‘Life will look different’: NC student loan borrowers grapple with Supreme Court ruling
Melissa Boughton’s student debt has followed her throughout her life. It looms over her like a dark cloud when she’s looking to buy a house, undergo fertility treatments to have a child or just pay her monthly bills.
But something else hangs over Boughton’s head.
“Shame,” she said. “I still have a lot of shame around financial things because I feel like the debt that I have is some sort of reflection on my inability to manage money correct, when in reality, it’s a cycle.”
Boughton is nervous for the future, despite getting a “good job” and paying rent on a house in Durham she would love to buy one day. Boughton is specifically afraid for one month in particular — October, when student loan payments are expected to resume.
The U.S. Supreme Court struck down President Joe Biden’s student loan forgiveness program Friday in a 6-3 vote. Now, thousands of North Carolinians may be expected to resume their student loan payments in the coming months.
Before being struck down, the student loan relief program was meant to cancel between $10,000 and $20,000 of student loan debt, depending on how much a person’s income was. It was announced last August.
However, the initiative never fully got off the ground, as several lawsuits challenged it.
On Friday, the court ruled on two cases that led to the takedown of Biden’s loan program — one brought forward by a few states and the other by two loan borrowers.
More than 1.3 million North Carolinians are federal student loan borrowers, according to a March 31 Federal Student Aid data report. The state’s student loan debt stands at more than $50 billion.
The state has seen large spikes in student debt in the past few decades, with debt tripling from 2008 to 2018.
Debt heightened with medical costs
When she first took out student loans, Boughton didn’t really understand how any of it worked, she said. She had graduated early from high school and was attending the University of North Texas for a photojournalism degree. She really wanted to go to George Mason University in Virginia, she said, but it was out of state and unaffordable.
Her first job at a small Texas newspaper paid $23,000, and she had nearly double that amount in student loan debt. It’s now around $50,000 because of her interest rate, she said.
She’s added between $7,000 to $10,000 in debt as she pursued several medical options to have a child.
She required surgery that removed one of her ovaries and reduced her fertility. A fertility doctor told her at 32 years old if she didn’t undergo fertility treatment, she may never become pregnant, she said. So she began trying to have a child earlier than she otherwise would have.
Now 35, Boughton has had two miscarriages and is still on her “fertility journey.”
“I didn’t have the luxury thinking about children and waiting until I was financially ready to have a child,” Boughton said.
Attempts to buy a house around three years ago turned out unsuccessful for Boughton, because she said she couldn’t afford several homes’ due diligence, which are upfront fees on purchasing a home. At one point, she had lost around $1,000 in due diligence after a house she was looking at turned out more expensive due to needed repairs, she said.
“I never really even had a chance to really breathe between all of these things happening,” she said.
The time is coming for Boughton to resume her payments, so she has to prepare. When October hits, she said, she’s going to have to “really seriously budget.”
“My life will look different when I start paying back my student loans,” she said.
$80,000 in student loan debt
Not even an adult when he took out his first student loan, Trey Anthony has accrued about $80,000 in student loan debt. Like Boughton, Anthony graduated early from high school. He was financially independent from his family, leaving him to approach the problem of paying for college alone, he said.
Anthony pursued an undergraduate degree and a teaching master’s degree, and the now-28-year-old started his Ph.D. program in the Spanish department at UNC-Chapel Hill. Luckily, he said, his program is funded so he won’t be adding to his $80,000 debt. He wants to become a Spanish professor at a college, which he said he knows won’t pay too much.
It’s something Anthony has come to accept — an immense debt he won’t pay off in this lifetime.
“I don’t have any illusions about really ever paying that $80,000 back, because it’s just so big,” Anthony said.
His debt situation, coupled with low wages, is what got him involved in UNC’s workers union, of which he is now the outgoing president.
The Supreme Court decision was “outrageous” but not surprising, Anthony said.
“It really just goes to show the rich in this country will do whatever they can to continue to oppress the working class,” Anthony said.
Sloan Duvall heard stories from college graduates that student loan debt isn’t just a burden on the borrower, but impacts their families too. The 20-year-old UNC junior said student loans can make parents and grandparents risk their financial safety or retirement funds just to put their children in college.
The ruling is a “tough pill to swallow,” Duvall said.
“Day after day, we’re hit with these monumental decisions that impact the lives of young people,” she said. “I think UNC students are really going to be reeling after this decision, which comes on the heels of the affirmative action decision.”
The Supreme Court overturned UNC’s race-conscious admissions policy Thursday, the day before the loan forgiveness was also struck down. The move limits affirmative action around the country, which has largely been used as a policy to increase underrepresented groups’ enrollment in colleges.
Duvall, who is also the UNC Young Democrats secretary, called Biden’s student loan forgiveness plan a “major step forward,” but the Supreme Court’s decisions in the past year have been “completely out of touch” with what Americans want.
Duvall has a few thousand dollars in student loan debt from her first two years in school, but she said she’s fortunate compared to her peers who carry a much larger financial burden.
“I’m really feeling for all the UNC students and students across the country that are being hit with this decision,” she said.
Around 62% of students at UNC received some form of need-based financial aid in the 2021-2022 school year.
Breaking down the Supreme Court’s ruling against Biden student loans program
The court ruled that the Biden administration did not have the authority to implement the forgiveness plan without Congress giving clear authorization.
“The question here,” Chief Justice John Roberts wrote in the court’s opinion, “is not whether something should be done; it is who has the authority to do it.”
Now, the repayment period begins soon.
“It will be chaotic and confusing,” said Kate Sablosky Elengold, a UNC law professor who joined a group advising the court in a legal brief that the Biden administration should be allowed to modify student loan debt.
What complicates things even further is a new cohort of 2023 graduates entering their careers repaying loans they thought would be wiped away, said Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending. Some had taken jobs that may not support paying large student loan bills, he said, which will put stress on their budget.
Some students may even question if their degree was worth it, Herbin added.
“There’s going to be a lot of personal evaluation that North Carolinians are going to be doing during this timeframe,” he said.
The ruling will also disproportionately affect people of color and women, Herbin said. Women have more student loan debt than men, with Black women being the most likely to have student loan debt, according to the Federal Reserve Bank of St. Louis.
Biden said Friday he will be pursing a new avenue to relieve student loan debt through a law called the Higher Education Act. Through the law, Biden could waive student loans without declaring a national emergency.
This story was originally published June 30, 2023 at 7:02 PM.
