Signs of reform for America’s student debt

Transcript

ERICA: Good morning! Welcome to Axios Today!

It’s Friday April 22nd. I’m Erica Pandey in for Niala Boodhoo.

Today: natural playscapes are the new jungle gyms. Plus, trouble for workers who turn their Zoom cameras off.

But first, today’s One Big Thing - signs of reform for America’s growing student debt problem

At least 40,000 people could soon see their student debt wiped away. That’s because of a change announced this week by the Department of Education.

The new rule would affect how income-driven repayment plans are implemented. That’s usually a plan that gives borrowers 20 to 25 years to fully repay their federal debt based on their income. But a 2021 NPR investigation found that out of 4.4 million borrowers who’d been paying off debt for at last 20 years, just 32 had seen their loans get forgiven. Now, the government is working to correct that by forgiving tens of thousands of borrowers’ loans immediately. And this move comes as the Biden administration faces louder calls to make bigger moves to cancel student debt entirely - which currently stands at 1.55 trillion dollars.

Danielle Douglas-Gabriel is a national higher education reporter for the Washington Post and she joins us now with the big picture. Hi Danielle. DANIELLE DOUGLAS-GABRIEL: Hey, thanks for having me.

ERICA: The Department of Education said this would address longstanding failures in the federal student loan system. What are they talking about?

DANIELLE: Sure. So these plans have existed since about 1994. And what they essentially do is peg your monthly payments to a percentage of your income based upon your earnings, family size. And the idea here was always to help people avoid defaulting on their loans. So around like maybe

2020 or so people were starting to wonder, “Well, this has been around for a while. How come we're not hearing about a whole lot of people getting their loans forgiven?” The loan servicers, which are the middlemen, essentially that the department uses in order to manage your loans, they weren't keeping an accurate count of how many payments actually qualified towards this forgiveness portion. And to be fair, they never received any instruction for the department of education over decades.

ERICA: So another piece of this is the federal loan free that's been in effect for over two years now. It's just been extended a few more months. Do we know the impact this has had on borrowers?

DANIELLE: Certainly, at this stage we have people, pretty much 95% of federal student loan borrowers have not had to make a payment on their loans for over two years. Now, in my own reporting, I've spoken to various borrowers, particularly women of color, Black women in particular, who do shoulder the largest burden of student loan debt in part because of a lack of resources, racial wealth, inequality, and disparities. Some of the women I spoke with were just able to really catch up on other bills. Some of them were fortunate enough to be able to save money for a down payment and purchase homes before housing prices skyrocketed.

And I think you will find that within the broader population of student loan borrowers, that has been the case. But there are also people who are just able to live as a result of meaning, pay rent, cover their bills, cover childcare, all of those sorts of expenses that when you're on a stretch budget, sometimes fall by the wayside or you start to struggle to, to cover.

ERICA: So taking this a step further, there's been a big push from the left for president Biden to cancel all student debt. What kind of effect would this policy have?

DANIELLE: A lot of people who've been looking at the Biden administration's moves thus far, consider these programs, these waivers, these sort of, small targeted debt forgiveness as a backdoor way of trying to clear out the debt that people have amassed over the last couple of decades. However, it's certainly not as broad as saying $10,000 of debt forgiveness to every single federal student loan borrower, through executive action, which is what folks would like to see him do. But what's striking about this lead is waiver s that it does not include defaulted borrowers. Those are people who you would think have been most harmed by the way this system works because they've been on the able to make payments on their loans.

And that is something that I think broad-based debt cancellation would get at that these sorts of programs have not. So the Biden administration hasn't exactly figured out how to rectify that other than helping to pull some of those people out of default, when the pandemic pause is over. But even then folks who understand the way that default has worked, uh, traditionally are really worried that most of those people are going to redefault within a year after they come out of default, because they still don't have the resources to necessarily manage their loans. And the student loan system is still exceedingly complex and very easy for folks to fall through the cracks.

ERICA: Danielle Douglas-Gabriel covers the economics of higher education for the Washington Post. Thanks Danielle.

DANIELLE: Thank you.

ERICA: In a moment, we’re back with a look at the future of kids playgrounds.

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ERICA: Welcome back to Axios Today! I’m Erica Pandey in for Niala Boodhoo.

The pandemic has increased just about everyone’s appreciation of nature. That may be part of what’s driving some cities to think differently about how they build playgrounds for kids. In the city of Urbandale, part of the Des Moines, Iowa metro area, one playground looks a lot more like parts of a forest than a traditional jungle gym.

Linh Ta of the Axios Des Moines team is here – Linh, what exactly is this kind of playground LIKE? Can you basically walk us around?

LINH TA: Yeah. So they call these particular playgrounds natural playscapes. And so they're supposed to kind of mimick you know, what, uh, when an actual forest or wooded area would be, and the types of activities kids would do out there. So these playgrounds have kind of loose play areas, there's sticks and stones, there's different logs. So if kids decided that they wanted to, to lift them or haul them somewhere and build a fort, they could do that. The idea it's kind of a, of a more structured, but unstructured play area where kids can just be really creative, but still within the safety of a playground

ERICA: And the whole thing I mean, it sounds really fun. Do you know if we're seeing any more of these in Iowa, in other cities, in other states?

LINH: Yeah, so the concept is really taking off right now. So it first originated over in Europe, but over in the US here, you know, people are really kind of moving away from the more traditional playground of the swing of slides because I mean, that's just one way that you can play, right. But the idea of the natural playscape is that you're really pushing and encouraging kids to kind of, test themselves, test their boundaries, see what they can do. So some studies have shown that actually encourages more hours of play, and it also encourages older kids to continue playing on playgrounds and to go outside and gets some fresh air.

ERICA: A lot of the trends I cover Linh are sort of, you know, innovation that has happened because the pandemic pushed us to step back and rethink the way we do things. Is the rise of these natural playscapes at all driven by the pandemic and the need for you know, parents to want their kids to get outside and be in nature?

LINH: Yeah. You know, I think the, the trends really go outside has definitely helped boost and show the need for these different types of playgrounds, right. Where each time they go, it's supposed to be something new, something different. With all of us kind of getting out more, going outside, enjoying the fresh air, you know, COVID-19 has probably prompted parks and recreation departments to get a little bit more creative and, and try to think of new ideas for kids to play on.

ERICA: Linh Ta a reporter for Axios Des Moines. Thanks Linh.

LINH: Thank you.

ERICA: Here’s one stat to end the show - 92% of executives think that people who turn their cameras off during meetings don’t have long-term futures at their companies. That’s according to a new survey from the software company Vyopta.

That stat is alarming because it confirms what many workers have been thinking for months, that this newfound post-pandemic flexibility is great and all, but will I be out of sight and out of mind if I choose to stay home or to turn my camera off in a meeting?

There are so many reasons why people turn their cameras off during zooms that have nothing to do with how engaged they are at work.

• They might have roommates or family members in the background
• They might be multitasking with child care
• Or they might just have plain old Zoom fatigue and be tired of staring at yourself on camera and critiquing your appearance in real time.

The other side of this is that executives can think what they want but workers are the ones with the power in this hot job market. Higher ups are gonna have to get with the times because requiring camera-on during every meeting could be a quick way to shed employees.

That’s all we’ve got for you today!

Axios Today is produced by Nuria Marquez Martinez and Lydia McMullen-Laird Our sound engineer is Alex Sugiura. Alexandra Botti is our Senior Producer. Sara Kehaulani Goo is Axios’ Editor In Chief. And special thanks as always to Axios co-founder Mike Allen.

I’m Erica Pandey in for Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here on Monday.