Tim Schweitzer attended community college briefly back in the day, dropping out to work full-time at Pathmark.
“From pushing carts, making $2 an hour, I became a store manager,” he said.
But the Howell resident wanted his three kids to experience what he couldn’t — he was determined to put them through college. Through savings and investments, Schweitzer and his wife Lori, who is a nurse, paid for their two sons to attend Rowan and Virginia Tech. There wasn’t enough left to cover their daughter Alison’s education, though, and that’s when student loans entered the picture.
Alison graduated from Towson, earned a master’s degree from East Stroudsburg and now works as a cardiology therapist at UVA University Hospital in Virginia, but reaching this point came at a steep cost. She and her parents took out a combined $90,000 worth of loans — $70,000 federal, $20,000 private.
As President Joe Biden’s plan to give borrowers $10,000 to $20,000 in student-loan forgiveness on government-held loans continues to face headwinds — the U.S. Supreme Court is scheduled to hear arguments on the initiative’s legality Feb. 28 — Schweitzer wonders if there’s a better way to address the issue.
“It might be a lot easier to change the interest rates than giving millions of student loan borrowers back $10,000 each,” he said.
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‘A bit flummoxed’
Schweitzer is eligible for the $10,000 forgiveness, but the 62-year-old retiree isn’t holding his breath.
“I’m not banking on getting it, personally,” he said. “If the federal government really wants to help students with their loans, do it with the interest rate. In the long run, you’re going to save more money.”
Some student-loan experts have backed the concept of permanently cutting the federal student-loan interest rate to 0%. Betsy Mayotte, president of the Institute of Student Loan Advisors, told Bloomberg.com in June she’s “a bit flummoxed” that more politicians haven’t rallied around interest-rate reform.
Two 0% interest bills have been introduced in Congress over the past two years, but neither has gone anywhere. Federal student-loan repayment has been paused since the onset of the pandemic, and the freeze currently runs through June.
“Once students have to start paying these loans back, it’s going to be chaos,” Schweitzer said.
The interest rate on the Schweitzers’ federal loan is 4%. Their private loan’s rate has ballooned from 4% to 8.5%, rising in reaction to the Federal Reserve interest-rate hikes designed to control inflation. The federal government can’t directly control private-loan rates. Whether the power to control the federal loan rates rests with the Congress or the president is what the Supreme Court will consider next month.
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Polarized debate
A president reducing student-loan interest rates instead of offering straight forgiveness might also spark legal challenges, but could it lower the temperature of the debate on the issue?
“Politically, I think that would probably be sufficiently technical that it would sound a little better,” said Stuart Shapiro, interim Dean at the Rutgers Edward J. Bloustein School of Planning and Public Policy, and a former policy analyst at the U.S. Office of Information and Regulatory Affairs. “Usually government programs that have concentrated benefits — that have a small number of people who realize the benefits and the costs are spread out over a large group — are very popular. You and I aren’t going to notice the difference in our taxes from student-loan forgiveness.
“But what has happened speaks more to the polarized political climate were in. The people that oppose the Biden administration like to portray it as a handout for the college-educated elite.”
Tim Schweitzer certainly doesn’t fit that profile. He spent decades working the floor at Pathmark so he could give his children more opportunities.
“I always tell my kids,” he said with a chuckle, “‘you made your father poor, but I’m proud.’”
Jerry Carino is community columnist for the Asbury Park Press, focusing on the Jersey Shore’s interesting people, inspiring stories and pressing issues. Contact him at jcarino@gannettnj.com.
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