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Brian Lehrer: It's the The Brian Lehrer Show on WNYC. Good morning everyone. We're going to pick up today right where we left off yesterday on what happens now for you or people you know after the Supreme Court struck down President Biden's Student Loan Forgiveness Program. What we did yesterday, if you didn't hear it, was just to take calls at the end of the show from anyone getting ready for the end of the pandemic student loan moratorium to testify about how the moratorium changed your life, what it allowed you to do, save for a home, pay your other bills more easily, stay more safe during the height of the pandemic, whatever.

One of the things that became clear was that many people aren't sure about the exact new requirements that begin in September or October, depending on how you measure it, which President Biden is trying to modify again, even with the Supreme Court ruling. We're going to do an explainer segment now on that, and hopefully, it will help people like our caller Jackie in Port Washington, who remain shocked many years after finishing college at what she didn't realize she had gotten herself into.

Jackie: I'm with a lot of people, I don't know what to do. I don't know how to get it out. I don't regret my education, but I regret that I did not understand the economics and the interest policies of predatory lenders when I took out those loans.

Brian Lehrer: For Jackie in Port Washington and everyone else with student loans yourself or people you care about getting ready to start paying again, we are very happy to have with us a journalist who both knows the details at the policy and political level and can offer some advice based on her reporting as well. It's Danielle Douglas-Gabriel, national higher education reporter for The Washington Post, covering the economics of higher education. Among other things, she published a five-point checklist for what student loan borrowers can do now to ease the transition. We'll go point by point down the list. Danielle, we appreciate your time. Thanks for coming on and welcome back to WNYC.

Danielle Douglas-Gabriel: Thank you for having me back.

Brian Lehrer: Listeners, the phones are open for your end-of-student loan moratorium repayment option questions plus on what President Biden is now trying to do, following the Supreme Court ruling. WNYC is our phone number as always, 212-433-9692. You can also text a question to that number, but our phones are open 212-433-9692 for your questions on the phone. Danielle, as calls are coming in, maybe you can reset the basics. Who has to start paying back what and exactly when?

Danielle Douglas-Gabriel: Sure. There are about more than 40 million people with federal student loans who will have to restart their payments. Interest on those loans will start accruing in September and payments will come due in October. People have varying payment due dates, so not all on one date, some perhaps at the beginning of the month, others middle or the end. While certainly the vast majority of federal student loan borrowers benefited from this pause, there were others who did have to make payments during this time, folks with older loans, but now everybody will be thrown back into the system.

At least what the Department of Education is hoping is that by offering borrowers what they're calling a 12-month on-ramp system they can ease people back into the system. What that means is that during the 12 months starting, I believe in October, if you miss any payments during that year, it won't count on your credit score. You won't be deemed as delinquent. It's giving folks some time to ease their way back into having that bill added to their budget.

Brian Lehrer: Interesting. Let me follow up on one distinction you made between payments being due in October and interest starting to accrue in September. We had a caller yesterday who said the news reports keep saying payments will be required again in October, but really it's better to pay down what you can by September or before September to avoid some new interest charges. Does that ring true to you?

Danielle Douglas-Gabriel: Certainly. If folks can afford to make payments ahead of that schedule, it would certainly help to lower their balance and save them money on interest. There are a lot of people I spoke with during this three-year pause who actually were making payments on their loans because there wasn't interest accruing. They were just being able to pay down the principal quickly, which really knocked into some of what they owed on their debt. At this stage, people really need to look at their family budgets and to see what is feasible for them, but paying attention to what you can actually afford to do before the pause ends and when it does end, would make a lot of sense for families right now.

Brian Lehrer: All right. You wrote up a five-point checklist for what people with student loans can do to ease the transition. Let's go down the list. Tip number one, check the details of your account. What do you have in mind?

Danielle Douglas-Gabriel: While there are a lot of people who are probably hyper-aware of what they owe, what their interest rates are, all of those details, I suspect there are a lot of Americans who aren't paying a whole lot of attention to the intricacies of their loans. It would be good as before the payments restart to, get all of that information, plus, there has been a lot of movement of accounts from one loan servicer to another.

The loan servicers are the middlemen who collect and apply payments on behalf of the Department of Education. During that three-year pause, several of the big ones left the system and their accounts that they had went to other companies. It's good to know who your loan servicer is. It's good to know all the details of your loans. You can find all that information by logging into the Federal Student Aid website to just verify all those details.

Brian Lehrer: Navient, for example, one big loan servicer no longer in the business. Also one called Pennsylvania Higher Education Assistance. Some people will have to set up logins and accounts with new loan servicers and even figure out who they are?

Danielle Douglas-Gabriel: Yes. A lot of the loan servicers to their credit were pretty quick in trying to notify people when the accounts came into their possession. I don't know if everyone was paying attention to those emails during this time, but certainly, the companies were trying to reach out. In some instances, the login information stays exactly the same, so there's no extra lift on that part, but information about whether you want automatic payments withdrawn from your account, all that kind of stuff, you need to confirm with your student loan servicer before payments start over again.

Brian Lehrer: In fact, your tip number two is, keep an eye out for notices. These are the reminders via mail or email or robocall that your repayment requirements are starting up again. What if they don't contact you?

Danielle Douglas-Gabriel: They will. They definitely will, [chuckles] because they definitely have to. Even if they don't contact you, you can be proactive and reach out to your servicer. Once you've gone on federal student aid and verified who the company is that's managing your loans, contact them. In fact, it's better to contact them before the restart of payments because they have more capacity to take those calls. Now if you wait until October or November, then you may be dealing with much longer wait times for those calls because you and everybody else will be trying to get information at the same time.

Brian Lehrer: What if they can't find you? What if you moved or your other contact information changed and they haven't contacted you? Is there a risk in not resuming payments?

Danielle Douglas-Gabriel: Certainly. I think this is why the Department of Education, the Biden administration is building in that 12-month period because of all of those factors that you just mentioned: if you moved, if your servicer can't find you, all of the things that would make it possible for you to fall behind on your payments if you're not getting that extra gentle nudge. I think this is also particularly true for folks who graduated during that three-year pause who have never made a payment on their loans and aren't familiar with the system, don't know much about their repayment plans, trying to reach out to them is critical. While it would be great if your servicer's doing all the heavy lifting of getting you, you can also be proactive to make sure that you are selecting the best repayment plan for your financial situation.

Brian Lehrer: That's your tip number three: figure out which repayment plan is best for you. People can change repayment plans as their financial situations change over the years?

Danielle Douglas-Gabriel: Certainly, yes. Very many borrowers when they're coming out of college and they're not making much money, there's a suite of repayment plans called income-driven repayment that tag your monthly payment based on your disposable income. The less you make, the less you pay back. As your income increases, the more you pay back. It would be a great idea for folks to go onto the Department of Education's website. There's actually a loan simulator tool that lets you figure out how much you would pay on each of the various repayment plans and actually whether or not you'd pay your debt off faster or not on each of those plans. It's a really useful tool.

Brian Lehrer: Yes, go ahead. Sorry.

Danielle Douglas-Gabriel: No, I was just saying it's a really useful tool and I encourage people to check it out.

Brian Lehrer: You suggest within that, that the loan servicers can help with options like consolidation? What's consolidation in the context of student loans?

Danielle Douglas-Gabriel: If you have multiple loans from various periods when you were-- throughout your education, taking on more debt, you can consolidate it into one loan with one repayment. Also, if you have what are known as FFEL loans. These are the older bank-based loans I mentioned. Many folks who had those loans, especially the ones that are held by commercial lenders, had to keep making payments during the pause. Now, if you want to get into some of these more generous repayment plans that offer student loan forgiveness or just more flexible terms on repayment, you can consolidate those older loans into what's known as a direct loan, which are the newer loans that would afford you all of the benefits of some of the newer repayment plans.

Brian Lehrer: We have a call coming in specifically on loan consolidation. Let me take that one first since we're right on that point. Patrick in Stanford, you're on WNYC with Danielle Douglas-Gabriel, who reports on higher education finances for The Washington Post. Hi, Patrick.

Patrick: Hi there, Brian. Great to be here. Long-time listener. Really appreciate everything you do.

Brian Lehrer: Thank you.

Patrick: Just on this point, I guess I wanted to mention that I've received a number of letters over the last couple of years. My loans have been on grace and then on pause. I've received letters about this point about consolidation and it's hard to judge the legitimacy of some of these offers and some of these invitations. I'm leery of going down that road, not really knowing how to judge the effectiveness and legitimacy of some of these options.

Brian Lehrer: Danielle, can you help them?

Danielle Douglas-Gabriel: Sure. There are things to consider when consolidating. When you consolidate your loan, whatever unpaid interest has accrued would be tacked onto the principal of your loan so that could raise your balance. Also, depending on the interest rate you may have in the loan, some of these older loans, depending on when they were taken out, may have some lower interest rates. Some others may have higher interest rates. It could also increase your interest rate when you consolidate.

The other thing to be very careful of, so I know that at least I've heard from borrowers who I've spoken about receiving letters about consolidation when it's not federal student loan consolidation, but private consolidation or refinancing options, which are perfectly legitimate, but please keep in mind that when you consolidate and refinance your federal loans into a private program, you will lose the benefits of all of these sorts of repayment programs and debt forgiveness aspects that the payment programs feature. There's something to keep in mind.

Brian Lehrer: Patrick, I hope that's helpful. Thank you very much. Catherine in Manhattan, you're on WNYC. Hi, Catherine.

Catherine: Hello.

Brian Lehrer: Hi, Catherine. Don't listen to the radio. Listen to your phone so you don't get confused-- [crosstalk]

Catherine: I know. I have it on both ears. I turned it off. Thank you so much. I have a couple of questions because I'm in a situation where I work at a nonprofit. I was part of the PSLF program, and I had a lot more time on it, unfortunately, to keep paying, but for some reason during loan forgiveness process, I got a letter saying-- I filed the papers that I needed to for loan forgiveness. I got notified back that I got totally forgiven, and in fact with the PSLF plan, which is the plan for people who don't know 10 years-- If you pay for 10 years, your loans get completely forgiven if you've worked for a nonprofit.

They said I was totally forgiven and they gave me a check for money that I overpaid and I was in shock. I checked with friends who know more about this than I do, and they said, "No, it's for real. They're not going to go back no matter what the Supreme Court says," but they did. I've been moved to a new servicer, but I know I have to contact the new servicer again, but I'm really confused because I was confused that I was totally forgiven in the first place, but now I have money that I owe them, I guess [chuckles]-- [crosstalk]

Brian Lehrer: Wow, that's quite a story. [crosstalk]

Catherine: [unintelligible 00:14:36] money back.

Brian Lehrer: You actually got a check in the mail?

Catherine: I don't know where to begin. [chuckles]

Brian Lehrer: You think you may actually owe money to be paid back. Have you ever heard of something like this before, Danielle? Do you know enough to answer this question?

Danielle Douglas-Gabriel: [chuckles] Yes. During the three-year pause, all of those months in which you weren't required to make payments actually counted towards Public Service Loan Forgiveness, the program that the caller was mentioning. It was entirely possible that people had no idea about that, and they satisfied the 10 years within this timeframe, and even though they were still making payments. The payments that you might have made during these three years would be refunded to you.

Catherine: I didn't make any payments. [chuckles].

Danielle Douglas-Gabriel: Oh, you didn't [inaudible 00:15:19] [crosstalk]

Catherine: I have very low rate, so I'm pretty shameless about it. I'm a single mom. I'm almost 60. I'm still paying these loans, which I never thought I'd have to pay to begin with. I thought stupidly that my parent was going to pay for it. I'm still paying mine. My daughter's approaching college age herself, so I will pay at the lowest slowest rate that I can. During the forgiveness, the COVID time, I didn't pay a thing. I was shocked that they-- I got a check. They automatically deposited over $1,000 into my account. I could swear from my calculations from what I did online that I had a lot more time left, that those three years wouldn't have covered the extra time, but I don't know.

Brian Lehrer: Catherine, can I ask you to-- [crosstalk]

Catherine: It was a weird windfall and I don't know where to begin.

Brian Lehrer: Let me ask you a follow-up question and then I'll give it back to Danielle. Are you sure that you actually have to repay money to anybody?

Catherine: I don't know. I did get a message from the federal government saying because of the Supreme Court, you need to get back in touch with loan provider. You may have to get new logins, et cetera, et cetera. I used to deal with Granite State, but not anymore. It's the company that was dealing mostly with PSLF anyway, so that's good.

Brian Lehrer: I see.

Catherine: I guess I just have to reach them, but it's--

Brian Lehrer: Danielle, what were you going to say?

Catherine: I don't know. I'm not to start in September because I don't want to start at all.

Danielle Douglas-Gabriel: I was going to suggest two things: one, contact the company that deals with Public Service Loan Forgiveness, which is a servicer by the name of MOHELA, and then also contact the federal student loan administration's student loan Ombudsman's office. These is the folks who can help you with all these things, and I'm sure what they're going to say is get everything in writing.

If MOHELA does have your account as being satisfied and fully paid off, just ask for them to send you a letter or email verifying as much. If you haven't been asked to repay that refund, just double check to make sure that you even would have to. You may be completely good. Please contact both of those companies. Both MOHELA, both the student loan Ombudsman's office, they should be able to straighten this out for you.

Brian Lehrer: Catherine, one more thing. Since you may have really gotten people's attention when you said you're almost 60 and you're still paying off your student loans, and you have a child approaching college age, how old were you when you finished your education?

Catherine: Oh, a normal age. I just was clueless. I was 20-something. Didn't know that I had a loan that my father had been paying, and then-- Because I work in academia and I was involved in the arts, I had a really low income living in New York. My salary from a famous college in the city was equal to what my rent was, and that was rent-stabilized. I'm ruthless. I pay for what I can and- [crosstalk]

Brian Lehrer: Discretionary.

Catherine: - the student loan was not it. I was in default many years. To pick myself back up, there's a plan, paying income-driven plan, which everyone probably knows about, where you pay in line with what your income is. I got back on board and was paying a little bit, but it's still a lot of money for someone who works as a secretary at Columbia environment.

Brian Lehrer: Absolutely.

Catherine: Not easy.

Brian Lehrer: Thank you.

Catherine: It's going to [inaudible 00:18:58] [crosstalk]

Brian Lehrer: Thank you. Good luck.

Catherine: Thank you.

Brian Lehrer: I hope you don't have to pay back that money. Thank you very much. Wow, Danielle, there's an article that you could write, or maybe you've already written it, Americans who are repaying two generations of student debt.

Danielle Douglas-Gabriel: I won't tip my hat on what I'm working on, but I might be working on that story.

[laughter]

Brian Lehrer: What you just said about being in default, that goes to tip number five on your list in The Washington Post, which is ask for advice, and it looks like that's mostly for people in default before the pandemic, right?

Danielle Douglas-Gabriel: Yes. During the pandemic, the Biden administration rolled out a program known as Fresh Start. This is to help people who were in default before the pause get back into good standing once payments resume. You have to opt into it, which means that you have to confirm that you want to be a part of it, so that's why  it would be really important for borrowers to reach out to their servicer and find out about the program and say that you want to participate. This helps to erase the mark from your credit report, helps to get you back into a good situation and into an affordable repayment plan.

Brian Lehrer: Abdul in Manhattan has a different situation. Abdul, you're on WNYC, with Danielle Douglas-Gabriel, higher education finance reporter for The Washington Post. Hi, Abdul.

Abdul: Hi. How are you? Very good.

Brian Lehrer: Very good indeed. Go ahead.

Abdul: I was saying that my student loan is in private hands, in private banks. I'm not qualified for the loan forgiveness, because they loan me in the Department of Education in order to be qualified for the loan forgiveness. I have no benefit on this forgiveness or debate or anything about that. I call the private company that has my student loan, and they say that you are not qualified because your loan must be in the Department of Education and that was very disappointment. It was of no use for me.

Brian Lehrer: Yes. Were you paying during the pandemic moratorium?

Abdul: No, I was going to department payments, because I could not pay my student loan.

Brian Lehrer: Abdul, thank you. Go ahead. I'm sorry. Go ahead.

Abdul: They give six months or a year for deferment. Sorry. If you cannot pay your loan, they give you a deferment, like six months or a year, until you are ready to make the payments. I was in that deferment payment once this loan debate started.

Brian Lehrer: Yes. So what to do now? Danielle, I think for a lot of listeners that brings up a whole other big categorization question, which is there are federal government department of education, student loans, and then there are private bank student loans like Abdul's, right? Very different?

Danielle Douglas-Gabriel: Yes, pretty different in terms of the flexibilities, particularly when you run into trouble in paying your loans. Certainly, private lenders will let you defer as the caller was able to do, but oftentimes, interest continues to accrue on the loans. During that period, you can do hardship deferment and such if you lose your job and all that, but the sorts of forgiveness options that the federal government affords is just not there in the private market.

Brian Lehrer: This goes to tip number four in your article, check your eligibility for loan forgiveness programs. What are the big ones?

Danielle Douglas-Gabriel: Well, certainly Public Service Loan Forgiveness is the big one. For all the folks who work in nonprofit or government jobs, after 10 years of payments, as one of the callers had mentioned, you can have the remaining balance forgiven. During this three-year period, the government actually offered a waiver of the regular rules for this program, which allowed a lot of people to get extra credit towards forgiveness. Many people I interviewed over the years were able to have their loans forgiven; teachers, social workers. That's a really important program to pay attention to.

There are recent regulations that went into effect around that program that makes it easier to get through it. It took effect on July 1st. There's also income-driven repayment plans in general which offer forgiveness after 20 to 25 years. A big note here, the Department of Education recently implemented, or finalize, actually, a new income-driven repayment plan that cuts that time down for people with undergraduate loans. After 10 years of payments, you can have your loans forgiven if your debt is below $12,000 or so. For folks who have grad loans as well as undergrad loans, they will try to take a weighted average of how much of your discretionary income could go towards your payments.

All that to say very much more generous program that is afforded right now, worth paying attention to. Of course, what's great, I have an article about the 10 other ways you can get loan forgiveness, including military service, including, of course, public service, as I mentioned. There are lots of ways. While of course, the President's far-reaching program would have afforded a vast amount of forgiveness for a lot of people, it's not the only way to be able to get some relief from your student debt.

Brian Lehrer: Abdul, I recommend you go online and search Danielle Douglas-Gabriel's article, "10 other ways you can get student loan forgiveness," and see if any of them apply to you, because honestly, I wouldn't take the private bank statement that you're not qualified for any loan forgiveness at face value. Would you, Danielle?

Danielle Douglas-Gabriel: Well, not any of the ones that are tied to the federal government. However, I think it's also important to note that a lot of employers lately have been offering debt reduction programs as an enticement. Check to see what your job offers. Not everybody is wildly publicizing, except for when they're trying to recruit, but a lot of employers actually do have these services where they will pay a percentage of your student loans. Not exactly student debt forgiveness, but a big help for folks who may need a little leg up in being able to pay off this debt.

Brian Lehrer: Folks, we're talking about what to do now if you have student loans now that the pandemic moratorium is about to end and the Supreme Court next President Biden's loan forgiveness program, your questions for Washington Post higher education economics reporter Danielle Douglas-Gabriel. 212-433-WNYC. We'll get into what Biden is trying to do next that might withstand a Supreme Court challenge. Stay with us.

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President Biden: Today's decision has closed one path. Now we're going to pursue another. I'm never going to stop fighting for you. We'll use every tool at our disposal to get you the student debt relief you need and reach your dreams. It's good for the economy. It's good for the country. It's going to be good for you. Thank you very, very much for listening. We're going to get this done God willing. Thank you.

Brian Lehrer: Brian Lehrer on WNYC. We're talking about what to do now if you have student loans now that the pandemic repayment moratorium is about to end, and the Supreme Court, next President Biden's loan forgiveness program, your questions for Washington Post higher ed economics reporter Danielle Douglas-Gabriel. 212-433-WNYC on the phones or via text. There was a clip of President Biden on the day of that Supreme Court ruling promising to try other ways. He has announced some plans since. Danielle, you report that the federal education department has initiated what's called a negotiated rulemaking process to compromise waive or release loans under certain circumstances. That's the way the education secretary Miguel Cardona put it. What does that mean in plain English?

Danielle Douglas-Gabriel: Well, the HEA, the Higher Education Act, pretty much governs many of the federal policies around higher education, including the Secretary's ability to modify loans that are owed to the department. This has been applied through programs such as Borrower Defense to Repayment for students who are defrauded by their colleges. This is what governs public service loan forgiveness, that same authority.

The Biden administration is trying to use that authority which undergirds many other types of forgiveness programs to put forth a regulation that would allow him to achieve exactly what he was trying to go for through the executive order. This is not bulletproof at all. I suspect there will be legal challenges on the scale of probably what we saw with the program that was struck down by the Supreme Court. While the President is saying he is not giving up the fight, it will not be an easy path forward.

Brian Lehrer: I saw in another news organization, Yahoo News, a reference to reducing discretionary income for income-based repayments. I'm not sure what that refers to. Are you familiar with that?

Danielle Douglas-Gabriel: Yes. That is the program I had mentioned a little earlier, that new income-driven repayment program that was finalized. That program takes effect next July, but the program was finalized this July. What it does is protect more of the income that goes into the calculation of how much you'll be paying a month. Whereas, I think it's 150% above the poverty line, that's going to change the 225% above the poverty line. That means a lot of people who are starting out or whose income just isn't really helping them make ends meet, may see their payments lowered.

I think the White House is projecting that most borrowers who participate in this new plan could see their payments cut in half or save $1,000 or so on their loans. Really important to pay attention to. One other thing I think is important to mention is that even though the program doesn't take full effect till next year, there are aspects of it that will be implemented now, including allowing people to make zero payments depending on their income using that new discretionary income threshold. That's really important. It's worth paying attention to this and looking at that program and talking to your servicers to see if that's the best fit for you.

Brian Lehrer: Mike in Brooklyn, you're on WNYC. Hi, Mike.

Mike 1: Hi, Brian. In an effort to zoom out a bit and not normalize the right-wing judiciary, like historically reactionary courts, and isolate borrowers, because it can feel very isolating and I appreciate your guests giving advice, I just want to plug the Debt Collective, which came out of Occupy Wall Street. Debtcollective.org also has a bunch of resources that people can go and check out. There's power in collectivity and sharing resources and ideas and being together and potentially not defaulting, but going on debt strike using a couple of means.

It seems politicizing this is important and not just going along and allowing the investors to be protected and instead saying there's $1.6 trillion of student loans out there. In addition to everything else that's going on in the world, that's something that we can't allow to just be on the backs of working people to find a way to scratch and claw and maybe get forgived here. Just making it everybody for themselves. This is a collective social problem and it needs social and political answers. Thank you.

Brian Lehrer: I appreciate the context. Mike, do you know of any collective debt strikes regarding student loan debts that are actually underway since the Supreme Court ruling, or even before? Can they be effective? Even though the concept is entirely admirable, can people, to your knowledge, do this without just winding up in trouble as isolated individuals financially?

Mike 1: I think it started I don't know how long ago, but they seem to be-- if you go on debtcollective.org, you could read the history. They were ahead of the Corinthians story. They've made these digital suite of apps that apparently the Department of Education has copied. They're ahead of the curve in a lot of things. They're smart, they know what they're doing, and the idea is not to get people defaulting and ruining their credit but to do things smartly and jointly because there's power in a union as the old saying goes. If you get someone on in the next couple months from the Debt Collective, I'm just some guy, I don't really know, super detailed, but that would-- [crosstalk] Thank you.

Brian Lehrer: You're just pointing us toward it. Mike, thank you very much. Danielle, familiar with that?

Danielle Douglas-Gabriel: Yes, I am. Actually, the Debt Collective did help to push policy that changed a lot of this one program called Borrower Defense to Repayment. The Corinthian school that the caller mentioned was a for-profit school that collapsed and left a lot of students carrying a lot of debt, oftentimes with degrees that were not valid in the market or viable in the marketplace. A number of students went on strike, said they weren't going to pay their loans until the Department of Education was willing to forgive them given what they went through as a result of their advocacy work. You saw a lot of policy changes around that program, and they continued the effort with broader debt relief. They were very vocal and an active player in getting Biden to sign on to his debt relief program.

Brian Lehrer: Maybe related to this, you quote an economist named Marshall Steinbaum who has a in your face suggestion for Biden in the Supreme Court's face that is. He says, "They don't need a rule-making," a whole new process like you've been describing from the Department of Higher Education, "Just cancel the debt, tell all the borrowers their balances are reduced, and let Chief Justice Roberts reimposed them." [laughs]. That's a quote from Marshall Steinbaum economist. Danielle, is that a serious suggestion if the Supreme Court already struck down the plan?

Danielle Douglas-Gabriel: I don't think the Biden administration would think it is. It is a bold way of trying to achieve that policy. Given what we just saw with the courts, the disappointment that borrowers face, I think the Biden administration was really trying to find a viable option that has a good chance of surviving a court challenge is debatable whether the use of Higher Education Act is that, but people like Marshall, as well as others had said that using that authority should give the Biden administration stronger footing on this issue. We'll see.

Brian Lehrer: On the politics, here's a caller who supports the Supreme Court decision, Mike in Brooklyn. Mike, you're on WNYC. Thanks for calling.

Mike 2: How is it going? Thank you for having me on.

Brian Lehrer: What do you want to say?

Mike 2: Can you hear me?

Brian Lehrer: We got you.

Mike 2: I support the decision of the Supreme Court. I feel that a lot of these people knew what they were getting into, and they chose to go to these schools that lead you to having this large amount of debt rather than choosing the fiscal smart decision of going to a local county college or something that that's what I did and maintaining a reasonable amount of debt while getting an education. I don't know why the taxpayer and the working class would take on all the debt that a large amount of people went away and everybody knows what happens at college. You go away, you party, you have this great four-year experience, and all of a sudden, you leave with $200,000 in debt in a English degree. Maybe we should--

Brian Lehrer: Well, you don't have to throw the English degree there into it. That's kind of piling on. Mike, I get your point. Let's find out from our guest how she thinks President Biden would respond to that. Obviously, you're a reporter, Danielle. I just want to make that really clear. You're not in the position of defending the student loan program. It's not your forgiveness program. It's not your program, but as a reporter, how do you think President Biden would reply to Mike?

Danielle Douglas-Gabriel: I think this is an issue of nuance in an actual, what the data shows us. There are people who have six-figure debt who went to expensive schools and all that, but they represent a pretty small portion of the people with student loans. I think it was important to note that if the president's program would've gone through, about 20 million people would've had their loans completely wiped away because they owed less than $20,000.

Another important point that the White House certainly highlighted in many of their arguments in support of this program was that the people who are having the hardest time paying back their loans are people who often owe less than $10,000, are people who did not graduate from college, or people who went to for-profit schools many times. They didn't get the value of their degree because they didn't get the credential that would make them earn more in the labor market. It's not always the perception of the partying hard and four-year college wasting your parents' money. While I don't doubt that some of that exists, the data doesn't quite bear that out.

Brian Lehrer: I know we've had callers when we've taken student loan calls in the past yesterday and on other shows who did go to public colleges and universities. One of the things that Mike brought up, we had CUNY students, SUNY students just in the New York context who still came out with many tens of thousands of dollars of debt largely because even though the tuition is relatively reasonable, they still had to pay to live.

Danielle Douglas-Gabriel: Yes, that's often the case. In fact, many students I've spoken with in recent years, they're not borrowing for tuition. Many of them are going to public institutions and they're in-state residence, where the tuition is largely covered, it's room and board, it's getting to and from class. It is all of those other living expenses that they have to take care of, and they don't have the resources to afford it.

Brian Lehrer: So they didn't all go to Dartmouth and major in comp lit, I guess not. Mike, thank you though. Mike, keep calling us. We're going to wrap it up with one more call because multiple people are calling with the same question. We're going to let Terry and Huntington represent. Hi, Terry. You're on WNYC.

Terry: Good morning. I'm calling from my daughter who did go to public education. She did public education undergrad as well as public education graduate. She did graduate from her master's program during the pandemic. She has worked in fill-in positions up till this point and has recently gotten a full-time tenure track position on Long Island, so we're thrilled. My question is really about graduate loans versus undergraduate loans. Are there benefits to not consolidating them? If in the 10-year PSLF forgiveness plan is for undergrad only, is it beneficial to pay off that graduate loan?

Brian Lehrer: That's the call we're getting from a number of people. Danielle, what should the chain of command be? What should the pecking order be If somebody has both undergraduate and grad school student loans to pay back?

Danielle Douglas-Gabriel: Certainly. To the caller's point, for Public Service Loan Forgiveness, it covers undergraduate and graduate student loans, so your daughter doesn't have to worry there. A lot of the people who've benefited from this do have advanced degrees because of licensing, credentialing requirements, teachers, social workers, and the like, so I wouldn't worry there. For folks who are not eligible for that program but have both undergraduate and graduate, I would say pay attention to the interest rate. Grad loans tend to have much higher interest rates than undergraduate loans.

Sometimes, it could go no higher than I think 9% is what Congress kept it at. Whereas, I think some undergraduate loans a couple of years ago was like maybe 3%, 4% interest, grad loans were at 6, 7%, to give you an idea. I would pay attention to paying off, if you can, if you can afford to, and make extra payments. Focus on paying off your grad loans faster, if possible. Again, the new income-driven repayment plan offers a more generous benefit for people who have undergrad and grad loans.

Certainly, for undergraduates, you would pay no more than 5% of your discretionary income. For grad students, it would be 10% of your discretionary income. If you have both undergrad and graduate loans, then you pay a weighted average between the 5% and the 10%. That's important to note especially since there a lot of people who are getting master's degrees. In fact, 40% of the loans that are being made by the Department of Education are for graduate programs, so good point too to pay attention to if you have both those debts.

Brian Lehrer: Well, based on the number of people waiting in line on our caller board, we could do this all day and not run out of caller questions. We are out of time for this segment, so we thank Danielle Douglas-Gabriel, national higher education reporter for The Washington Post covering the economics of higher education. This has been so helpful. You're great on the advice track, you're great on the policy and politics track. We are so appreciative, Danielle. Thanks for being on with us.

Danielle Douglas-Gabriel: Always happy to be here. Thank you.

 

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