Nearly 45,000 Minnesotans qualify for some student loan forgiveness

Thousands of Minnesotans have received some form of student debt relief in the past four years, even as President Joe Biden’s plans for wider loan forgiveness remain stalled following a U.S. Supreme Court ruling last year.

The U.S. Department of Education had approved nearly 45,000 Minnesotans for some form of relief worth a combined $2 billion, as of this spring. Some of those payments were issued as the department updated longstanding programs that forgive loans for people who have disabilities or work in government or nonprofit jobs. Others were OK’d under new programs designed to better tailor people’s repayment plans toward their income levels.

“When I talk to people, I always like to encourage them to just look at their student loan situation and plan for the here and now,” said Kim Miller, senior program manager for LSS Financial Counseling. “We can’t predict what the future will bring.”

The issue continues to be a political talking point as the leading presidential candidates make competing pitches ahead of the November election, and courts sort through legal challenges brought by Republican-leaning organizations challenging the validity of some of the Biden administration’s student debt programs.

Biden, a Democrat, has promised to continue working on new proposals, saying crushing debt is delaying too many people’s dreams and harming too many local economies. Former President Donald Trump, a Republican, has derided student debt forgiveness and in one recent rally accused the Biden administration of “throwing money out the window.”

People who have been through the loan forgiveness process say it could be far smoother.

Daniel Lauer-Schumacher, who graduated in 2007 from St. John’s University in Collegeville, has spent his entire career working for government and nonprofit agencies, often in jobs that help people get housing. He applied three times for Public Service Loan Forgiveness, each time compiling a mountain of paperwork that showed he had been making payments for a decade on his $42,000 in student loans.

The first two times, he was rejected. On the third attempt, he learned that he’d be getting $3,000 back that he had overpaid — and that should have been approved earlier.

The program was created in 2007, but the Biden administration made changes that allowed some people to receive credit for loan payments that previously wouldn’t have counted. Lauer-Schumacher gets frustrated when people describe it as though it were a magical handout.

“I qualified for this thing,” he said. “I followed all the rules.”

Tonja Trickel doesn’t have any issue with programs that help people who work in public service. The physical therapist had about $5,000 of her roughly $80,000 in debt knocked off through a similar program.

But the Illinois resident, who grew up in Minnesota, gets frustrated with broader student debt forgiveness programs. She spent about 20 years working to pay off her own loans.

“Now, I feel like we’re being asked to pay over again” for other people, she said.

If she’d been able to keep that money, she might have a different house. She might have more money in a retirement account. She said some of her friends decided not to go to college because they wanted to avoid the debt and now question that decision.

Public opinion surveys suggest that Trickel’s not alone in questioning the student debt relief.

Just three out of 10 U.S. adults said they approved of Biden’s handling of student debt issues, while four out of 10 disapproved, according to a poll conducted earlier this year by the University of Chicago’s Harris School of Public Policy and the Associated Press-NORC Center for Public Affairs Research.

The poll also found a sharp partisan divide, with Democrats far more likely than Republicans to say the government should prioritize student debt issues.

Jim Turchi, who went to the University of Minnesota’s Duluth campus, has been working in manufacturing for 30 years and is struggling to find people for jobs that come with six-figure salaries. He sees some of the loan forgiveness proposals as politicians’ efforts to say, “Hey, we’ll pay for your education. Just keep us in power.”

Turchi said he believes a college education needs to come with a return on the investment, and he worries that the focus on loan forgiveness is distracting from another issue that needs to be solved.

“I think education’s important,” he said, “but I think we really need to address the question of why is college so expensive.”