Student loans in the United States
[4]: 1 [5] Loan amounts vary widely based on race, social class, age, institution type, and degree sought.Student loans became more broadly available in the 1960s under the Higher Education Act of 1965, with the goal of encouraging greater social mobility and equal opportunity.The Obama administration claimed that guaranteed loans benefited private companies at taxpayer expense but did not reduce student costs.[21] As of July 1, 2013, borrowers determined to be disabled by the Social Security Administration would be accepted for loan discharge if the SSA placed the individual on a five- to seven-year review cycle.[25] As of January 1, 2018, the Tax Cuts and Jobs Act of 2017 established that debt discharged due to the death or disability of the borrower was no longer treated as taxable income.[35] The same year, Theresa Sweet and other student loan debtors filed a claim against the US Department of Education, arguing that they had been defrauded by their colleges.[38] According to repayment data released by the Education Department, in December 2021, just 1.2 percent of borrowers were continuing to pay down their loans during the over two years of optional deferment.[40] According to Sallie Mae, as of 2021, 1 in 8 families are using private student loans when federal financing does not cover all college costs.[43] In August 2021, the Biden administration announced it would use executive action to cancel $5.8 billion in student loans held by 323,000 people who are permanently disabled.[46] In addition, since federal student loans do not limit the amount a lender can borrow, this has allowed public as well as private colleges to increase their tuitions.[47][48] In June 2023, the U.S. Supreme Court ruled in favor of Nebraska to block Biden's plan to forgive federal student loans.Once aggregate limits are met, the student is ineligible for additional Stafford loans until they pay back a portion of the borrowed funds.They are not eligible for Income-Based Repayment plans, and frequently have less flexible payment terms, higher fees, and more penalties, than federal student loans.[93] In 2020, critics argued that the SLAB market was poorly regulated and could be headed toward a significant downturn, despite perceptions that it was low risk.While credit card debt often can be discharged through bankruptcy proceedings,[109][110] this option is not generally available for federally subsidize or insured student loans.[111][112] Unless the loan can be proven not to be an educational benefit,[113] those seeking to discharge their debt must initiate an adversary proceeding, a separate lawsuit within the bankruptcy case where they illustrate the required hardship.Based on legislative history and the decisions of other district and bankruptcy courts, the district court adopted a standard for "undue hardship" requiring a three-part showing: (1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.Ultimately, this litigation strategy has distorted the law and cultivated the myth of nondischargeability.The study found that debtors who obtain favorable outcomes do not possess unique characteristics differentiating them from those who do not seek discharge and estimates that 64,000 individuals who filed for bankruptcy in 2019 would have met the hardship standard.[42][43] Some critics of financial aid in general claim that it allows schools to raise their fees, to accept unprepared students, and to produce too many graduates in some fields of study.[122][123] Many students cannot get loans or determine that the cost of going to school is not worth the debt, believing that they would still be unable to make enough income to pay it back.Critics have contended that flat-rate pricing contributes to inefficiency and misallocation of resources in higher education and lower productivity in the labor market.Stagnating wages, rising tuition, and the shrinking of government funding for higher education result in more and more borrowers being unable to repay and are forced to carry that debt burden well into the future, "impairing economic well-being for a widening and diversifying swath of the population, inhibiting savings, increasing precarity, and draining the very incomes the student debt was supposed to increase."The report says that, unless something changes, future generations will suffer the same consequences of student loan debt as millennials have, including "delayed marriages, reduced childbearing, less entrepreneurship, and decreased retirement security, among others.The False Claims Suit was filed on behalf of the federal government by former DOE researcher Dr. Jon Oberg against Sallie Mae, Nelnet, and other lenders.It is an outrage that we make parent PLUS loans to the poorest families when we know they almost surely will default and have their wages and social security benefits garnished and their tax refunds confiscated, as $2.8 billion was in 2017.It is an outrage that we saddled several million students with loans to enroll in untested online programs that seem to have offered no labor market value.It is an outrage that our lending programs encourage schools like USC to charge $107,484 (and students to blithely enroll) for a master's degree in social work (220 percent more than the equivalent course at UCLA) in a field where the median wage is $47,980.[144][145][146] Sen. Bernie Sanders (I-Vt.) and Rep. Pramila Jayapal (D-Wash.) introduced legislation in 2017 to "make public colleges and universities tuition-free for working families and to significantly reduce student debt."The policy would eliminate undergraduate tuition and fees at public colleges and universities, lower interest rates, and allow those with existing debt to refinance.[147][148] Sanders offered a new proposal in 2019 that would cancel $1.6 trillion of student loan, undergraduate and graduate debt for around 45 million Americans.
National Defense Education ActHigher Education Act of 1965HEROES ActU.S. Dept. of EducationCost of attendanceExpected Family ContributionFederal Direct Student Loan ProgramFederal Family Education Loan ProgramPerkinsStaffordConsolidation LoansPrivate student loansEducation in theUnited StatesHistory of education in the United StatesHistory of education in ChicagoHistory of education in KentuckyHistory of education in MassachusettsHistory of education in MissouriHistory of education in New York CityLiteracyNormal schoolsApprenticeship degreesArt educationCivic educationMusic educationLegal educationLaw schoolMedical educationMedical schoolNursing degreesEnvironmental educationLanguage educationMathematics educationSex educationVocational educationEducation policy issuesAccreditationPrimary and secondaryPost-secondaryEducational attainmentPost-secondary issuesBubbleCost and financingCredentialismElite overproductionStudent financial aidCharter schoolsInequalityAchievement gapsRacial achievement gapDesegregation busingGender achievement gapHead StartSchool choiceRacial diversitySchool segregationStandards-based reformSchool corporal punishmentSchool mealsSchool violenceSexual harassmentForeign involvementSpecial educationApprenticeshipSchool-to-work transitionCommunity collegesFor-profit higher educationFor-profit collegesResearch universitiesCommunity schoolFull-service community schoolsEarly childhoodK–12PrimarySecondarystudent loansfinancial aidscholarshipsgrantsbankruptcyStudent loan debtsocial classdegreefor-profit collegeUniversity of PhoenixWalden UniversityNova Southeastern UniversityCapella UniversityStrayer UniversityNational Center for Education StatisticsSoviet UnionSputnikBank of North DakotaStudent Loan Marketing AssociationDepartment of EducationHigher Education Opportunity Act of 2008credit card debtStudent Aid and Fiscal Responsibility ActObama administrationHealth Care and Education Reconciliation ActSocial Security AdministrationTax Cuts and Jobs Act of 2017taxable incomesunsetLendKeySoFi (Social Finance, Inc.)CommonBondCredibleFederal Reserve Bank of New YorkBetsy DeVosDonald TrumpreliefCOVID-19 pandemicFedLoanNavientU.S. Second Circuit Court of AppealsBiden administrationexecutive actiondisabledElena KaganU.S. Supreme CourtBiden v. NebraskaU.S. higher educationPell grantsFederal student loansNew York Times