Who gets student loan relief? Borrowers’ joy, and bitterness

For the millions whose entire student debt is being wiped out, the Biden administration's announcement on forgiveness means new freedom to move, start a family or keep a low-paying but fulfilling job

For Nick Marcil, the cancellation of $10,000 of his student loans could mean at last moving out of his parent’s house.

Marcil, 24, studied at a Pennsylvania state college, earned scholarships and worked jobs while pursuing degrees in education but still owed $18,000 before Wednesday’s action by the Biden administration to erase some student loans.

“I feel like if I don’t have that burden, I’d be more likely to, you know, try to move out — try to have, you know, my own place," said Marcil, who lives in a Philadelphia suburb.

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 a low-paying but fulfilling job. 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 won’t be forgiven. Other Americans resent the break current debtors will receive because they already paid off their debts, worked to avoid college loans or oppose the move on philosophical grounds.

Then there are the systemic effects. Some inflation-watchers worry new spending power for borrowers will drive up prices even more. The loan forgiveness is estimated to cost the government more than $300 billion, according to an analysis from the Penn Wharton Budget Model. And the relief does nothing to address the ballooning cost of college.

Frustration may be greatest for the more than half a million people owing upwards of $200,000 in federal loans. For those borrowers, $10,000 to $20,000 seems out-of-touch with 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. That’s roughly equivalent to her household’s annual income. “It’s overwhelming,” she said.

Smith, who works full time doing student outreach for the Young Invincibles, a nonprofit that advocates for college students and young people, estimates that she and her partner will both pay a combined $900 a month to service their student loans once she graduates.

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

Having a child also feels painfully out of reach. Smith plans to put off motherhood until she’s paid off her school debt.

“I was poor growing up, and I don’t want that for my child,” she said. “I don’t want to say you can’t attend that field trip or you have to wear hand-me-down clothes that the other children make fun of.”

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

“If he had erased my debt, I’d pull out my Mirena tomorrow,” she said, referring to her contraceptive device.

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

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

“If the Biden administration or any governmental administration is concerned about equity, then it just doesn’t make sense to make people who can’t afford it take out money to be able to go to school,” she said.

While $10,000 or even $20,000 doesn’t 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 of my parents years to pay off their college debt, and now they’re being told that if they had just waited for a little while it simply would’ve vanished,” said George Washington University student Jackson Hoppe, 19.

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

A bailout “places an additional burden on Americans, many of whom didn’t even go to college,” Hoppe said. “Don’t take out a debt that 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 go to college or graduate school, steps considered necessary for joining and staying in the middle class or advancing beyond it.

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

Giglio, 20, is in the country without legal permission and doesn’t qualify for federal loans because she doesn’t have a Social Security number. She won’t 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 years studying graphic design at Suffolk University, is already paying nearly $400 a month to pay off the 12% interest on the money she borrowed to finance her first two years of school.

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

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

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

“To put this much financial responsibility on an 18-year-old who just got out of high school is not a responsible thing to do,” she said. “Society and schools don’t prepare us to make these types of financial decisions.”

The decision brought joy for the many whose entire debt is being 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 “due to an assault that affected my mental health, so paying off my loans has been difficult.”

She’s paid off $2,000, but the debt has accrued to slightly more than $10,000 with interest. Minus a few hundred in private loans, the forgiveness measure means her debt will be gone.

“I am SO RELIEVED,” she wrote via Twitter direct message. “I feel like I can just move on from that time in my life now and stop stressing about these ridiculous interest rates.”

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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 nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

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