Critical Thinking

Sallie Mae and Me, in the Trump era

Back in 2015 and 2016, I made significant efforts to figure out what my Sallie Mae/Navient student-loan debt is doing to me financially, moreover how to alleviate or lessen those effects, and I wrote about those efforts in a series of posts titled “Sallie Mae and Me”. In those efforts to reduce either my interest rate or my balance, I was rebuked by the “customer service” people at the multi-billion dollar corporation that consumes much of my payments with interest. Since then, not much has changed in my situation . . . or in my attitude.

I do have a dog in this fight, but I want to see it fixed for more people than just me. I’ve paid thousands of dollars to Sallie Mae/Navient over the last eight or nine years, and my balance is just now getting below the amount I borrowed. When I think about how that same sum of money could have been spent in my local economy, having a positive effect on a community that I care about, it only makes my disdain grow larger.

What has also made my disdain grow larger is this little nugget from NPR earlier this month: “Teachers, Lawyers and Others Worry About Student Loan Forgiveness.” The short article explains that some young professionals who have taken part in loan-forgiveness service programs are now being told that their service may not count, that the organization for which they worked may not be an eligible program, and that years of low-paying non-profit work may be for naught. As you can imagine, those people are pissed. I would be, too. (I looked into some of the these programs, but wasn’t eligible for any of them.)

There was supposed to be some light at the end of the tunnel on this issue. Back in October 2016, then-candidate Donald Trump unveiled his plan for handling the student-loan debt crisis. His pronouncements conveyed two basic ideas: the first would cap repayment at 12.5% of a borrower’s income, and the other would reward fifteen years of good payments with total forgiveness. I’ve easily paid 12.5% of my income to Sallie Mae/Navient already, and I’m more than halfway to fifteen years of repayment. Either way is fine with me.

Yet, in the six months since then-candidate Trump shared those proposals, his actions as president don’t indicate the likelihood of relief for people like me. In a mid-April, the Wall Street Journal‘s Josh Mitchell reported, in “Trump Administration Scraps Obama Plan for Student-Loan Servicing,” that the president ordered his Secretary of Education Betsy Devos to cut costs in her agency, and she has dumped a set of pro-consumer regulations that she said cost too much. As a result,

Shares of Navient, Inc., one of the government’s main servicers, rose more than 2% after Ms. Devos’s announcement.

Mitchell also wrote that about “eight million Americans are at least a year behind on $137 billion in federal student debt.” That sounds like a lot of people who could use some help from a president who campaigned that he would put “America first.”

Put simply, the nation’s staggeringly high student-loan debt totals hurt everyone in the country, even people with no loans. Earlier this month, the NPR story, “A New Look at The Lasting Consequences of Student Loan Debt,” shared another sobering conclusion about how having this many people with this much debt hurts the overall economy. In this case, having tens of thousands of dollars in student-loan debt can cause a young person not to be able to buy a house, because the resulting lower credit score can necessitate larger down payments and greater interest rates— money they don’t have. And when fewer people buy houses, that hurts mortgage brokers, realtors, builders, contractors, landscapers, home stores— whole sectors of the American economy that have nothing, per se, to do with higher education.

However, I don’t see this businessman-president making middle-class Americans a priority over wealthy investors. For now, I’ll just keep putting the money I’d otherwise spend around town into Sallie Mae/Navient’s coffers, and their stockholders can enjoy another bottle of bubbly on me.

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