Source: United States Senator for New Jersey Bob Menendez
JERSEY CITY, N.J. – U.S. Senator Bob Menendez (D-N.J.) penned an op-ed in New Jersey’s Gannett affiliated newspapers, making the case for developing and implementing a unified plan to tackle the broken student loan system, which includes improvements to the Public Service Loan Forgiveness (PSLF) program and lower payments under existing Income Based Repayment (IBR) programs. The Senator also argues that a comprehensive plan should provide information to borrowers about what the plan is to repay their loans, when these plans will begin, and how these different reforms ultimately work together.
Read the op-ed in its entirety below:
Cancelling student debt was the right thing to do. These are our next priorities
By Senator Bob Menendez
For many families, the end of summer means the start of another school year. Teachers have prepped for months to meet their students, parents have shopped for what their kids need on the first day of school, and many are traveling across the country to move into their first college dorm.
It’s an exciting time — a fresh start full of endless possibilities. This year though, it’s been made all the sweeter by President Joe Biden’s bold decision to forgive student loan debt for millions of hardworking Americans. For parents and students, it’s the greatest back to school gift they could get. For older Americans, it’s a reprieve for those who have never known life without the burden of student loan debt.
Make no mistake, this move will change lives for millions who have been saddled with debt for years. Moreover, it will unleash the economic potential of countless student borrowers who serve their communities as teachers, social workers, health care professionals, and more.
Take Catherine, from Plainsboro, New Jersey as an example. Student loan debt forced her to put off starting her own family and she swore off the idea of ever owning her own home. When she wrote to my office, she even questioned if becoming a public school teacher was the right decision.
Thanks to the president’s executive action cancelling student debt, Catherine and so many others like her will receive well-deserved financial relief. Not only will cancellation bring down her overall balance, soon-to-be proposed regulations could reduce her student loan payment by as much as half.
Simply put, wiping away student loan debt is an economic lifeline to public servants like Catherine. It’s a message that tells them, plain and simple: “your debt doesn’t define you.” It’s an important step towards restoring faith in the American Dream — that if you pursue an education, work hard, and invest in yourself, you too can thrive.
Because for too long, those burdened with student loan debt haven’t even had the chance to start saving. Instead, dreams of building families or starting a business have been delayed — including by parents who have financed their children’s education. With last month’s announcement, Biden is lifting them up and giving them a chance to succeed.
That said, it is just one step among many that we can take to reform our broken student loan system. Cancellation, improvements to the Public Service Loan Forgiveness program, and lower payments in Income Based Repayment programs will make an enormous difference — but what we need is a unified plan that tackles this issue in the comprehensive manner it deserves.
What, when and how: Here’s what’s still needed
Before we restart student loan payments, this comprehensive plan should inform borrowers of three things: what the plan is to repay their loans, when these plans will begin, and how these different reforms work together.
First, we will need additional details about the president’s newly-proposed 5% IBR program, including when this program will be available to borrowers.
Secondly, the PSLF program must ensure that those who go into public service — from nurses to public school educators to cops and firefighters — know with certainty that their debt will be written off after 10 years. We can start this work now by extending the PSLF waiver deadline to July 1, 2023, and guarantee that every public servant has the time they need to apply for the PSLF waiver.
And finally, any forgiveness of student loan debt must not be treated as income for the purposes of taxes beyond 2025 — a provision that I first authored and championed with Senator Elizabeth Warren in the Senate and Representative Bill Pascrell in the House of Representatives.
After all, the heart of this issue isn’t dollars and cents, it’s improving the lives of people like Catherine. It’s about helping hardworking families afford daycare, saving for the future, starting a family, and putting down a deposit to buy a home or starting a business. Each individual story is further evidence that fixing the problem of student loans in our country requires an approach that is all-of-the-above, not either-or.
As families gear up to go back to school with a burden lifted off their backs, we shouldn’t take our eyes off of the final prize — a student loan repayment system that works and realizes the promise of the American Dream for anyone who reaches for it.
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