Five Americans on what $ 50,000 in federal student loan forgiveness would mean to them
About 43 million Americans owe $ 1.5 trillion in federal student loans, a huge number with far-reaching economic implications.
Student debt has been shown to hamper the growth of small businesses, prevent young families from buying homes, delay marriages, and prevent people from saving for retirement.
Emotionally, too, the effects are varied. A 2017 study showed that students with debt are less likely to access the desired profession, instead of prioritizing loan repayments. Adults report feeling depressed about their high student debt. According to a survey, 1 in 15 student borrowers said they had considered suicide because of their debt.
But what if all had to disappear or at least part of it?
President Joe Biden pledged to write off $ 10,000 in federal student debt during the election campaign. Many in his party want him to be more ambitious. In February, Senate Majority Leader Chuck Schumer, DN.Y, and dozens of Senate and House members called on Biden to write off $ 50,000 in federal student debt for all borrowers.
Biden said he didn’t think he had the power to write off that much debt. In April, his administration asked the education ministry to draft a memo on the legal issues surrounding debt cancellation. While student debt relief will likely be left out of its annual budget, experts say it’s likely because it’s waiting for the report, not because the cancellation is totally irrelevant. Meanwhile, student debt continues to affect the lives of many across the country.
NBC News has spoken to people across the country about what student debt cancellation will mean to them. Here is a selection of their stories:
Steven Mewha, 36, grew up in a Scottish working-class Irish family in Philadelphia and is now a lawyer in Hawaii. It’s a classic American achievement, but it was not without challenges – and debt.
He graduated from Temple University in a recession with approximately $ 40,000 in debt.
“I wanted to improve my life, I wanted to get out of the working class.” Mewha said. “Of course I could have stayed home and skipped college, worked a $ 40,000 a year job. But I wanted more.
“I was fired from my first real job,” he said. Then he got a job running a movie theater, and the interest on his loans kept piling up. In addition to student loans, he also had considerable credit card debt, which he described as the “unsung villain of college education.” He eventually decided to continue his studies and enrolled in law school.
To do so, however, he had to take on more debt. Despite studying law and studying at a public school, he now has a debt of approximately $ 190,000.
He now works as a lawyer, but has to pay over $ 1,200 per month on his loans. That combined with the high cost of living in Hawaii, buying a house and having children doesn’t seem like a possibility until the age of 40.
“The $ 50,000 forgiveness of student debt would absolutely stimulate the economy in a way that is very difficult to calculate,” he said. “I could live, really live – that would be a stimulus.”
Jess Gawrych and Arielle Atherley
Jess Gawrych and Arielle Atherley, both 28, met at Boston University and have been together ever since. After college, they both pursued masters studies at George Washington University in Washington, DC, where they now reside and work.
Together, they have student debt of approximately $ 278,000, and together their payments total approximately $ 900 per month.
Gawrych and Atherley are both first generation college students from immigrant families. It was so important to go to college that at 18, they didn’t necessarily think about what it was costing them. Gawrych says she now sees higher education as a mistake.
“To be honest, $ 10,000 doesn’t sound like a lot to me,” Gawrych said. “Mainly because of some of the interest on the loans, it would barely scratch the surface.”
Erasing $ 100,000 “would help with a lot of the typical things in life that people want,” Atherley said, such as marriage, a house, kids. With their loans on hold due to the pandemic, the couple were able to buy a car – something they couldn’t have done with the hefty monthly loan payments.
“I try to manage my expectations, but being able to save even $ 100, $ 200, $ 300 per month would make a huge difference in the long run.”
“I wouldn’t even begin to describe how grateful I would be if my debt were forgiven,” said Gladys Villegas-Ocampo of Florida.
Villegas-Ocampo, 39, who was born in Ecuador and came to the United States as a young child, says when bills come in every month – cars, rent, loans, insurance – she has to choose which one to pay.
She initially enrolled in college sometime after high school, but was unable to graduate because she needed to work.
“I have lupus. I have to be seen by a doctor almost every week, these payments add up,” said Vilegas-Ocampo.
This year, the now married mother-of-one will graduate after returning to complete her studies, in hopes of being able to get a better paying job to support her family. She will graduate with over $ 50,000 in federal student debt and a monthly payment of $ 336.
“Sometimes I feel really guilty,” she said of the decision to go back to school. “I feel a lot of pressure to make sure I get a good paying job just to justify my decision.”
Getting a job, she said, “isn’t about being anxious to be able to buy the things I want.”
“I need a job so that I can earn enough to pay off my loan.”
Alicia Corby, 38, took out more than $ 225,000 in federal student loans to attend law school. Her current balance is now around $ 350,000.
“I owe about $ 40,000 a year in interest,” said Corby, of California. Interest rates on his original loans were between 7 and 13 percent. She consolidated them, and now they hover between 6 and 8 percent. Still, “it’s almost impossible to pay off the principal balance unless you earn a ridiculous amount.”
Corby, a mother of three, left the workforce to care for her children. She put her loans on loan, but after running out of extensions she had to return to work.
To her, “$ 10,000 wouldn’t look like nothing,” but $ 50,000 of forgiveness would put her in a better position, although it would still be of great interest to her, she said.
If the government is serious about helping alleviate the crisis, it needs to do something about interest rates and allow tax deductions for principal and interest payments, she said.
“They are not private lenders. It’s the federal government – and interest rates are predatory, ”she said.