Student loan debt is one of the heaviest burdens weighing on folks in the United States. It became a hot topic again during the 2020 presidential campaign, and understandably so: it’s something that keeps millions of Americans in debt to the government or private financial groups. In addition, defaulting on student loans can amplify that burden by harmonizing credit scores for several years.
Earlier this month, US Reps. Deborah Ross (NC-02) and Alma Adams (NC-12) joined two of their House colleagues in a press conference for a package of bills that would change the landscape of national student loan debt by helping borrowers get back on track. The trio of bills—the Clean Slate through Repayment Act, Student Loan Rehabilitation and Credit Score Improvement Act and the Clean Slate Through Consolidation Act—are designed to boost the credit scores of those who defaulted on their loans but are now caught up with payments. On top of this, Joe Biden’s administration just delayed collection on student loans for the fifth time in two years and expunged the defaulted loans of about 8 million borrowers.
“Our Clean Slate bills will remove some of the greatest barriers students face in their pursuit of the American dream,” Ross said at the April 5 press conference. “We want to ensure these Americans can reach all of their goals – whether it’s buying a home, owning a car, starting a business, paying for their wedding, or saving for the future.”
What Ross and Adams are advocating for is not enough to deal with the huge burden of student debt facing North Carolinians, but it is absolutely necessary legislation. Currently, it takes about seven years for a defaulted federal student loan to be wiped from your credit report after you pay it. According to Ross, these bills would force the Department of Education to request consumer reporting agencies remove the default after repayment.
There are 46 million Americans trying to pay off $1.75 trillion in student loans. Breniecia Rueben, a tech worker in Raleigh, was one of those people. Her loans were relatively small — about $5,000 — but she defaulted on them without completing her degree. When she began evaluating her life in 2020, she realized her defaulted loans were weighing on her.
“I was trying to fix my credit score, because at the beginning of the pandemic, I was like, ‘I want to buy a house, I want to do all these things,’ but I was starting from ground zero,” Reuben told me.
After getting information from a friend who had also rehabilitated their credit score, Reuben was able to refinance her student loan payments to something more affordable. She wouldn’t have been aware of that program if it weren’t for the community help, and now she tries to help others looking for similar assistance.
Despite getting her loans out of default, which helps her credit score, it’ll take seven years before the default disappears from reports entirely. She sees the benefit of them dropping off sooner, but she also sees where it’d help everyone to forgive student loans en masse.
“If there were loan forgiveness, it would affect the people who don’t really have that much money now,” she says. “Because all our money is going to loan payments.”
What Ross and Adams are suggesting is good, but we shouldn’t settle for “good.” We must strive for the best outcome for everyone, and forgive more of the trillions of dollars in loan debt.
Sara Pequeño is a member of the Editorial Board.