N.Y. STUDENTS WORRY DEBT RELIEF A MIRAGE
Many struggling with payments saw lifeline in Biden plan to cancel loans, but now fear Supremes will crush hopes
For some of the 2.4 million New Yorkers hampered by federal student loan debt, the late-summer news seemed like a miracle: President Biden planned to forgive huge chunks of the money they owed.
On Aug. 24, Biden declared his administration would cancel as much as $10,000 in debt for Americans making up to $125,000 a year, and $20,000 for low-income borrowers who received Pell Grants, fulfilling a promise he had made as a candidate.
But now, after six Republican-led states sued over the plan and the Supreme Court signaled openness to striking it down, anxious New York debtors are wondering if the miracle was a mirage.
Shari Seraneau, 36, a City University of New York recruitment coordinator who works at Hostos Community College in the Bronx, said Biden’s program would knock her debt from $36,000 to a more manageable $16,000.
When she first learned of the plan, Seraneau was thrilled and stunned. “Am I really reading this?” she recalled thinking.
“It filled me with a sense of hope,” said Seraneau, who lives in Flatbush, Brooklyn, and supports her 71-year-old mother, Merlin Seraneau.
“I’m close to 40,” she said, “and I have not even entertained the idea of getting married or having children because I don’t know how I would afford it.”
Her flash of new dreams has since faded to anxiety.
Seraneau, who studied at Seton Hall University but transferred to lower-cost Long Island University before graduating in 2009, has tried to stop herself from focusing on the Supreme Court battle.
“I’ve kind of removed myself from it,” she said, describing jitters about the ruling, which is expected to be delivered at the start of the summer. “I don’t want to be abreast.”
On Tuesday, the court heard two challenges to Biden’s $400 billion plan to erase debt for some 43 million American borrowers.
The lead suit in the case, from the governments of Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina, argues the president lacked clear authorization from Congress to wipe out debt on such a sweeping scale.
The administration has said the relief program properly employed a 2003 law called the HEROES Act, which allows the Education Department to waive or tweak financial aid programs in times of national
emergency.
COVID posed such an emergency, according to the administration. The White House planned to culminate a long-running pandemic-era loan payment reprieve by permanently wiping away some of the crushing debt facing borrowers.
Judging from the concerns voiced by key Supreme Court justices at oral arguments last Tuesday, the Biden administration’s position is not likely to sway the court, which has a 6-to-3 conservative supermajority after former President Donald Trump installed three jurists.
“Some of the finest moments in the court’s history were pushing back against presidential assertions of emergency power,” Justice Brett Kavanaugh, one of the conservatives appointed by Trump, said during oral arguments.
Kavanaugh and Chief Justice John Roberts, another conservative, are typically seen as the two justices most likely to join with the three liberals on politically charged cases. Roberts sounded unconvinced by the administration’s case, too.
“We like to usually leave situations of that sort, when you’re talking about spending the government’s money, which is the taxpayers’ money, to the people in charge of the money, which is Congress,” Roberts said Tuesday.
If there is any hope for Biden’s blueprint, it may lie in a procedural question: Whether the six GOP-led states — and two borrowers who joined a secondary suit, suggesting they were unfairly blocked from full access to the plan — had legal standing to challenge the program in the first place.
Democrats appear pessimistic about the chances that the issue of standing will save the plan.
“I’m confident we’re on the right side of the law,” Biden told reporters on Wednesday. “But I’m not confident about the outcome of the decision.”
Biden moved cautiously before announcing the program, to the frustration of Democrats like Sen. Chuck Schumer of Brooklyn, who long argued for the president to forgive up to $50,000 in student loan debt per borrower.
Schumer described the Supreme Court’s oral arguments as “very concerning,” but added that Democrats would not give up if the decision goes against them.
“I’ve seen so many young people who have just been crushed by this debt,” Schumer, the Senate majority leader, told the Daily News. “And it’s not just financially — it’s emotionally, it’s psychologically.”
Such debt hits hard in New York, a state whose per capita student loan balance was about $6,200 in 2021, the 11th-highest rate in the nation, according to a state comptroller report. Louna Leon, 33, said she and her husband have both been hobbled by student loans as they raise three young children in central Brooklyn.
Leon, a daughter of immigrants from Haiti, said her parents viewed education as the cornerstone of the American Dream, but did not fully grasp the implications of student loan debt when she headed off to Empire Beauty School.
Leon described her decision to take out student loans as a damaging mistake that has cast a long shadow over her adulthood. “We can’t move,” she said. “We can’t do anything.”
She owes about $13,000 in loans, her husband around $14,000.
She said she was “full of joy” when she learned of Biden’s plan. “When I heard that the opportunity may be taken away,” she added, “it hurt.”
In Bedford-Stuyvesant, Brooklyn, Vivian Hopper said the president’s plan had promised a sense of security after years of payments toward her loan.
Hopper, a 62-year-old retired grandmother and former medical worker, owes a growing $7,200 loan from her studies at City College of Technology. Biden’s plan would extinguish her entire balance.
“It’s stressful having a student loan over your head,” she said. “It’s not a good life to live.”