Michiganders react to Supreme Court rejecting student loan forgiveness plan

The U.S. Supreme Court's 6-3 decision on Friday to reject President Joe Biden's student loan forgiveness plan reverberated across the political and academic landscape in Michigan, leaving students dismayed at the prospect of payments beginning again and critics heartened at what they saw as an unfair giveaway of taxpayers' dollars.

Biden said the conservative majority's decision — written by Chief Justice John Roberts and arguing that Biden and his education secretary overstepped legal bounds by using emergency legislation to try to write off $430 billion in federal loans — isn't the last word on his efforts, however. Biden said Friday afternoon he was telling his team to see if a new loan forgiveness program could be authorized under the Higher Education Act of 1965, though he acknowledged that process will take longer than this one did to get up and running.

He also announced that when student loan payments, which have been suspended since March 2020, resume in October, his administration won't take any action that could result in declaring a loan in default or otherwise hurt a borrower's credit for at least 12 months. And he moved to put in place a plan that would reduce the amount any borrower has to pay a month to no more than 5% of their discretionary income (down from 10% currently).

"I believe that the court’s decision to strike down our student debt relief plan is wrong," Biden said in a statement earlier in the day. "I will stop at nothing to find other ways to deliver relief to hard-working middle-class families."

In Michigan, some 864,000 people had either applied for or were automatically eligible for the now-defunct loan forgiveness plan, which, as announced last year, would have permanently forgiven up to $20,000 in federal debt to lower-income Pell Grant recipients and up to $10,000 for non-Pell Grant debt holders. The program was limited to individuals making up to $125,000 a year or couples making up to $250,000 and only covered up to the amount they owed in student loans.

Payments on loans and interest were stopped in March 2020 due to the COVID-19 pandemic; now, they're set to begin again in October.

"It would have been awesome if at least some of those student loans could have been forgiven," said Reagan Smith, an 18-year-old student from the Upper Peninsula attending the Douglas J. Aveda Institute, a cosmetology school in East Lansing, who says she has about $19,000 in loans now. "It's definitely going to be a little bit of a struggle, but I know eventually it'll pay off. I sure hope (so)," she said.

But there were those who believe that taxpayers shouldn't have to pay the bill for student loans and that Biden's plan — which grew out of a campaign promise made in the 2020 election — was unfair.

More: Supreme Court strikes down student loan forgiveness: What it means in Michigan

"The loan forgiveness is a bad idea. Why? Because they voluntarily chose to take out the loans and stuff so they should pay them back," said 64-year-old Mark Sweitzer, who moved back to the Lansing area from New Mexico in 2020 after working 30 years as a paramedic. "I don't want to be paying for their college education. I paid for my own. ... The people who didn't go to college, they shouldn't have to pay for their (the students with loans that would have been forgiven) college either."

Sweitzer said he worked his way through Michigan State University in the 1980s by working various jobs and that government, by guaranteeing loans to students, has led to colleges increasing their prices. "What they really should have required them (the colleges) to do is put some skin in the game and underwrite their own loans."

'The hole keeps getting deeper'

Lisa Mitchell, a 51-year-old Southfield Public Schools teacher who lives in Detroit, said the Supreme Court's decision affects her and her family directly.

“It is expensive to go to school," said Mitchell, who attended Wayne State and Central Michigan universities. "I actually have a master's degree that I paid for out of pocket, but I'm still paying undergrad loans back. It would’ve really helped if they did forgive mine because I also have parent loans in excess of $100,000 for helping my older two children go to college and complete school.”

She said she still owes about $12,000 in federal student loans.

“I find myself wanting to still support my children financially, if I can, but the hole keeps getting deeper,” Mitchell said. “The debt is high, and our pay does not increase. While the debt is going up exponentially, my pay has not in a very long time, so it is hard.”

Meanwhile, the only way she and her daughter, Briana Mitchell, could afford graduate school was the COVID-19 student loan forbearance program, which is set to end this October. A 30-year-old communications associate at the Community Foundation for Southeast Michigan, Briana Mitchell attended Grand Valley State University and got her master's degree in digital audience strategy at Arizona State University.

She has accumulated some $70,000 in student debt.

“The cost of living right now are just so astronomical and I think that the relief of not having to pay for the last three years really allowed me to be able to invest in my life differently than before, especially being a Black woman,” Briana Mitchell said. “Black women, statistically, make less than their white and male counterparts. I think that relief to me would be a monetary benefit — to be able to make up for other areas where I might lack.”

'That would have helped a lot of people'

Mary Masucci — who took advantage of the Michigan Reconnect Program to further her education and attends classes at Grand Rapids Community College debt-free — doesn't have any outstanding loans herself but knows those who were counting on the forgiveness plan to help them out.

She called the Supreme Court decision deeply disappointing, a case where the government has taken away something people believed had been promised.

“I feel like that would have helped a lot of people out getting started on their career,” said Masucci, who is taking a break this coming semester to stave off taking on potential debt herself. While she attends the community college for free under the Reconnect Program, which covers tuition for Michiganders 25 and older, she pays out-of-pocket for books and other materials as she seeks a financial degree.

“I'm trying to avoid debt right now,” she said.

'You have to take out loans'

John Welton, 40, is attending Grand Rapids Community College in hopes of earning a degree in social work. He said the decision creates another obstacle for low-income students hoping to use higher education as a path toward a better quality of life.

“If you go to school and you're low income, you can't pay for your own school," he said. "You have to take out loans, you have to take out a grant, otherwise, you can't do it. You're going to have debt."

“Having that loan forgiveness program is incredibly helpful. It helps people like myself who are low income to stay out of that rut, it gets us out of that cycle.”

Welton expressed his disappointment in the decision.

“People who are low income get overlooked a lot," he said. "And it sounds to me, the decision may have been inspired by political preference.”

'It's ridiculous'

Marissa Ballard, 33, who graduated from Wayne State University in 2015 with her bachelor’s degree in fashion merchandising, said she currently owes about $100,000 in both federal and private student loans. As such, any kind of loan forgiveness would have been a big help, she said.

Prior to the student loan forbearance program, she said, “I was making some payments, I got garnished for a while.”

Ballard works at H&M.

“It's ridiculous because I don't know how anyone's going to be able to survive," she said. "The economy is only going to survive if people can spend money. So if they can't spend money, then I don't know what's going to happen. I probably won't be able to buy a house without a high interest rate and my car has a really high interest rate.”

'It's impossible to pay back'

The lead teacher at Bright Horizons day care, Simonee Williams, 43, of Detroit, accumulated her student loan debt while attending an institution that no longer exists: Everest Institute in Dearborn, which closed almost a decade ago. However, that doesn’t dismiss the amount she still owes: $12,911.

Graduating in 1998, Williams said she has been requesting forbearance on her student loan debt for years.

“It is impossible to pay back,” Williams said. The Supreme Court's decision was especially upsetting to her because she had been approved for her debt to be forgiven under Biden's plan. “I got an approval letter. I was excited," she said.

To younger people looking to attend university, Williams encouraged them to think twice.

“There is nothing wrong with pursuing other opportunities, like trade school,” she said. “And if you’re not committed, or (college) is something you really don’t want to do, don’t do it, because you have to pay for that. … My son was going to college at Adrian (College), and then later I found out that he did it just because I wanted him to. So make sure it’s something that you want to do.”

Contact Todd Spangler: tspangler@freepress.com. Follow him on Twitter@tsspangler.

This article originally appeared on Detroit Free Press: Michiganders react to Supreme Court rejecting student loan forgiveness