How the COVID economy is crushing Pa.’s student borrowers | Wednesday Morning Coffee

August 5, 2020 7:03 am

(*This post was updated at 9:23 a.m. on 8/5/20 to correct the name of the Association of Pennsylvania State College and University Faculties)

Good Wednesday Morning, Fellow Seekers.

Even before the pandemic knocked the legs out from under the economy, Pennsylvania’s student borrowers were struggling under the highest debt loads in the country.

In 2019, college graduates in the Keystone State owed an average of $36,193 (based on 2017 data), well above the national average of $28,288, according to the annual Peterson’s Financial Aid Survey, the York Daily Record reported.

A new Morning Consult poll released Tuesday paints a grimmer picture for student borrowers who are making their way through an economy with a 13 percent unemployment rate (as of June), with six in 10 of all Pennsylvania borrowers reporting that they’re just about able to cover their monthly expenses, but would have trouble with an unexpected emergency.

(Source: APSCUF, Morning Consult)

The survey, conducted on behalf of the *Association of Pennsylvania State College and University Faculties, also finds that 4 in 10 borrowers have seen a reduction in their household income since the pandemic began, and a majority of borrowers of color (51 percent) have been impacted by that decrease in income.

“We’ve seen folks making tough decisions on whether to pay their student loans or make other important payments,” APSCUF Government Relations Director Sean Crampsie said during a Zoom conference on Tuesday.

(Source: APSCUF, Morning Consult)

Some other highlights of the survey:

  • “Only a quarter of borrowers (26 percent) say that they save regularly to meet future needs, while almost three in four (71 percent) report they would have trouble with an unexpected emergency or are already falling behind in their finances.
  • “A third of borrowers (33 percent) report having been contacted by a debt collector in the past 12 months.
  • “Lower-income adults and people of color report being contacted by a debt collector at much higher rates than white or high-income adults.
  • “To deal with the increase burden, borrowers have withdrawn money from savings (35 percent), carried a balance on a credit card (30 percent), and delayed student loan payments (26 percent).
  • “The actions taken to manage expenses differed between white people and people of color. That was specifically the case when it came to delaying payments on rent or utilities and taking money out of a retirement account,” the poll found.

What’s more, a third of borrowers told pollsters they were unaware that the federal CARES Act provided broad relief for borrowers, including waiving loan payments and interest until Sept. 30.

“Pennsylvania is consistently ranked near the bottom of all student-debt categories, whether it be the amount of total outstanding student-loan debt or debt at time of graduation,” Jamie Martin, the faculty union’s president and a criminology professor at Indiana University, in Indiana, Pa., said in a statement. “Morning Consult’s survey results furthered our fears: Not only are borrowers still struggling, but they lack clear resources to inform them of major changes such as the CARES Act.”

The Pennsylvania Capitol building. (Capital-Star photo by Sarah Anne Hughes)

Our Stuff.
With just weeks to go before the start of the new school year, Pennsylvania Education Secretary Pedro Rivera announced his resignation Tuesday. In October, he’ll take over as president of the Thaddeus Stevens College of Technology in Lancaster. Cassie MillerElizabeth Hardison, and Patrick Abdalla have the story.

Stephen Caruso has what you need to know about a heated phone call between Reps. Tom Murt, R-Montgomery, and Brian Sims, D-Philadelphiaover a proposed LGBTQ bill of rights bill that Murt is now drafting.

A freshman Republican U.S. senator from Louisiana is pressing Senate GOP leaders to include billions of dollars in state and local aid in the next relief deal, Capital-Star Washington Reporter Allison Stevens writes. The story includes comment from U.S. Sens. Bob Casey, D-Pa., and Pat Toomey, R-Pa.

Pittsburgh’s police review board is turning to the community for help as it examines a video of a protester pushed by police, our new partners at Pittsburgh City Paper report.

Frustration is building inside the Philadelphia and state branches of the NAACP over Philly chapter President Rodney Muhammad, who’s facing calls for his resignation because he shared an anti-Semitic meme, our partners at the Philadelphia Tribune report.

On our Commentary Page this morning, Lt. Gov. John Fetterman, and Second Lady Gisele Barreto Fetterman, a Brazilian immigrant, call on Congress to pass legislation making DACA permanentJoe Biden is trying to have it both ways on fracking and that could cost him in Pa. But there is a way forward, opinion regular Mark O’Keefe writes. And St. Joseph’s University political science professor Joseph Powers explains why Biden just might be the Warren Harding we need right now.

WASHINGTON, DC – FEBRUARY 26: U.S. President Donald Trump speaks at the beginning of a new conference with members of the coronavirus task force, including Vice President Mike Pence in the Brady Press Briefing Room at the White House February 26, 2020 in Washington, DC. Trump updated the American people about what his administration’s ‘whole of government’ response to the global coronavirus outbreak. (Photo by Tasos Katopodis/Getty Images)

President Donald Trump’s
 scare tactics about Joe Biden destroying the suburbs isn’t working in the Philly ‘burbs, the Inquirer reports.
There’s been a spike in COVID-19 cases in Allegheny County nursing homes, the Post-Gazette reports.
Faculty at Kutztown University are pressing to move classes online this fall, PennLive reports.
The Morning Call looks at steps Lehigh County elections officials are taking to speed up the counting of election results ahead of the Nov. 3 election.
The York Daily Record looks at how Pennsylvania’s micro-brewers are weathering the pandemic.
The Citizens-Voice talks to NEPA residents who are still waiting to see their unemployment checks.

Here’s your #Pittsburgh Instagram of the Day:


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87 in the hallway. ? for the @nhl. #nhl #hockey #crosby #penguins #Pittsburgh #sonyalpha #50mm

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WHYY-FM runs down the damage done by Tropical Storm Isaias in the Philadelphia area.
Erie County reported a record high 42 COVID-19 cases on Tuesday, with nursing homes fueling the spike, GoErie reports.
U.S. Rep. Matt Cartwright, D-8th District, 
and GOP challenger Jim Bognet have agreed to one debate in their closely watched NEPA race, PoliticsPA reports.
With sports teams struggling in the pandemic, their hometowns are struggling too, reports.
Treasury Secretary Steve Mnuchin 
says there could be a deal on a new coronavirus aid package by the end of the week, Roll Call reports. 

What Goes On.
The House Education Committee meets at 10 a.m. in 140MC for the second day of hearings on school reopening plans.

What Goes On (Nakedly Political Edition).
State Sen. John Gordner, R-Columbia, holds an 11:30 a.m. luncheon at Federal Taphouse in Harrisburg. Admission runs $750 and $1,500.

Heavy Rotation.
Here’s some new music from Paul Weller to get the morning rolling. It’s ‘Village.’

Wednesday’s Gratuitous Hockey Link.
 scored three goals in the third period, beating the New York Rangers 4-1, in a three-game sweep of their Stanley Cup qualifying round. The ‘Canes are officially through to the playoffs.

And now you’re up to date.

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John L. Micek

A three-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's former Editor-in-Chief.