Who Gets Forgiveness for Student Loans? Relief evokes joy, fear

For Nick Marcil, the $10,000 cancellation of his student loans could mean he’s finally leaving his parents’ house.

Marcil, 24, attended a state university in Pennsylvania, earned scholarships and worked while pursuing a degree in education but still owed $18,000 before Wednesday’s action by the Biden administration to clear some student loans.

“I feel like if I don’t have that burden, I rather, you know, try to move — try, you know, to have my own place,” said Marcil, who lives in suburban Philadelphia.

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

Many student borrowers feel left out, perhaps because they didn’t qualify for federal loans and had to rely on private loans, which will not be forgiven. Other Americans hate the break current debtors get because they’ve already paid off their debts, worked to avoid student loans, or resisted the move on philosophical grounds.

Then there are the systemic effects. Some inflation watchers fear that new purchasing power for borrowers will push prices up even more. Loan forgiveness is estimated to cost the government more than $300 billion, according to an analysis of the Penn Wharton Budget Model. And the relief does nothing to address the rising costs of college.

The frustration is perhaps greatest for the more than half a million people who owe more than $200,000 in federal loans. For those borrowers, $10,000 to $20,000 seems out of line with the exorbitant cost of American higher education. Average college tuition in the state last year cost more than $10,000, and the average private university charged $37,000 a year.

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

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Smith, who works full-time in student relief for the Young Invincibles, a nonprofit that advocates for college students and young people, estimates that she and her partner will pay $900 a month together to pay off their student loans once she graduates.

“We’re talking about buying a house, but it just doesn’t seem like something I’ll ever be able to do,” she said.

Having a child also feels painfully out of reach. Smith plans to postpone 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’m not saying you can’t attend that field trip or wear discarded clothes that the other kids joke about.”

If President Joe Biden chose to pay off more student debt, it would have a bigger impact, she said, especially for black women like her. Statistics show that they have a higher share of student debt than white college graduates because they have no family assets to fund their education.

“If he’d forgiven my debt, I’d get my Mirena out tomorrow,” she said, referring to her contraceptive.

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

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

“If the Biden administration or any government is concerned about justice, then it just doesn’t make sense to let people who can’t afford it borrow money to go to school,” she said.

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While $10,000 or even $20,000 may not seem like enough for many 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 student debt, and now they’re being told that if they just waited a little while, it would just have disappeared,” said Jackson Hoppe, a 19-year-old student at George Washington University.

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

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

Borrowing money has been the only way for many Americans to get to college or graduate school, steps deemed necessary to get into and stay or advance in the middle class.

It is harder for Catari Giglio to fund college and join the middle class than it is for most Americans. Giglio’s parents are from Chile and the family moved from Italy to Boston at the age of 13.

Giglio, 20, is in the country without legal clearance and is ineligible for federal loans because she does not have a Social Security number. She will not receive any benefit from Biden’s debt cancellation plan.

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

“It’s frustrating. It’s 10 times harder for me to go to school, to make money,” she said. “There is no help for us.”

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Giglio has applied for legal permanent residency in the US and hopes to have more options to pay for school once she gets a green card.

She has some regrets about the commitments she has made and questions the American education system that has left her with a mountain of debt.

“It’s not responsible to put so much financial responsibility on an 18-year-old who is just out of high school,” she said. “Society and schools are not preparing us to make these kinds of financial decisions.”

The decision brought joy to the many whose debt has been forgiven in its entirety.

Emily Taylor, a single mother of three in Louisiana, owes $12,000 in student loans even though she never finished college. As a Pell Grant recipient, she expects everything to be eliminated.

Taylor, who works in customer service, said the cancellation will allow her to start saving for the education of her children, aged 14, 12 and 10.

“Knowing that I can help my kids do it differently, and fund their education in a way my parents weren’t able to fund mine, that’s a big deal,” she said.


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 corps members for the Associated Press/Report for America Statehouse News Initiative. Report for America is a national, not-for-profit service program that places journalists in local newsrooms to report on classified issues.


The Associated Press education team is supported by New York’s Carnegie Corporation. The AP is solely responsible for all content.

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