding that “a lot of these efforts were aimed at freeing the college for profit ”. industry.
A Biden administration, which has a “very ambitious agenda,” she continued, could reverse many of these policies while making college much more affordable for all students, especially those from low-income families. income.
Performance of for-profit organizations during the pandemic is ‘not surprising’
Regardless of how the election turns out, the pandemic and resulting recession led for-profit colleges to register a surge in enrollment in the fall.
According to National Center for Student Research, for-profit colleges saw a 3% increase in undergraduate enrollment this fall, while community colleges saw a 9.4% drop. For-profit colleges also saw a 9.3% increase in graduate enrollment, while public four-year colleges saw a 4% increase in graduate students.
When it comes to the number of first-time students, the difference is stark: While four-year public colleges saw a decline of around 13.7% across all age groups – the most pronounced being those between 21 and 24 – for-profit schools saw an enrollment increase of 3.7%. Students in the 21 to 29 age groups made up the largest increases.
“We have seen a massive expansion in for-profit college enrollment and we have seen the subsequent damage this has caused,” said Stephanie Cellini, professor of public policy and economics at George Washington University, noted in an article for the Brookings Institution Think Tank. “The difference this time around is that we have the evidence to predict what’s going to happen.”
And given the likelihood that Democrats will revert to Obama-era policies to tackle predatory behavior – or even go further and put more safeguards in place – the current situation is “this is a very sensitive time for the world. ‘for-profit academic industry,’ Cochrane added, noting that the simmering problems in the for-profit industry during the Trump administration, schools are likely to “grow exponentially.”
‘All hope is not lost’
The first thing the presidential winner should do, Cochrane stressed, was extend the payment break President Trump first announced in March.
The interest-free break on all student loans – which has been expanded until the end of this year – “should be extended and applied to everyone, not just federal student loan borrowers,” Cochrane said.
“If student loan repayments resume on Jan. 1, repayment will exacerbate the hardships created by unprecedented labor shocks and continuing economic hardship,” 77 organizations – from the American Federation of Teachers to the NAACP – said. letter to Education Secretary Betsy DeVos. “If the cliff is not resolved, borrowers will find it harder than ever to make ends meet as they are thrown back into forced repayments or collections as the economy continues to suffer.”
Either way, there is a clear opportunity for more borrowers to get a loan. income based repayment plan and pay off debt at an affordable rate.
“All hope is not lost if people still cannot pay off their student loan debt, but they have to pick up this pace” of paying off their student loans, Cochrane added.