Who Gets Student Loan Relief? Borrowers’ joy and bitterness

For Nick Marcil, paying off $10,000 in student loans could mean finally moving out of his parents’ house.

Marcil, 24, attended a Pennsylvania state college, won scholarships and worked while pursuing degrees in education, but still owed $18,000 before the Biden administration’s action Wednesday to write off some student loans.

“I feel like if I didn’t have that weight, I would be more likely to, you know, try to leave — try to have, you know, my own place,” said Marcil, who lives in a Philadelphia suburb. .

For borrowers like Marcil — including millions whose debt will be wiped out — the decision means new freedom to move, raise a family or keep a low-paying but fulfilling job. But for many others, the long-awaited plan brings bitterness and disappointment.

Many student borrowers feel left out, perhaps because they don’t qualify for federal loans and have had to rely on private loans, which won’t be forgiven. Other Americans resent the break current borrowers will get because they’ve already paid off debt, worked to avoid college loans or opposed the move on philosophical grounds.

Then there are the systemic effects. Some inflation watchers worry that the new spending power for borrowers will push prices even higher. Debt cancellation is estimated to cost the government more than $300 billion, according to an analysis by the Penn Wharton Budget Model. And the relief does nothing to address the rising cost of college.

The frustration may be greater for the more than half a million people who owe more than $200,000 in federal loans. For these borrowers, $10,000 to $20,000 seems irrelevant to the exorbitant cost of American higher education. Average in-state college tuition last year cost more than $10,000, and the average private college charged $37,000 a year.

Christian Smith, 32, will owe more than $60,000 when she finishes her undergraduate degree at the University of Colorado Denver next year. This is roughly equivalent to her annual household income. “It’s overwhelming,” he said.

Smith, who works full-time in student outreach for Young Invincibles, a nonprofit organization that supports students and youth, estimates that she and her partner will pay a total of $900 a month to service their student loans once graduate.

“We’re talking about buying a house, but it doesn’t look like I’ll ever be able to do anything,” he said.

Having a child is also painfully out of reach. Smith plans to delay motherhood until she pays off her school debt.

“I was poor growing up and I don’t want that for my child,” she said. “I don’t mean to say that you can’t go on this field trip or that you have to wear clothes that make fun of the other kids.”

If President Joe Biden had chosen to offer more student debt relief, it would have had a greater impact, she said, especially for black women like her. Statistics show that they hold a greater share of student debt than white graduates because they don’t have family wealth to help finance their education.

“If he had written off my debt, I’d have my Mirena out tomorrow,” she said, referring to her birth control device.

Dallas attorney Adwoa Asante borrowed $147,000 in federal loans to attend Emory University Law School. He graduated in 2015 and has since paid about $15,000. With interest, she still owes $162,000 — a debt she says has limited her career options.

Asante, who is black, said the $10,000 forgiveness is “better than nothing,” but a full forgiveness would go much further to improve the wealth gap between black and white Americans.

“If the Biden administration or any administration cares about equality, then it just doesn’t make sense to force people who can’t afford it to make money so they can go to school,” he said.

While $10,000 or even $20,000 doesn’t seem like enough for many over-indebted Americans, it’s too much for some student borrowers who see the scheme as an unnecessary burden on taxpayers.

“It took both my parents years to pay off their college debt, and now they’re being told that if they’d waited a little longer, it would have just disappeared,” said 19-year-old George Washington University student Jackson Hope.

Hoppe has his own federal student loans and expects to owe about $18,000 by the time he finishes his degree. But he doesn’t want forgiveness.

A bailout “places an extra burden on Americans, many of whom didn’t even go to college,” Hoppe said. “Don’t take out a debt you can’t pay off and don’t ask others to pay off your debts.”

Borrowing money was the only way for many Americans to go to college or graduate school, steps considered necessary to join and stay in or move beyond the middle class.

For Catari Giglio, financing college and joining the middle class is more difficult than it is for most Americans. Giglio’s parents are from Chile and the family moved to Boston from Italy when she was 13 years old.

Giglio, 20, is in the country without legal permission and does not qualify for federal loans because she does not have a Social Security number. He will receive no benefit from Biden’s debt relief plan.

Giglio, who expects to borrow a total of $150,000 in private loans by the end of her four years studying graphic design at Suffolk University, is already paying nearly $400 a month to pay back 12 percent interest on the money she borrowed to finance the her first. two years of school.

“It’s disappointing. It’s 10 times harder for me to go to school, to earn money,” he said. “There is no help for us.”

Giglio has applied for legal permanent residency in the U.S. and hopes to have more options to pay for school once she receives her green card.

She feels some regret about the obligations she has taken on and questions the American education system that has allowed her to accumulate a mountain of debt.

“Putting so much financial responsibility on an 18-year-old fresh out of high school is not a responsible thing to do,” he said. “Society and schools don’t prepare us to make these kinds of financial decisions.”

The decision brought joy to many that their debt is forgiven.

Breanna Clementine, 26, took out about $9,000 in loans to pay for college at Brigham Young University-Idaho, but she didn’t finish her degree. She dropped out of college “because of an attack that affected my mental health, so paying off my loans was difficult.”

He has paid off $2,000, but the debt has accumulated just over $10,000 with interest. Minus a few hundred private loans, the forgiveness measure means her debt will be gone.

“I’m so relieved,” she wrote via direct message on Twitter. “I feel like I can move on from that moment in my life now and stop stressing about these ridiculous interest rates.”


Associated Press writers Claire Savage in Chicago, Heather Hollingsworth in Mission, Kansas and Arleigh Rodgers in Indianapolis contributed to this report. Savage and Rodgers are members of the Associated Press/Report for America Statehouse News Initiative corps. Report for America is a nonprofit national service program that places reporters in local newsrooms to report on undercover issues.


The Associated Press education team receives support from the Carnegie Corporation of New York. AP is solely responsible for all content.

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