Opinion: Virus gives colleges the chance to do right by debtors
Across the United States, colleges and universities shut down and went virtual for the majority of the spring semester due to the coronavirus pandemic. Students, especially seniors anticipating a graduation ceremony, were necessarily robbed of the full college experience that they signed up and paid for.
An online Zoom class from your bed is not the same as learning to be self-sufficient on a college campus, meeting with professors, and having access to libraries, gyms, and dining halls. The former is certainly not worth $40,000.
For student loan borrowers that have already graduated, they are now in a workforce that has to battle an economy sinking at levels not seen since the Great Depression. With finances tight, a recent LendEDU survey found that 68% of federal student loan borrowers were worried about making monthly student loan payments due to the coronavirus and its impacts.
Another 54% would not have been able to make their very next federal student loan payment.
Smartly, recent legislative action under the CARES Act has halted all federal student loan payments until Sept. 30. Additionally, interest on federal student loans will not accrue until the same date.
If the economy continues to worsen by that September date, Congress should seriously consider extending the federal student loan grace period for another six months.
But, the biggest higher education issue going forward will not be in regards to graduated student loan borrowers already in repayment, but those senior students stripped of their graduating semester, all other current students, and all future students who did not or will not receive the high-priced college experience because of the pandemic.
And the answer to these questions lies with those who have always had the most control over the entire higher education experience: the colleges and universities themselves.
All current college students, including seniors, that took on federal student loan debt to afford the 2020 spring semester should have those government loans partially repaid by their respective colleges at a rate that more accurately reflects the experience these students received.
Federal student loan borrowers owe the government who has already paid the colleges and universities for tuition; there is no sensible reason that colleges should be receiving full tuition revenue for this spring when the students didn’t get the full experience and are ultimately the ones that are financially suffering.
Students that did not need student loan debt to afford this semester should also get money back from their institutions. We are now starting to see students file class-action lawsuits against the likes of Vanderbilt and Brown based on this premise of paying for the full college experience but not receiving it.
Moving forward, future students should not be taking out loans or paying for college at previous rates until they are back on campus and the college experience returns to the status quo.
To start, higher education institutions need to discount tuition rates for the 2020 fall semester, which is actually in their best interests. If tuition is not lowered, students simply won’t go and we will see colleges either not survive or take the serious revenue losses that they are projecting.
Like most things when it comes to the cost of college and student loan debt, the ball is in the colleges’ court when it comes to fixing the pandemic-induced problems.
Michael Brown is director of communications at LendEDU, an online marketplace for student loans based in Hoboken, New Jersey.