Education Secretary Miguel Cardona was crystal clear: the years-long freeze on student loan payments is coming to an end. 

“The emergency period is over, and we’re preparing our borrowers to restart,” Cardona testified last week during a Senate Appropriations hearing. The “emergency period” Cardona referred to is the much-announced end of the COVID pandemic public health emergency that recently expired. While many initiatives were part of that emergency designation, a freeze on student loan payments was not as widely reported. 

Under that designation, student loan payments (and any interest that would have accrued) have been paused – an action renewed first under the Trump administration and now with the current Biden White House some nine times, meaning borrowers have not had to make payments now for a little over three years. 

Cardona told legislators that the Education Department expects to start student loan payments as early as the end of next month, even while some were expecting a possible 10th freeze extension that doesn’t look to be happening. Cardona added that nonetheless, payments would restart no later than 30 days after a U.S. Supreme Court decision on the Biden administration’s proposal to forgive up to $20,00 in student loan debt per qualified borrower. 

The high court heard arguments back in February in two cases that challenge the president’s authority to forgive the loans, with plaintiffs arguing that it is the purview of Congress, not the executive branch, to oversee federal financial matters and that wiping out any kind of monies under a public health emergency – as President Biden proposes with the student loan forgiveness — is not part of any kind of presidential power. 

A SCOTUS decision is expected very soon as the court wraps up its session heading into the summer, and given the court’s conservative super majority and based on their comments during oral arguments, it would be downright shocking for the court to rule in favor of the administration’s proposal. Activists have argued that the president should propose the same initiative under the Higher Education Act which would give the administration a bit more legal leeway, but that hasn’t gone beyond talk at this point.

Cardona testified that he expects a “smooth reentry” to repayment, without offering any real details on what the means exactly.  

So what does that all mean for Latino student borrowers? Needless to say, A LOT.

Almost 70% of Latino student borrowers have current debt, says a report by the Education Data Initiative. The same report says that Latino borrowers were “the most likely” of any race or ethnic group to delay marriage and children because of student loan debt, and are the second-most likely (after Black Americans) to borrow high amounts from private lenders – close to 70% of Latino students who borrow from private lenders take out loans of $40,000 or more.

Unlike some other types of debt, student loans stay “on the books” forever until completely paid off. Even the Internal Revenue Service has what is called a “Collection Statute Expiration Date” which stipulates that collecting a tax liability generally expires after ten years. That means that the IRS has up to 10 years to collect on unpaid taxes. After that time has expired, the obligation is “wiped clean” and removed from a taxpayer’s account. Not the case with student loans, nor can student loans be eliminated by declaring bankruptcy. 

It remains forever and that is not good, say advocates for changes to student loan programs. 

“And they’re attaching all kinds of fees and the next thing you know you’re owing way more than what your original loan was and you can’t declare bankruptcy as you can with other debt. Unsuspecting students are thrown into commercial markets where they owe something that unlike all the other financial instruments out there; they can’t declare bankruptcy to get rid of it,” says Washington, D.C., consultant Roberto Quiñones.

“Once upon a time if you needed financial aid, there were various other ways to afford it, such as work study and other means. Loans were not a big part of it. People weren’t banking their entire degree through loans,” he said.

There was quite a bit of attention on the federal government going after for-profit universities for deceptive and even usury-type of practices with loans to their students, but nothing on the non-profit ones, which are the majority of higher education institutions in the United States, adds Quiñones.

“Podunk University can give you a Master’s degree in underwater basket weaving and say that you’re going to get a six-figure job but who holds them to that? The universities receive a lot of state or federal aid and need to be held accountable,” he added.

Likely because it is the country’s most populous state, California has the largest student loan debt in the country, with some $141.8 billion, according to the international research data and analytics group WordsRated. This means that California residents hold nearly 10 percent of ALL student loan debt in the United States. 

While some governors have said that they will tax as state income any and all monies forgiven if it gets to that, California Gov. Gavin Newsom last week signed into a law legislation that exempts residents from paying income tax on forgiven student loans, including students who had unpaid fees forgiven by their school, which is some relief for student borrowers in the state.

But an additional issue since the pandemic has been the decline in college enrollment – in part because of the cost. A report by the non-profit National Student Clearinghouse shows a drop for the third consecutive school year since the start of the coronavirus pandemic. Nearly two million fewer students are enrolled in traditional colleges and universities compared to 2019. 

Some student loan borrowers are just resigned at this point to carrying the student loan debt until literally the end of time.

“I fully expect to no longer be here on this Earth before all that is paid back,” says Washington, D.C., family law attorney Barrie Lynn Tapia, who has more than $100,000 in student loan debt. “It’s almost impossible with all the fees and interest that keep going up and you end up paying way more than you actually borrowed. It’s a racket and unfair.”

Patricia Guadalupe

Raised in Puerto Rico, Patricia Guadalupe is a bilingual multimedia journalist based in Washington, D.C., covering the capital for both English and Spanish-language media outlets. She is also an adjunct...