With Politicians Floating the Possibility of Forgiving Student Debt, What Does It All Mean for New Teachers?
Americans hold about $1.7 trillion in student loan debt, with borrowers owing an average of $36,510 in federal student loans-roughly the same yearly salary as first-year teachers in many states.
The shutdowns from the COVID-19 pandemic have put an extra burden on those looking to pay back their student loan debts, and teachers are certainly no exception. According to NEA Today, more than half of teachers take out loans to pay for college, owing $58,000 on average. Shockingly, 14 percent owe more than $100,000. That makes the overall national average debt among college grads look small by comparison.
While the Biden Administration has agreed to pause payments and interest rates on federal student loans through September 30, some senators are urging for more. Senators Chuck Schumer (D-NY) and Elizabeth Warren (D-MA), along with Representative Ayanna Pressley (D-MA) are calling for President Biden to not only extend that deadline through next March-but to use executive action to forgive up to $50,000 of federal student loan debt per borrower.
The solution seems simple. Forgive the federal student loan debt, and relieve teachers of the stifling financial burden.
But how will such an executive order impact the future of student loans and the profession as a whole?
A Little Student Loan Relief Could Go a Long Way in Healing Old Wounds
The federal Public Service Loan Forgiveness (PSLF) program, implemented in 2007 had pretty attainable stipulations. While serving for 10 years in a position of public service (nursing, policing, or teaching), the borrower will make 120 monthly payments against their student loans. At the end of that 10-year period, their outstanding student debts would be forgiven-a practical a way to entice new teachers to enter and remain in the public school system.
But a bureaucratic incentive turned out to be an artificial promise.
Recent data suggests that 99 percent of applications for loan forgiveness have been denied, leaving teachers at odds with their choice to pursue master's degrees and continue their roles as civil servants in the first place.
In her statement to the Department of Education last June, NEA President Becky Pringle cited the failure of PSLF and called for the Department to take action: "cancel the debt of public service workers who have served their communities for 10 years or more."
Pringle also cited that a disproportionate number of black and minority teachers owe student loan debt, suggesting that in the interest of equity and diversity, forgiving loans could build trust with teachers of the black community-and incentivize those teachers to stay in the profession.
Could Getting a Break on Student Debt Help with Retention and Reduce Turnover?
Now more than ever, we need qualified, dedicated teachers. According to recent findings by the Rand Corporation, nearly 1 in 4 teachers expressed that they were likely to leave the profession post-pandemic, a number especially troubling, considering that our most important stakeholders-our students-will only continue to lose quality instruction if we have fewer teachers serving them.
But given the conditions of such staggering statistics, student loan forgiveness won't necessarily fix the problem. Rand also found that a far higher proportion of teachers report experiencing frequent job-related stress and symptoms of depression than is typical in the general population. While some proportion of loan forgiveness may ease the excess financial burden on public schoolteachers, monetary gains won't necessarily negate the stress of teaching in the age of COVID.
Recent data shows that in many districts, teachers earn disproportionately less than their counterparts with the same level of education and experience. Many teachers cannot afford to live in the districts in which they teach, and with teacher salaries leaving little left over for saving for health- and family-related emergencies, it's no secret that forgiving student loans would lessen the burden.
The Brookings Institute recently performed an analysis of the impacts of student loan forgiveness. When accounting for proportions of debts forgiven-that is, debts adjusted to how much the borrower owed, the results show that teachers would experience a better overall sense of security by getting just a little bit of relief. The study showed that people are for more likely to put aside money for an emergency fund after student debt has been paid down by at least 25 percent of what they originally owed. The study went on to show that people are also far more likely to go back to school after paying down more than half their student loans.
Even without total loan forgiveness, teachers will be better equipped to save money in case of a spouse's job loss, health-, or family-related emergency, which would add a sense of security to a profession that is often at the mercy of changing national policies and emergencies.
Could Student Loan Forgiveness Encourage More Teachers to Go Back to School?
Student loan debt is especially crippling for young educators who are on the lower end of the pay bracket. College costs are high these days, and students borrow more than previous generations to cover those costs. The prospect of piling up a bunch of debt isn't exactly a way to incentivize young teachers to stick around for the long haul and go for a master's.
In their analysis of the hypothetical impact of student loan forgiveness, The Brookings Institute also explored how more money in debt holder's pockets could impact their overall spending. The findings are clear: Getting a break on student debt leads to people being comfortable buying big ticket items like a car or appliance, as well as returning to school.
More learning means better teaching. Without the burden of paying for their bachelor's degrees, teachers may feel that they can invest their savings in affordable, advanced degrees-and acquire the knowledge and higher skillset needed to better reach their students.
A Precedent for Student Loan Relief Could Help Attract New Teachers to the Profession
As beneficial as it is for borrowers, student loan forgiveness also has a broader impact on the economy as a whole.
Dr. Thomas Sowell of The Hoover Institution at Stanford University sheds light on the quick-fix approach to debt: "Misconceptions about money-lending often take the form of laws attempting to help borrowers by giving them more leeway in repaying loans," he writes in Basic Economics. "But anything that makes it difficult to collect a debt when it is due makes it less likely that loans will be made in the first place, or will be made at the lower interest rates that would prevail in the absence of such debtor-protection policies by governments."
Federal loan programs must account for the risk of the debt not being repaid and the time delay in receiving repayment, and lower interest rates will only add to the challenge.
In other words, if outstanding debts are never paid back, and if interest rates are artificially lowered by executive order, the federal government may struggle to create another sustainable federal loan program in the future, and therefore may be less likely to continue to implement such programs.
Like any economic predictions, the impact of such executive action will be complex and longstanding. Loan forgiveness may incentivize teachers to pursue higher education. If more of us have master's degrees, will the profession be more respected? Is loan forgiveness fair and equitable to those who have already paid off their student loans? Or is equity better achieved over time when we forgive the outstanding debts of teachers new to the profession?
Programs like PSLF failed to give teachers and other civil servants the debt forgiveness they were promised. In the coming months, the current administration must regain our trust. Whether by prolonging the pause for repayments or outright forgiving large chunks of debt, how this administration chooses to ease the burden of student loans will determine how well we are able to attract and retain teachers in the aftermath of the pandemic.