Kutztown University graduate Stevie Jones hasn’t been able to find a job in his field for three years, and the COVID-19 pandemic is complicating his job search and exacerbating his daunting amount of student debt.
“I don’t have the years of experience or experience that [employers are] looking for,” said Jones, who has about $85,000 in student-loan debt tied to earning his two bachelor’s degrees. “That’s the barrier — how is anyone supposed to get experience if you’re not willing to give them the chance?”
In what was already a complicated and frustrating situation for many student-loan borrowers, the ongoing pandemic has created looming uncertainty for many recent graduates looking for employment.
A bipartisan group of state lawmakers in the Student Debt Caucus are writing a letter to petition the federal government to extend the six-month student debt suspension period past the Sept. 30 end date. Under federal coronavirus legislation, all federal student-loan payments and interest were put on a six-month suspension in late March.
Pennsylvania ranks among the highest in the nation for average student-loan debt per borrower, totaling $37,061 as of 2018, bringing the amount of student debt in the state to $68 billion, according to data collected by lendedu.com.
“Growing up in a low-income household, I knew that my family was not going to be able to afford for me to go [to college] paying out of their pocket,” Jones said.
He said taking out student loans was the only choice he had.
Jones graduated from Kutztown in 2017 with a bachelor’s degree in criminal justice. He went back to school a year later and graduated in December 2019 with a second bachelor’s degree in sociology to try and make himself more marketable — all the while working at Keystone Food Products, a factory in Lower Nazareth Township, to maintain a source of income.
He said after the six-month suspension period is over, he will pay around $650 a month in loan repayments.
Business closures and hiring freezes due to COVID-19 caused the national and Pennsylvania unemployment rates to increase dramatically in just a few months. In Pennsylvania, the unemployment rate increased from 4.7% in February to 16.1% in April, then decreased to 13.1% in May. Unemployment data for June will not be available until Friday.
State Rep. Jennifer O’Mara, a Delaware County Democrat, helped create the Student Debt Caucus last fall with hopes of bringing reform to the state’s higher education system.
The first-term representative proposed legislation in March with state Rep. Meghan Schroeder, R-Bucks, coined the Student Borrowers’ Bill of Rights. This legislation would create an Office of Ombudsman to advise students of their loan and repayment options to ensure they’re receiving complete and accurate information.
The bill also ensures state oversight of the student-loan lenders from the Banking Department. The Pennsylvania Higher Education Assistance Agency is one of the nation’s largest student-loan lenders, and New York state Attorney General Letitia James sued the agency in October, alleging it failed to properly administer the Public Service Loan Forgiveness program.
O’Mara said student borrowers often don’t realize when they have errors in their account, and that they have different options for repayment plans, such as an income-driven repayment plan or forbearance, a temporary suspension of payments.
The coronavirus crisis makes the resources outlined in the legislation even more important for students, but O’Mara said she is unsure the state House will take up the bill this year.
“I really want to use this moment to push our Office of the Ombudsman because I think now more than ever student-loan borrowers and their families need help from somebody who is looking out for them,” O’Mara said.
State Rep. Tarah Toohil, R-Luzerne, a member of the Student Debt Caucus and co-sponsor of the Student Borrowers’ Bill of Rights, said she is concerned borrowers may make decisions that could hurt their credit.
She said forbearance can sometimes affect a borrower’s credit score, and said she wants to instead create a moratorium, or an option for temporary loan suspension, with certain qualifications. This way, she said, borrowers can avoid having a forbearance appear on their financial records.
“If we can do qualifications for student borrowers for a moratorium on payments, then that would be something that would be really positive that we could do for student borrowers in Pennsylvania,” Toohil said.
Sixty-five percent of graduates in Pennsylvania have some kind of federal student-loan debt, according to data collected by the Institute for College Access and Success, and 33% of graduates have some kind of non-federal student-loan debt.
Michael Blichar Jr., another Kutztown graduate, received a master’s degree in higher education administration this spring and has been receiving partial unemployment.
After receiving a bachelor’s and master’s degree at Kutztown, Blichar has $102,000 of student-loan debt and is expecting monthly payments of around $600. Kutztown University costs about $10,800 a year for in-state students.
“I mean obviously Kutztown, I chose that because it was one of the most affordable schools, but still even so, taking out those loans, I really had no other choice,” Blichar said. “My family — there was no way they were going to be able to contribute to my education.”
Blichar, who is running as a Democrat for a state House seat in the 187th District, works part time at Northampton Community College. He said he is unsure what his job prospects will look like after the six-month loan suspension period ends.
“Unfortunately, higher ed, especially a lot of public universities across the state, are not hiring like they used to,” Blichar said. “Some have hiring freezes because enrollment is going down, and coronavirus only exasperated this issue, because now you have students who will not be able to return back to campus.”
State Rep. Wendy Ullman, D-Bucks, taught English at community colleges in Bucks and Montgomery counties for 30 years.
She said the state does not invest enough tax dollars into students or higher education, and “as we recover, that will be just one more huge piece of the financial burden that individuals are going to be paying, trying to stay in college, and stay financially solvent.”
Julia Shanahan is an intern with the Pennsylvania Legislative Correspondents’ Association.
