Former UW student with $100,000 student loan debt says no to Fed loan forgiveness
By Leo Wolfson, Cowboy State Daily
Gillette resident Molly Wiesner may be facing more than $100,000 in student loan debt, but she doesn’t want proposed federal student loan forgiveness programs to be discussed nationally.
When her father was diagnosed with terminal cancer, Wiesner was forced to change majors and extend the time it took her to complete her undergraduate degree at UW.
She went on to earn a master’s degree in commerce, which she says helped her open two successful businesses that she runs with her husband.
But she knew what she was getting into, she said, when she asked for help to complete her education.
“I wouldn’t be the person I am, and I wouldn’t be where I am professionally without my two degrees,” Wiesner said. “I struggled like everyone else, I lived on next to nothing – but I signed those loan papers knowing it was a path to a better life, and it was.”
Extended Forgiveness Plans
The question of whether the thousands of dollars in student debt facing college graduates should be forgiven or whether borrowers should be responsible for repaying their loans is on the minds of many Americans and Wyoming residents, especially with extensive cancellation plans under consideration.
President Joe Biden has proposed canceling $10,000 to $50,000 in debt for those earning less than $125,000 to $150,000 a year, according to reportsapproximately 97% of all student loan holders.
The move would cost the federal government $245 billion, according to the Committee for a Responsible Federal Budget.
Rep. Alexandria Ocasio-Cortez (D-New York) has pushed the Biden administration to write off more student debt, saying the $10,000 minimum is less than a third of the average federal student loan burden of $37,000. .
But the $10,000 rebate could likely make a big difference to a graduate of the University of Wyoming, a school whose annual costs for in-state students can reach $18,000 a year.
More than half of UW students graduate debt-free, said university administrator David Fall.
Fall said he was not in favor of canceling the loans, even though his daughter was still paying off the loans for medical school. Fall’s son, to whom Fall loaned money for college, also repays his father.
Fall said the real answer to the problem lies in capping tuition fees for colleges and universities so students can learn the lessons of financial responsibility without the crippling debt that has accompanied higher education in recent years.
Federalization of loans
State Sen. Charles Scott (R-Casper), chairman of the Legislative Education Committee, drafted the bill that created the Hathaway Scholarship, a program that provides tuition assistance for the University of Wyoming and the state’s community colleges for Wyoming high school graduates.
Scott told the Cowboy State Daily on Wednesday that he blamed rising student debt on the federalization of student loans in 2010.
“When you’re a student, you don’t realize how difficult it will be to pay off that kind of debt,” he said. “You’re going to have this hanging over you.”
Prior to 2010, private banks approved most student loans on terms dictated by the federal government, thereby guaranteeing the banks their returns.
In 2010, Congress ordered the federal government to begin making direct loans to students, excluding private banks from the process, which Scott said allowed some institutions and their professors to profit.
Scott said the change resulted in an increase in the number of borrowers and the amount of money approved for loans.
“When it was semi-private, they held back,” Scott said. “They kept it from getting out of control.”
Opponents of student loan forgiveness say being forced to repay loans teaches students financial responsibility, while others have described the forgiveness as a bailout for well-off college graduates.
However, the Washington Post reported that some members of the Biden administration had offered to forgive debt only for undergraduate work.
Biden has already extended a moratorium on student loan repayments through August 31. The moratorium began in March 2020 under former President Donald Trump as a way to provide COVID relief.
The administration argued that suspending student loan interest and payments saved billions of dollars to 41 million student borrowers.
Pros and cons
Charles Pelkey, a Laramie attorney and former state representative, told the Cowboy State Daily last week that the respite from student loan repayments has had a positive impact on the economy.
“Look what happened with the deferral of student loan payments, families were able to buy homes or help with child care costs,” he said. “These are people who were previously paying between 10% and 20% of their monthly income on student loan debt.”
Senator Cynthia Lummis, however, said simply canceling student debt would not solve the root of the problem – covering the cost of higher education.
“General student loan debt bailouts don’t fix the system that created this problem,” she said in a Facebook post. “Instead, it encourages institutions to raise tuition fees. We will bail out borrowers again if we bail them out now.
Wiesner suggested adjusting interest rates on student loans, loan providers’ source of profit, noting that his interest rate is between 6% and 7%.
“Why am I paying more interest on my student loans than on my mortgage?” she asked. “If anything, forgive the interest or cap it at 1% and let us pay the principal.”