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Biden administration cancels student loans for some, but others 'still stuck' with their debt

student loans
Posted at 6:43 PM, Apr 21, 2022

COVINGTON, Ky. — One day after the Biden administration canceled student loan debt for thousands of Americans, some borrowers without degrees are worrying.

At Bard's Burgers and Chili in Covington, Frankie Terrell's appetite flipped from food to debt during his lunch break. The electrician is not among those with debt erased Wednesday.

"Knowing that (my debt) is there is still being that hindrance," Terrell said. "In my circumstance it would boost my credit scores so I can be able to maneuver better."

Terrell took out loans to enroll at ITT Technical Institute before the for-profit college closed. When it shut down, he turned to Strayer University, another for-profit school, for a business administration degree.

"The next thing you know I was a class away from graduating and missed that class," he said. "I tried to enroll that next year then that school shut down. So, I'm stuck with that debt."

Though the U.S. Department of Education (DOE) relieved more than 115,000 former ITT students of loan payments, the offer only extended to those who "didn't enroll at another institution within three years."

"There's definitely a chance that some form of student loan forgiveness could still happen," said Phil Schuman, director of financial literacy at Indiana University.

Days after economists predicted, the DOE erased some debts and offered to shrink interest for 3.6 million others. Already, President Joe Biden extended a pause on payments and accrued interest on student loans until August.

"I'm not sure if that's the proper solution because some people would get the short end of the stick depending on what it is," said John Morgan, who lives in Covington.

Economists estimate the U.S. government is losing $5 billion a month deferring student loans, which hardly helps inflation.

Terrell, an Aiken High School alumnus, said he would struggle without the deferral.

According to a WCPO analysis of DOE data, 1.7 million Ohioans owe on average almost $2,000 more than people in Kentucky and Indiana.