Former Students Plan to Ignore Loan Repayments When Pause Ends

“I will not give them one cent!” 45-year-old teacher Jacque Abron said about resuming her student loan repayments when the COVID-19 pandemic-era pause comes to an end. “The illegal lending scam is over and I’m fighting until we see bankruptcy rights restored.”

The mother of three is far from alone in her refusal to return to a life struggling to chip away at ballooning student loan debt when payments resume in October under the terms of a debt ceiling deal approved by Congress.

Several former students were told Newsweek they won’t make payments on a debt they say is spurious or cannot pay because of the rising cost of living.

More than 40 million Americans will have to make payments starting in October under the terms of a debt ceiling deal approved by Congress, and student loan interest will start accruing on September 1.

An activist holds cancel student debt sign
An activist holds a cancel student debt sign at a rally in front of the White House in Washington, DC, on August 25, 2022. Several former students told Newsweek they won’t make payments on student loan debt when payments resume in October under the terms of a debt ceiling deal approved by Congress.
Stefani Reynolds/AFP via Getty Images

Alan Collinge, of Student Loan Justice, said he believes a vast majority will not resume payments.

“Even before the pandemic, nearly 60 percent of all borrowers had either stopped paying, or were making $0 payments,” he told Newsweekciting data from the Department of Education.

Millions are also eagerly waiting to find out if the US Supreme Court will allow President Joe Biden’s student loan forgiveness plan to go ahead, though payments will resume regardless of what the court decides.

Here’s what those struggling with their student debt had to say about why they won’t or can’t pay.

Jacque Abron

A single mother to three children in Dallas, Texas, Abron said she could not recall exactly how much she initially borrowed to fund her studies, but the accrued interest means the balance she now owes has topped $100,000.

Her credit has been ruined because she refuses to make loan payments at the expense of providing for her children, she told Newsweek.

“I’ve never made a payment and I never will. It has ruined my credit and I don’t care,” she said. “I’m an underpaid teacher and I won’t spend any of my money on predatory, unconstitutional loans. I will not take away from my family.”

Jacque Abron
Jacque Abron says his credit has been ruined because he refuses to make student loan payments.
Jacque Abron

Abron is hoping she will be able to soon work for herself, which will help her make ends meet if the government seeks to garnish her wages.

“If all 45 million borrowers respected themselves were enough to fight, we would have this problem solved,” she added. “I won’t let the corrupt government cause stress or worry about their failed lending scam. Enough is enough! We should stand together!”

John Connors

Connors, 53, of Rhode Island, said his initial debt was $60,000. But despite making steady payments for almost a decade, his debt has ballooned to $100,000.

During the payment pause, he told Newsweek he has been able to put money toward his four children’s needs and make repairs to his family’s home.

But when the pause ends, he says he won’t continue making payments.

“In the absence of bankruptcy protections, I feel student loans are illegitimate loans,” he said. “It’s a debt that never goes away and I refuse to be an indentured servant to this loan. I’ve done nothing wrong other than going to college for a higher education. I’m a valuable contributor to society and deserve the same consumer protections that go with any other consumer loan.

“Although I’m concerned about the consequences of not making payments, I’m more concerned about making payments on an illegitimate loan than only goes up in the amount I owe even when payments are made.”

Christina Williams

Williams, a registered nurse from Athens, Georgia, borrowed $25,000 to pay for a master’s degree in gerontology at Brenau University so she would be able to work specifically with seniors in rural Georgia.

“Instead, what I got was over $113,000 and climbing in loans,” the 56-year-old told Newsweek.

Williams said she had deferred her loans multiple times because she could not afford to make repayments.

“The loans have been bought, sold, traded so many times, I honestly do not know who holds them now,” she said. “I was too trusting and gullible and now I am saddled with debt that will haunt me and keep me working until the day I die. I have no savings, no IRA, live paycheck to paycheck, and now with the inflation as it is, sometimes don’t make that. I have just a degree that wasn’t worth the price at any level.”

She is planning to apply for deferment again and if the request is denied, she will not pay.

“I can’t afford to,” she said.

Former students refused to pay back loans
Student loan borrowers gather near The White House to tell President Biden to cancel student debt on May 12, 2020 in Washington, DC. More than 40 million Americans will have to make payments starting in October after a COVID-19 pandemic-era freeze on loan repayments comes to an end.
Getty

Tanesha Borgman

Borgman, 43, left school with her bachelor’s degree and no student debt. But she needed to borrow $60,000 to go to graduate school to fulfill her dream of working as a speech pathologist.

She has made payments since graduating, she told Newsweek, bar a couple of years when she was in forbearance. The amount she now owes is more than double what she initially borrowed.

Borgman, who is married to a 6-year-old son, won’t be able to afford to make payments when the pause ends.

“I have medical debt I’m still trying to pay off and I currently pay mine and my son’s health insurance is out of pocket,” she said. “I also recently started a new job where I won’t earn full pay until after my initial four-month new employee evaluation period. I’m worried I’ll have to go into forbearance again and am currently just hoping God makes a miracle happen.

“I just want to be able to continue working to help people as a speech pathologist without having to pay for it for the rest of my life.”

What Happens if You Don’t Make Repayments?

The repercussions of not making payments can be severe.

Once the pause ends, those who can’t or don’t pay risk delinquency and eventually default. That can hurt your credit rating and exclude you from future aid and government benefits.

“Once the loan is in default, the government can collect the loan by seizing a portion of the borrower’s wages, seizing their tax refund [including their Earned Income Tax Credit and Child Tax Credit]or seizing a portion of the borrower’s Social Security benefits,” Kyra Taylor, a staff attorney at the National Consumer Law Center, told Newsweek. “There is no statute of limitations on federal student loans, so the government can collect defaulted loans indefinitely.”

Those struggling to pay are advised to check if they qualify for an income-driven repayment plan by visiting the Federal Student Aid website. Anyone who is temporarily employed should be able to qualify for a $0 payment plan.

For most student loan borrowers, it’s very difficult to have them dumped through bankruptcy.

“Successfully discharging a federal student loan in bankruptcy requires proving “undue hardship” which includes looking at past efforts to repay, as well as present and future potential ability to repay,” Peter Holland, a consumer rights lawyer who specializes in debt collection defense, told Newsweek.

Holland advises people to find a lawyer who “can take the time to really understand your situation and then discuss your options with you.”

Taylor added that there will be a great deal of confusion when loan payments resume as millions of accounts were transferred from one servicer to another during the payment pause.

“So many borrowers will be getting bills from servicers with names they don’t recognize,” she said. “Millions of folks may not make payments simply because they don’t realize that they are still on the hook for the debt.

“It’s incredibly important that the Department of Education provide folks with a “hold harmless” period that is long enough for them to do effective and robust communication to student loan borrowers to fight against this confusion when repayment restarts.”

In a statement to Newsweekan Education Department spokesperson said the department will “be in direct touch with borrowers and lean up our communications with servicers well before repayment resumes to ensure borrowers and their families are receiving accurate and timely information about the return to repayment.”

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