We’re pretty sure you already know this by now, but in case you were out hiking and missed the news: President Joe Biden is not only extending the pause on student loan payments to the end of the year, but most importantly, he’s moving to forgive up to $20,000 in federal student loan debt.
The pros and cons of this announcement have been a major debate in our email inbox over the past day. While perspectives shared to Denver7 | Your Opinion range from how this will help some while others feel left out, to what precarious economic situation student loan forgiveness is going to put the country in for the future, the debate is not as black and white as you might think.
For many Coloradans though, this is good news. So let's do a deep dive into who is eligible and what all this could mean down the road.
Wondering if you’re eligible? We'll definitely get into all the details. We’ve more got more here.
In this 360 In-Depth report, we’ll dive into:
- Who's eligible for student loan debt forgiveness
- How student debt relief will affect Coloradans
- Why some argue this is a bad idea
- The unintended consequences of student loan debt forgiveness
Here’s what’s in the plan
The Department of Education said it will cancel student loan debt for individuals who make less than $125,000 and married couples who make less than $250,000.
Borrowers who had a Pell Grant in college are eligible to see up to $20,000 in debt cancellation. People who didn't receive a Pell Grant could get up to $10,000 in student loan forgiveness.
People who have Federal Family Education Loan (FFEL) loans through the Department of Education are also eligible for debt relief. Those who received FFEL loans from a private company may not be eligible for student debt cancellation, though the department is working to determine whether borrowers with those commercially held FFEL loans will be eligible for relief, according to the Washington Post.
People who aren't sure if they were awarded a Pell Grant or who aren't sure whether their FFEL loans are managed through the Department of Education may find the answer by logging into their FAFSA account. Keep in mind the Federal Student Aid website is currently experiencing delays from everyone trying to see whether they received a Pell Grant or not.
If you’re eligible, what do you have to do?
As exciting as student loan forgiveness sounds, there will be an application you’ll have to fill out to claim the relief. More on that will be announced in the coming weeks, officials with the Department of Education said.
For nearly 8 million borrowers, the relief will be automatic because of information already available to the department.
Future repayment plan changes
The Department of Education is also launching a new rule that it says will lower future monthly payments.
"It would cut in half—from 10% to 5% of discretionary income—the amount that borrowers have to pay each month on their undergraduate loans, while borrowers with both undergraduate and graduate loans will pay a weighted average rate," the department said.
Loans will also be forgiven for any borrower who has paid for ten years if they had an original loan balance of $12,000 or less. The current rule allows loans to be forgiven after 20 years. The new rule would also cover unpaid monthly interest, the department said.
Pandemic repayment pause
President Biden extended the repayment pause that was initiated at the beginning of the pandemic. The pause will now expire on Dec. 31, 2022. Biden said that will be the final extension of the pause.
More of a visual learner? Watch our 360 In-Depth report by clicking in the video below.
For many Coloradans, the news brings a sigh of relief
While the fierce political debate raged wherever you log into social media on Wednesday, some Coloradans riddled with student loans are just taking time to celebrate.
And as a single mother of four, life hasn't been cheap for Maisha Fields.
"Raising children by myself, putting them through college themselves, making sure that they have all the things that they need, the extracurricular activities that they're involved in, paying a mortgage, paying a car note, and then also paying federal loans," she told Denver7’s Pattrik Perez.
Maisha’s student loan debt at one point totaled about $70,000. While some of that has been paid off and forgiven through her career as a healthcare worker, she still has about $42,000 left.
"It's hard to make ends meet sometimes," Fields said.
But things will now get a little easier for her and millions of others.
"I feel like I won the lottery today, I'm not gonna lie about that," she said. "I would have loved if the administration, say, were making it completely debt clear and free, but I am grateful for $10,000 because it's $10,000 I didn't have."
For Fields, this helps paint a path forward to becoming debt-free, but she acknowledges the work is just beginning.
"Justice looks like an education system where everyone has access and doesn't leave an educational system with $50,000, $100,000 or $300,000 worth of debt and no job to go to," she said.
She's hoping our next generation will continue to hold our elected officials accountable to make higher education accessible for all.
"Students who are in college right now, they're gonna continue to be a part of that narrative to hold people accountable and responsible to lift that burden for them as well," Fields said.
She’s not alone, though. There are 774,000 student loan borrowers in Colorado who are in the same boat, as they owe a little less than $37,000 each on average, according to the Education Data Initiative.
Denver7’s Rob Harris found that, in total, Colorado borrowers owe $28.5 billion in student loans.Biden’s plan to cancel student loan debt would help nearly a third of Colorado residents who will have their entire student debt erased with $10,000 of forgiveness, research from Student Loan Hero shows.
What's fair when it comes to student loan debt relief?
A point to underscore is there’s much debate on the “fairness” and the long-term impact of student debt forgiveness. And while college remains out of reach financially for many people, others, including Metropolitan State University President Janine Davidson say the investment in high education is worth it, arguing expensive private schools, such as law schools and medical schools, are the ones behind the rising debt people hear on the news.
“It's not your undergraduate degree,” Davidson said in a recent Denver7 360 | Your Opinion video. “The average undergraduate degree debt for a public university like MSU Denver is only about $25,000. That's a pretty darn good investment in your future Given that you will make nearly a million dollars or more.”On the political side of things, Senate Minority Leader Mitch McConnell called Biden's plan "unfair."
"President Biden's student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt," he said.
McConnell also argued the plan would make inflation worse.
Biden disputed that claim and attacked Republicans for approving tax cuts that he says the wealthy benefitted from under the last administration.
“I find it interesting how some of my Republican friends who voted for those tax cuts...think we shouldn’t be helping these folks," Biden said.
Politicians arguing over the cost of the plan is but a side of the debate, as up until this point, people across the U.S. were mostly split on whether enough is being done to relieve student loan debt.
A poll conducted by CNN this past spring found 49% of Americans thought the U.S. government was doing too little, while 24% thought that the government was doing too much.
Age factors also contributed to how people felt toward student loan cancellation: 70% of adults younger than 35 said the government was doing too little, and that number dropped to 50% for those 35 to 49, going down again to just 35% among those aged 50 and older.
Will canceling student loans make inflation worse?
Many economists say it’s plausible, but it’s not set in stone and it’ll depend on how people change their spending habits.
A CNBC poll found 59% of Americans believe forgiveness will worsen inflation as that will give people with canceled student loans more money to spend and therefore, increase inflation.
But many economists do not agree with that assessment.
Economic Policy Institute President Heidi Shierholz argues that because we've already become accustomed to our finances without student loan payments over the past two years due to the coronavirus pandemic, any impact on inflation would be greatly limited.
Moody's Analytics Mark Zandi says forgiveness and the resumption of payments would limit growth and be disinflationary.
“With the President’s plan on student lending coming into relief, it is clearer that the impact on growth and inflation in 2023 will be marginal. Ending the moratorium will weigh on growth and inflation, while debt forgiveness will support them. The net is largely a wash,” he said in a Twitter thread that goes into more detail on what student forgiveness would mean from an economic standpoint.
Finally, an assessment report from the Committee for a Responsible Federal Budget (CRFB) by the Roosevelt Institute instead argues that canceling student debt would increase wealth but not inflation.
"There ain't no such thing as a free education"
Denver7 360 | Your Opinion
What should be done about student loan forgiveness? | Your Opinion
While many consider student debt loan relief to be a positive not just for individuals but the economy as a whole, others aren’t so sure and say there could be some unintended consequences down the road.
In a 360 | Your Opinion piece earlier this year, economic professors Alexandre Padilla and Glenn L. Furton from Metropolitan State University in Denver argued the following should student loan cancellation become a reality for many:
- Higher university attendance: More students will attend college than might have otherwise, leaving “the road not taken” less valued, even though many students are perfectly suited to create successful careers without burdening themselves with a four-year degree.
- Higher tuition: Increased demand for university attendance will raise the price of tuition. Larger budgets will disproportionately fund administrators and campus amenities (as opposed to education) as schools attempt to attract more students.
- Confused labor markets: If students aren’t paying the full cost of their decisions up front — or they expect future policies to relieve their financial responsibility — then they will choose majors with myopic prodigality. This will leave labor markets irreversibly disordered and in need of correction, as skilled workers do not appear at the flick of the wrist, nor will they flow from the tip of any lawmaker’s pen.
- Future expectations: Future cohorts will come to expect absolution, leaving loose ends to present systemic issues untied. When future graduates find their educational investments undervalued, they will form an effective political interest group, with similar demands on the taxpayer — only this time, they’ll be armed with a powerful precedent.
How much student loan debt forgiveness helps the approximately 43 million Americans who combined owe $1.6 trillion remains to be determined.
MORE IN-DEPTH REPORTS
Catalytic converter thefts: What cars are being targeted, where it's happening, & how to protect yourself
DENVER — As catalytic converter thefts spike in Colorado and across the country, Denver7 Investigates is taking an in-depth look at where most of the thefts are happening, why catalytic converters are being targeted, and some of the areas along the Front Range that are seeing the highest number of thefts.
The catalytic converters are key parts of vehicles' emissions systems. They contain expensive precious metals which help turn some of the most noxious pollutants into cleaner emissions. And if you've ever had to replace yours because it was no longer working, or because it had been stolen, you know that they aren't cheap to fix or replace.
But thieves are sometimes making hundreds of dollars selling stolen catalytic converters to scrapyards and others, Denver7 Investigates found, which is making the illegal operations thousands of dollars because of the high volume of converters that can be stolen in almost no time at all.
In this Denver7 360 In-Depth report, we'll tell you about:
- The increasing number of thefts in Denver and Boulder over the past two years.
- The areas where thieves seem to be targeting the most vehicles.
- What vehicles are targeted the most in these areas
- Ways to try to prevent your catalytic converter from being stolen and to keep yourself safe if thieves target you.
Denver7 Investigates' Tony Kovaleski pulled and analyzed data from Denver and Boulder that showed nearly 4,000 catalytic converters were stolen of vehicles in the two cities since the beginning of 2020 — though 3,589 of them were stolen from Denver.
And the number of thefts has risen sharply over the past year, as 79% of the converters stolen out of Denver were taken in 2021.
Where are thieves targeting the most vehicles? It shouldn't a surprise, but it's happening at parking lots where people leave their cars for an extended period.
In Boulder, more than a quarter of the city’s 339 reported catalytic converter thefts took place at the Table Mesa RTD Park-N-Ride. In Denver, three of the top four catalytic converter theft hotspots are also at RTD Park-N-Rides. The fourth hotspot in the Mile High City? Denver International Airport.
It's not just RTD Park-N-Rides and the DIA where these car parts are being taken by thieves, though. Small car dealerships are also struggling as they try to make ends meet.
At this point you may be wondering: Is my car safe from these thieves? If you own a Honda, you may want to be extra careful where you leave your car, as data shows they were at the top of the list for catalytic converter thefts, with 1,145 stolen over the past two years. Toyotas, Fords, Jeeps and Chevys made the Top 5 on the list.
To view the infographics and data below fullscreen, click this link.
So what can you do to protect your vehicle and yourself from these thieves?
Denver police recently revealed they're seeing a pattern of catalytic converter thieves using armed lookouts while the emissions devices are being stolen and warned people not to engage with the thieves, as they've logged around 135 reports of people showing a firearm or pointing one at someone during a catalytic converter theft over the past three years.
Here's what they suggest to protect your vehicle and deter thieves: Have your local police department or auto shop engrave your VIN number onto your catalytic converter or put cages around it.
People can also have the bolts that hold catalytic converters in place welded to further deter thieves.
What else is being done? The automotive industry is banding together to push for legislation to fix the issue.
Senate Bill 22-009 in the Colorado legislature seeks to re-allow the sale and instillation of aftermarket catalytic converters in cars registered in the state. That practice was banned in 2018 under a new set of transportation regulations that sought to decrease emissions.
Critics of the bill say that re-allowing aftermarket catalytic converters will allow emissions to increase, but advocates of the bill say it is necessary to stop these thefts.
Editor's Note: Denver7 360 | In-Depth explores multiple sides of the topics that matter most to Coloradans, bringing in different perspectives so you can make up your own mind about the issues. To comment on this or other 360 In-Depth stories, email us at 360@TheDenverChannel.com or use this form. See more 360 | In-Depth stories here.