By Ella Azoulay | August 17, 2023
Tens of millions of student loan borrowers are painfully aware of the tumultuous nature of student debt news and the state of cancellation. Even worse, the rollercoaster of events over the last few months relating to the lawsuit and the Supreme Court’s decision has resulted in mass confusion. President Biden’s new plan to cancel student debt through the U.S. Department of Education’s (ED) existing rulemaking process, while hope-inducing, adds complicated policymaking to the long list of information borrowers have received.
Amid the chaos, hundreds of thousands of student loan borrowers are receiving the best news this week: that their debt is gone. This is the result of the Biden Administration successfully adjusting over 800,000 borrower accounts to correct previous failures of the student loan system. The cancellation these borrowers are experiencing is historic. However, this only eradicates the debt of roughly 2 percent of federal borrowers. The remaining 98 percent are still waiting.
Pundits have debated the merits and picked apart the authority underlying cancellation, knowing they would go home to the comfort of their luxurious homes and without having to worry about debt themselves. Now, with monthly payments resuming in October and a long road ahead before ED reaches a final rule on cancellation, borrowers are at a loss. The real life experiences of student loan borrowers must be centered every step of the way because the policymakers and those in positions of power are often so far removed from the issue.
While waiting for cancellation, borrowers teeter on the precipice of financial ruin or fall into poverty. It’s a policy and moral failure of our government that the student debt crisis has gotten this bad, and caused so much pain.
- Erica from Maryland has hit some common obstacles but student debt makes stability impossible: “I’m left with the uncertainty of how to keep my children and I afloat with the limited income that I have. I just learned that I have MS and am in the process of getting a divorce. I am happy to be the first in my immediate family to graduate from university, but I’m living in poverty at the moment. I’m unable to land a job and bills are piling up.”
- Robin from California shared: “I don’t know how I can make payments again. I have over 90k in debt and I’m a single mom who lives hand to mouth. I am drowning in financial insecurity due to the pandemic [and] inflation… I am riddled with stress and anxiety. I worry everyday what straw will break my back [while] being a paycheck away from extreme poverty at any moment. If payments [resume] I will certainly default on my loans… I’ve already filed bankruptcy once and still have all this debt that I couldn’t possibly payoff in my lifetime.”
Some borrowers, including those with Parent PLUS loans, have access to even fewer programs that grant them any kind of relief. Some Parent PLUS borrowers can, in fact, access Public Service Loan Forgiveness (PSLF) for example—but only if they jump through a number of complicated hoops. They are stuck watching their balances balloon with no way out.
- Patricia from New Jersey says: “My original Parent PLUS loan was $100,000. I couldn’t afford to make payments and requested forbearance. The loan then grew very quickly to $125,000. I work in a non-profit, drug treatment center… My salary is low but my work is critical. I have been denied [every] loan forgiveness program including Public Service Loan Forgiveness because I have a Parent PLUS loan for my daughter’s education… I am 62 soon to be 63, I am looking at paying this loan for the next 20 years until I am 83!”
Payments resuming before cancellation means borrowers are facing impossible choices and sacrifices no one should have to make.
- Kellie from Washington says: “I am going to have to make drastic cuts to my groceries in order to ensure I can make payments. I am not sure if I will be able to afford to go to the doctor or pay for my prescriptions.”
- Elizabeth from California is out of options: “The delay in debt forgiveness is a lingering cloud over my head at a time when I am already anxious … due to the loss of my job caused by the [fire] that destroyed the town… I have never been able to fully recover from that tragic event as I had to become the full time caregiver to my husband who recently died after a lengthy illness. I am now living on widows benefits. I am 63 years old and am not really able to return to the workforce due to stress related issues, nor can I afford to make payments on a loan that I hoped would be paid before I retired.”
Student debt is so inescapable, so all-encompassing, that borrowers are alarmingly experiencing deteriorating mental health because of it.
- Maria from New York is in urgent need of relief: “I have had this loan for 25 years. I am 47, I have no car, no house and no savings. I am unable to pay this debt. It went into forbearance at the time; I couldn’t afford to pay a $600 loan [payment] plus rent, buy food, and other bills. If this debt is cancelled, I will be able to afford a car so I can travel to work… I am struggling. This [debt] is taking a mental toll on me. I feel like a failure. Some days I think of suicide due [to] the mounting debt…”
- Monicka from Ohio has succinctly summarized the desperation of millions: “My student loans have caused me major depression, anxiety, and suicidal thoughts.”
Finally, one borrower captured the heart of the movement in just five words. It’s really the only factor that matters and alone is justification for immediate intervention via cancellation.
- Chidi from Colorado: “Not able to pay bills.”
The best way President Biden and his administration can help these borrowers now is by expediting ED’s rulemaking process to deliver and implement a final rule as quickly as possible. These borrowers and millions of others can’t wait another moment. In fact, their suffering means that the arrival of financial relief is already far too late.
Note: The names of borrowers who wished to remain anonymous have been changed to protect their identities.
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Ella Azoulay is the Research & Policy Analyst at the Student Borrower Protection Center. She joined SBPC from the Center for American Progress where she worked on higher education policy and advocacy.