How Biden’s student loan relief plan will affect 7 people
Alice P., 31 years old
Raised by Korean immigrants in central California, Alice P. (who asked not to give her full name so she could speak freely) understood from a young age that she would go to college. Her parents moved to the United States in the 70s and 80s and wanted their children to live the American dream, she said, much of which included higher education.
There was no doubt that Alice would have to take out loans to be able to pay for her studies. But at 18, she had no idea just how far these loans would follow her into adulthood.
“I didn’t really add up all the numbers because I was a kid. And I would just say yes to everything because I wanted to go to college,” she said. “And here I am, almost 10 years after graduating from college, sort of reaping the consequences.”
Alice has saved and saved over the years, taking care not to fall behind on her payments and to keep her credit rating intact. He still has about $11,000 to pay, an amount that includes years of accrued interest.
Not having to shell out monthly payments for the past two years has made his financial situation easier, allowing him to save money to be able to leave his hometown. It also did wonders for his mental health. But she still carries the burden of her debt, as if “this dark cloud is sort of hanging over me,” she said.
Alice was cautiously optimistic about Biden’s pardon plan. As a Pell Fellowship recipient who earns less than $125,000 a year, she thinks what’s left of her loans will be completely forgiven, but, like many others who spoke to BuzzFeed News, she’s still trying to analyze what the plan means to her.
“I’m a bit skeptical about how this is all going to play out. It sounds too good to be true,” she said. “If everything turns out to be exactly what they say and there’s no fine print, then, yes, absolutely. I’m thrilled. … And I think it will definitely open up opportunities for people to do things they want to do and live more fulfilling lives.
Morgan J., 35 years old
Morgan J. went back to school 10 years ago, thinking she needed a college education to get a job that would pay her enough to take care of her family. Then in 2014, her husband had his second stroke and became unable to work, so she decided to go to graduate school to become a licensed therapist to earn more money.
A bachelor’s and master’s degree later, the 35-year-old mother of two is struggling with student loan debt of $130,000, an amount that is more than double her current income.
“I thought I’d make enough money to pay it all back, but clearly that’s not the case,” said Morgan, who asked that her last name be withheld to protect her privacy.
The $20,000 in student debt relief she expects to receive under Biden’s plan is “a small drop in the ocean,” she said. And when it’s time for her to start repaying her loans in January, she doesn’t know how she’s going to be able to pay them.
Not having to repay her loans during the moratorium meant feeding their two teenagers “more than ramen and peanut butter and jelly,” she said. Her family was able to buy what they needed and take a few short vacations that they normally couldn’t take. Her children were also able to play sports, but over the summer they had to drop some due to rising gas prices and other costs due to inflation.
Now, Morgan said, her 13-year-old son is “constantly worried about the cost of things.” He tells her that he doesn’t need new clothes, even though he doesn’t wear his shirts anymore.
Morgan hopes that under Biden’s rules, her monthly payment will drop from the $805 estimate she got during the freeze. Still, she plans to take a night shift in a psychiatric hospital. But that would mean she would have less time with her children in their later childhood years, less time with her husband, and less time for herself.
“I love what I do and I needed an education to support my family,” Morgan said with a heavy sigh. “But if I had known then that everything would be the price it costs now, I might not have done it.”
It’s frustrating, she said, to hear people like Republican Senator Mitch McConnell call Biden’s plan a “slap in the face” for people who have worked hard to pay off their debt or avoid it altogether.
“Yes, I went to school. I took that money for that, but I did it to have a better life, and at the time that was the only way to have a better life,” Morgan said, asking how much she should work for. afford to leave their children behind. play sports and raise them in a beautiful area. “Why can I work two, three jobs? Why is it okay for someone to have to work two or three jobs? »
Santana, 35 years old
Santana, who asked to be identified by her first name to protect her privacy, grew up understanding that college would be her key to success. She was accepted into a prestigious school, but even with scholarships and Pell grants, she finished her undergrad with about $50,000 to $60,000 in federal loans. Santana said she was “obsessed with repayment,” taking every opportunity she had to reduce that debt.
A master’s degree left him with another $60,000 in federal loans with an interest rate of 7% to 11%. She refinanced those loans in 2019. The COVID-era payment pause did not apply to those refinanced loans, on which she pays about $900 per month. But it stopped his payments on the $5,000 he had left in undergraduate loans, allowing him to invest some money in an index fund for the first time.
Santana, a first-generation black and Latino immigrant, grew up in poverty. She said she was instilled in her from an early age that higher education was the way to go. She was the first in her family to graduate from college.
“When you’re young and they say, ‘Go to college’ and ‘This is how you’re going to do it’ and ‘Pay off that debt,’” she said. “I knew it was a lot of money. I knew it would take a long time to pay. But I didn’t realize how much this debt could prevent me from having anything to pass on to my future children.
Santana isn’t sure if her refinanced graduate loans — which total about $40,000 — qualify for debt relief under Biden’s plan, and she doesn’t know where to find answers.
“That’s the thing that worries me the most, like, does that mean $5,000 of my debt is wiped out? Because that’s what I still owe for undergraduate,” he said. she said. “Or does that mean $20,000 is wiped out? Those are two very different realities.”