Musings: If students' repayment plans end, look out

No matter one’s beliefs about student loans, they have been a means to an end for millions of college students. But crippling student debt often follows students out of school and throughout their lifetimes.

Income-based repayment plans have been a source of relief allowing many people to lead meaningful lives, build families, buy or rent homes, have children and pursue meaningful careers, while managing and repaying some if not all of their debt.

Most macroeconomists say these programs benefit not only the borrowers but society as a whole. Rather than being held back by damaging debt, borrowers pay a reasonable portion of their income as debt service, using the rest to pay for housing, transportation, child care, food, clothing and daily life. They buy cars, furniture, appliances and more. They may struggle, but they can make it. Their purchases multiply through the economy, keeping it strong.

Now, income-based repayment plans are under threat. The end of these programs for millions of borrowers will ripple over our entire economy. This along with tariffs and cuts in government employment are a recipe for recession.

Student loan borrowers will find themselves unable to manage monthly payments that could quadruple soon, an increase that will make it impossible to also pay mortgages, make car payments, and meet child care obligations. Student loan debt cannot be discharged via credit relief or even bankruptcy. It remains with you as long as it exists.

Income-based repayment programs were a promise between our federal government and student loan borrowers. The United States until recently has been the land of promise. It now threatens to become the land of broken promises, which could further damage trust in government.

— Marcy Eager Wolfson, Baldwin

The writer is an adjunct professor of economics and finance at Nassau Community College.