Online, student borrowers are proposing a variety of solutions to lessen their difficulties when loan installments start up again on October 1: Cite Scripture and make any payment, small or large.
A recent viral TikTok with more than 50,000 likes has Dawn Cowle talking about a letter she wrote to her student loan provider Nelnet that included the verse, “At the end of every seven years you must cancel debts.”
Cowle stated that she was largely joking.
If Nelnet responded, ‘Oh, OK, sure, no questions asked,’ that would be absurd. You are unable to repay your loans. You’ve got it,” she exclaimed.
But like many other indebted borrowers, she has had anger issues ever since the Supreme Court struck down President Joe Biden’s proposal to forgive up to $20,000 in student debt for each eligible borrower on June 30.
Cowle asserted that hurling the Bible at Nelnet “would show that we weren’t in a position to simply continue to lay down and be steamrolled.” (A request for comment from Nelnet was not answered.)
A vocal online community of activists and borrowers, some of whom have long advocated for government debt relief or, failing which, a widespread boycott of student loan repayments, has been revived by sentiments like Cowle’s. However, experts caution that the majority of people run the risk of suffering catastrophic consequences if they don’t pay up.
Robert Farrington, the founder of the College Investor, an organization that strives to increase young people’s financial literacy, said that the financial consequences of not paying off your student loans are likely one of the worst financial decisions you can make as an individual.
The concept of purposeful nonpayment “is not new,” according to Farrington, “but I think since now payments will resuming, it’s definitely receiving a lot more traction.”
According to the Education Data Initiative, more than 45 million Americans have federal student loans totaling more than $1.7 trillion, with the typical borrower paying over $37,000. Only 8% of students borrow from private issuers, with the majority of student debt being federal.
In a recent popular video, Shahem Mclaurin, a TikTok creator with over 500,000 followers, posed the question to viewers: “Will people start paying back their loans once the Supreme Court rejected Biden’s plan?”
Mclaurin added, “And this is not a play-acting, joking situation. “Are we not paying—like collectively, as a whole—meaning that if you put a payment down, you’re breaking, you’re crossing the line?”
Mclaurin’s concept received thousands of comments and “stitches,” in which users of TikTok combine content from other users’ postings with their own. The first-generation college graduate from NYU graduated in 2020 with a master’s degree, but she still owes $150,000 and has no immediate plans to pay it off due to the high cost of living.
Regarding the potential consequences, Mclaurin remarked, “I worry every day.” “I don’t always get enough sleep at night. I’m quite anxious about it.
The Biden administration announced a one-year grace period beginning this fall in response to the Supreme Court decision, shielding borrowers from immediate consequences for nonpayment even as interest starts to collect once more on September 1. Furthermore, under long-standing federal regulations, borrowers who already owe money on student loans can often have their payments temporarily suspended if they decide to return to school. However, interest will frequently keep adding up.
As Cowle pursues her MFA in screenwriting, her loans are currently postponed; payments will begin six months after she graduates in a few years. She claimed she didn’t use a second degree as a deferral tactic, but others claim they did.
Dominic McDonald, an Albion College alumnus from May 2022 in Michigan, claimed that the decision hastened his decision to submit an application for graduate school this year in order to defer paying back his loans. I’ve never had to do it before, so I’m under some financial hardship, he admitted.
According to Farrington, there are methods to make payments that are less expensive without risking fines. He believes that half of all student loan borrowers are eligible for forgiveness programs of some kind, but many of them haven’t applied for them.
People are simply passing up money for loan forgiveness that they should be able to receive, he claimed.
On its website, The Debt Collective, a group established in 2012 with the Occupy Wall Street movement, has been advocating for a “Can’t Pay! Won’t Pay! Student Debt Strike” and providing guidance on “the multiple ways you can securely get to nonpayment.”
These include income-dependent repayment plans, which alter monthly payments based on a borrower’s income, and public service forgiveness of debts, which enables those working in government as well as other civic-oriented positions to have their loans erased. Along with other approaches, Farrington supports these and expects that more people will adopt them.
According to the press secretary for the Debt Collective, Braxton Brewington, “We internally are like, ‘Oh wow, we need to get ready for this influx of people,'” in the wake of the Supreme Court decision. He claimed that as October 1 draws closer, interest in the group’s debt strike will likely increase even more.
Brewington responded that the group urges people to avoid failing on their loans if at all possible when asked if it worried that its messaging could be taken as a call to just boycott repayments permanently. But he added that the group wants to draw attention to the difficult financial situation that many borrowers are in.
“What’s blanketed throughout the entire discussion about ‘Should people just not pay?’ is people don’t want to be subjected to the severe consequences of the federal government,” he said, noting that the Debt Collective advises borrowers to use their funds on necessities like food, medication, or housing instead of repaying their loans. There isn’t much of a choice, he declared.
A few debtors have reported having their paychecks garnished while others have warned others online against nonpayment. Other initiatives are emerging to provide informal or crowdsourced support to cash-strapped debt holders through mutual aid and community funds. Even the idea of establishing a lottery system to assist in weekly student loan repayment has been proposed by a TikTok user.
Josie Bridges, a single mother from Portland, Oregon, claimed she qualified for the White House plan’s full loan forgiveness. She claimed that even if she wanted to, she couldn’t afford to resume payments this fall between rent and other essential costs.
She added, “I need it, even if [the monthly payment] is a couple of hundred dollars.
With anxiety, Bridges is observing the date on the calendar move closer to October. She’s even thinking about enrolling in a few extra classes, adding to her debt, just to put off the upcoming payments.
I’m stressed out now that they’re back, she added.