As student loan payments loom, borrowers weigh in on deferrals, ‘debt strikes’ and Deuteronomy

Student borrowers are floating a series of ideas online to lighten their burdens when loan payments resume on Oct. 1: Pay a little, pay nothing, quote scripture.

In a recent viral TikTok with more than 50,000 likes, Dawn Cowle discusses a letter she sent to Nelnet, her student loan issuer, with a verse from the book of Deuteronomy: “At the end of every seven years, you must cancel debt.”

Cowle acknowledged she was joking – most of the time.

“It would be ridiculous for Nelnet to say, ‘Oh, okay, of course, no questions asked. Can’t repay your loans? You get it!’” she said.

But like many indebted borrowers, she’s vented her frustrations since June 30, when the Supreme Court invalidated President Joe Biden’s plan to forgive up to $20,000 in student debt per eligible borrower.

Throwing the Bible at Nelnet, Cowle said, “would show that we are not in a position to just lay there and be waltzed.” (Nelnet did not respond to a request for comment.)

Sentiments such as Cowle’s have revived a vocal online community of borrowers and activists, some of whom have long campaigned for a government debt cancellation or, failing that, a massive boycott of student loan repayments. But experts — and some borrowers who’ve tried it — warn that most people risk dire consequences if they don’t posit.

“The financial fallout of not paying your student loans is, to me, probably one of the worst financial decisions you can make as an individual,” says Robert Farrington, the founder of College Investor, which works to improve the financial literacy of young people . .

Nonpayment, especially for those on loans from the federal government, could lead authorities to seize borrowers’ tax refunds, or their Social Security or disability benefits, he said. It can also limit access to more student finance in the future and even hinder employment.

“It’s not new,” Farrington said of the idea of ​​intentional non-payment, “but I think now that payments are resuming it’s definitely getting a lot more attention.”

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According to the Education Data Initiative, more than 45 million Americans have more than $1.7 trillion in federal student loans, with the average borrower owing more than $37,000. Most student debt is federal, with only 8% of students borrowing from private issuers.

Shahem Mclaurin, a TikTok creator with more than half a million followers, asked viewers in a recent viral video if people are paying back their loans after the Supreme Court rejected Biden’s plan.

“And this is not a joke, play-game kind of situation,” Mclaurin said. “Don’t we pay — like collectively, as a whole — meaning if you put down a payment, you’re breaking, you’re crossing the line?”

Thousands of comments and “stings,” where TikTok users embed existing posts into their own, weighed in on Mclaurin’s idea. The first-generation graduate earned a master’s degree from NYU in 2020, owes $150,000 and has no plans to pay back anything anytime soon, citing the high cost of living.

“I worry every day,” Mclaurin said of the possible consequences. “Sometimes I don’t sleep at night. I have a lot of fear around it.

Following the Supreme Court ruling, the Biden administration unveiled a one-year grace period starting this fall, which insulates borrowers from the short-term consequences of non-payment, even if interest rates start rising again from Sept. 1. And under long-standing federal policies, borrowers with existing student debt can usually pause their payments when they return to school. In many cases, however, interest will continue to rise.

Cowle said her loans are on hold for now while she works on her MFA in screenwriting; payments begin six months after she graduates in a few years. While she said she didn’t get any other education as a procrastination strategy, some say they will.

Dominic McDonald, who graduated from Albion College in Michigan in May 2022, said the ruling hastened his decision to enroll in graduate school this year to avoid paying his loans. “I’m under some financial stress because I’ve never had to do it before,” he said.

There are ways to pay less through other avenues that don’t involve potential fines, Farrington said. He estimates that half of student loan borrowers qualify for some sort of forgiveness program, but many have not filed the paperwork to receive it.

“People are just leaving loan forgiveness money on the table that they should be eligible for,” he said.

The Debt Collective, an organization founded in 2012 along with the Occupy Wall Street movement, promotes a “Can’t Pay! Won’t pay! Student Debt Strike’ on its website and offers advice on ‘the different ways you can safely go into default’.

Those include means-tested repayment plans, which adjust monthly payments based on a borrower’s income, and public service forgiveness, which allows people who work in government and other citizen-oriented jobs to zero out their debts. Among other things, Farrington also encourages these methods and hopes that more people will pursue them.

After the Supreme Court ruling, “We’re like internally, ‘Oh wow, we need to prepare for this influx of people,'” said Braxton Brewington, the press secretary for the Debt Collective. He said the group has seen interest in the strike rise in recent weeks and expects it to rise further as October 1 approaches.

When asked if the collective is concerned that the coverage could be misinterpreted as a call to simply boycott repayments indefinitely, Brewington said the organization is encouraging people to avoid defaulting on their loans if they can help. . But he said the group wants to highlight the difficult financial situation many borrowers are facing.

“What does the whole conversation about ‘Should people just not pay?’ is that people don’t want to be subjected to the harsh consequences of the federal government,” he said, adding that the Debt Collective is urging borrowers to use their money for necessities like food, medicine or housing instead of their loans “In many ways, there’s no choice,” he said.

Some borrowers warn others online against non-payment, and a few say their wages have been garnished. Other efforts are emerging to provide cash-strapped debt holders with informal or crowdsourced support through community funds and mutual aid. One TikTok user has even created a lottery system to pay off random people’s student loans each week.

Josie Bridges, a single mother in Portland, Oregon, said she was eligible to have all her student loans forgiven under the White House plan. Now, between rent and other basic expenses, she said she couldn’t afford to resume payments this fall, even if she wanted to.

“Even if [the monthly payment] is a few hundred dollars, I need it,” she said.

Bridges is anxious to see the calendar ticking down to October. She’s even considering taking a few new classes — racking up more debt in the process — just to delay the upcoming payments.

“Now that they’re back, I’m stressed,” she said.

This article was originally published on NBCNews.com