Federal loan relief to help thousands of El Paso students

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Originally from El Paso, Ray Luna overcame allergies and asthma in his youth with the help of a kind and knowledgeable medical assistant. Luna saw him as a role model and tried to follow an academic path so that he too could join the medical profession to help others.

Family issues and changes of heart led him to enroll at the University of Texas at the School of Pharmacy in El Paso, where he graduated in May 2022. He passed his exams from consulting and Walgreen hired him, but his sense of accomplishment was thwarted by student loans. which he began to accumulate as an undergraduate student.

He supplemented the Pell Grants with additional government loans to pay for his higher education. To date, he owes $127,000. While the 31-year-old father-of-three has a plan to pay off his debts, he said he would welcome any relief from President Joe Biden’s student loan forgiveness program.

Biden’s plan, announced Aug. 24, allows people with annual incomes of less than $125,000 or married couples with less than $250,000 to have up to $10,000 of their federal student loans forgiven. The amount could be up to $20,000 if the borrower also received a Pell Grant, federal funds given to undergraduate students with exceptional financial need.

“That would be wonderful,” Luna said of the loan cancellation. If all goes well, he hopes to pay off his university debts in 2025. “I want to get rid of these loans. This (program) would help me pay them back sooner.

The loan forgiveness program is expected to help more than 43 million people who have student loans. About 45% of those people could have their entire debt forgiven, according to a White House fact sheet.

Last April, 3.6 million Texans were borrowers who owed $120 billion in student loans, according to the Education Data Initiative.

Locally, the University of Texas at El Paso reported that 6,812, or about 34%, of its undergraduate students received federal student loans in the 2020-21 school year. El Paso Community College reported that 477, or about 2% of its students, received federal loans in the same year.

A student walks through the UTEP union complex on the first day of the fall semester. (Corrie Boudreaux/El Paso Matters)

The federal government previously suspended student debt repayment in March 2020 due to COVID-19, but that ends December 31.

The Biden administration expects its application for the student loan forgiveness plan to be ready before the end of the year. Those interested in learning more about the Loan Cancellation Plan should click here.

Republican critics of the plan say it will increase inflation and is unfair to people who have already paid off school loans or never taken out loans, while some Democrats say it does not go far enough to provide relief. The plan is expected to face legal challenges.

The University of Pennsylvania’s Penn Wharton budget model estimated that the student loan forgiveness program could top $1 trillion.

Dominique Baker, an associate professor of educational policy at Southern Methodist University in Dallas, said the student loan forgiveness plan has the potential to dramatically improve the financial situation of millions of people.

“While we don’t know exactly what will happen based on the current plan, causal research conducted on similar loan write-offs has increased revenue and decreased the likelihood of people defaulting on other loans or credit cards. credit,” said Baker, whose research specialties include student finance. assistance. “While there are competing analyses, most independent assessments find that the cancellation will not contribute significantly to inflation, especially since student loan payments will restart at the same time.”

While this is a “good first step,” more needs to be done to create an affordable college education, Baker said.

A UTEP spokesperson said the university had no comment on the program. Keri Moe, associate vice president of external relations, communications and development for the EPPC, said the college wished to reserve comment until officials have more details from the US Department of Education and a better understanding of how this may affect their students and their financial aid office.

“EPCC knows that student debt relief and cancellation has the potential to benefit many students,” Moe said. “As more information becomes available, we stand ready to assist eligible individuals as much as possible.”

A decorated cap at UTEP’s opening ceremony in May 2021. (Corrie Boudreaux/El Paso Matters)

Another recent graduate interested in the program is Michelle Diaz, a Far East resident of El Paso who received her bachelor’s degree in nursing in August at Texas Tech University Health Sciences Center El Paso.

Diaz, originally from Kansas, wanted to become a nurse to follow in her father’s footsteps. She enrolled at El Paso Community College for her basics and paid her tuition and fees directly. That changed after her father stopped working due to a stage IV cancer diagnosis. The family’s income has been cut in half.

The 23-year-old student obtained several scholarships and grants, including the Pell scholarship, but needed subsidized and unsubsidized government loans to continue her studies. She accumulated $23,000 in student debt.

“There was no way I could get by without student loans,” she said. “The maximum I could get is the maximum I got.”

Diaz, who lives with her parents, said the University Medical Center offered her a job as a cardiovascular intensive care unit nurse on the condition that she pass her national licensing exam, which she will take later this this month.

She was terrified of paying off her student loans, but devised a plan. She would use her six-month grace period to pay off her credit cards, then tackle her college debt in the spring of 2023. Her goal was to pay more to reduce the principal of the loan in order to pay it off sooner.

She said as thrilled as she was to be eligible for the $20,000 loan forgiveness, her mother was more ecstatic.

“I think my mom was more excited about loan relief than getting my degree,” said Diaz, who added that this program would free her from financial stress and give her a greater opportunity to help. his family. “It was a wave of relief. It was like the start of a new life. I felt really grateful at that moment. It was life changing.

She was philosophical about the public and political rejection of the loan forgiveness program. She said she understood the frustration, but preferred to focus on how it would positively affect her life and the lives of many others.

“With everything, there will be a negative to go along with the positive,” she said.

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