The newspaper asked student loan borrowers to share their stories. Here’s what they told us:
Research shows that many borrowers also took on other debts during the payment freeze. Economists are University of ChicagoFor example, we found that those who benefited from the moratorium increased their leverage by an average of $1,200.
Against this backdrop, borrowers say they are feeling stressed. The Washington Post asked people across the country to share their experiences with repayment. Here are some of their stories.
Miami — Student loan balance $47,000
Crista Mateo-Rivera is one of the nearly 7 million college students who graduated during the pandemic and have never had to pay student loans. She borrowed her $47,000 to earn her master’s degree in counseling at Florida International University and now works full time as an academic advisor and part time as a data analyst.
As the end of the hiatus approached, Mateo-Rivera said he felt the weight of debt weighing on him. There wasn’t really any spending she could cut from her budget. She lives at her home with her parents to save on her rent and rarely goes out due to her work schedule.
“I spend money on things I need, like car insurance, car payments, groceries, phone bills, etc. I’m still looking at every expense and thinking about where I can cut costs. Others What can we do?” Mateo-Rivera said. “Miami is an expensive city, so we’re already doing everything we can to save money.”
Mateo Rivera breathed a small sigh of relief when he received his first student loan statement in September. Her payment was $115 after she was switched to the Biden administration’s new income-driven student loan repayment plan.
“It’s manageable,” she said. “There’s still going to be some stress. I still have to figure things out, but I don’t necessarily feel like I’m drowning like I thought I would.”
One thing Mateo-Rivera said he will have to give up, at least for now, is plans to move. In the two years since her graduation, she has been saving up a few dollars in hopes of getting her own place to live, but Miami’s high rent and additional fees have made that goal even more achievable. I can’t do it anymore.
Mateo-Rivera said he is always conscious of costs. She started attending community college to save on her tuition. When she transferred to Florida International University to earn a bachelor’s degree in psychology, she worked the whole time to avoid taking out loans.
Mateo-Rivera said he doesn’t regret getting an education, but worries the cost will lengthen his path to economic prosperity. She said her family instilled in her that education was the key to success and the American dream. Mateo-Rivera said her grandparents, who are from the Dominican Republic and El Salvador, consider her “the hope of her family” and the culmination of her hard work to survive in this country. he said. She was the first in her family to earn her master’s degree, an achievement that seemed to guarantee her success.
“But then reality sets in,” she said. “Just getting a degree doesn’t mean you’ll be successful. You also have student loan payments to make. What are your job prospects? The situation I’m in right now doesn’t give me much hope about my financial prospects. ”
KINGWOOD, Texas — $15,000 in unpaid student loans.
A lot has changed for Jamie Hannan over the past three years. During that time, he and his wife welcomed their third child and moved into a new home.
They planned to use some of the money from the sale of their old home to increase insulation and replace the windows in their new home. At the time, Hannan and his wife were hoping to benefit from President Biden’s program to forgive up to $20,000 in federal student loan debt. The policy would reduce their total student loans from $30,000 to $10,000, giving the couple the peace of mind to put more money toward a home. But the Hannans put renovations on hold after the Supreme Court struck down Biden’s plan.
In recent months, the couple began scrutinizing their spending and looking for places they could cut back. They considered eliminating some streaming services and subscriptions, such as the Noggin Kids app, but didn’t want to sacrifice their child’s education to save a few bucks.
Instead, Hannan and his wife made another tradeoff. Rather than leaving their youngest child at a daycare center near their home, the couple decided to add 45 minutes to their daily commute to leave their 21-month-old son at an affordable location near their old home. . Hannan said all of the nearby options cost about the same amount as the $500 he and his wife collectively have to pay each month in student loans.
“We love the daycare and have no complaints, but it’s a 45-minute drive,” Hannan said. “We thought we were going to have to start making student loan payments. You can’t add $500 a month in childcare fees on top of that either.”
Hanan considers herself lucky to have two master’s degrees and relatively little educational debt. He received a scholarship from Austin College, a small Presbyterian school near Dallas, which allowed him to earn undergraduate and graduate degrees in education with only $1,000 in debt. But after years of teaching, Hannan wanted a career change and went back to school to earn a master’s degree in public policy from the University of Houston.
He currently works as a policy analyst for a local government, a position that includes eligibility for the federal Public Service Loan Forgiveness Program, which allows public sector and nonprofit employees to have their loan balances forgiven after 10 years of service. I am qualified to become one. Mr. Hannan has considered the program, but worries that political headwinds could jeopardize his future and his ability to successfully get the loan forgiven. So for now he plans to focus on paying off his debt as soon as possible.
Toledo — $70,000 student loan balance
Sally Obersky has been making student loan payments for more than 30 years and still has $70,000 left. That means she will have to postpone her retirement for longer than she would like.
The 65-year-old has taken out student loans for most of her adult life, earning an associate’s degree in legal assistance technology in 1989 and a master’s degree in organizational leadership in 2011. .
“When I took out these loans, I had no idea that years later I would still be struggling to pay them back,” said Obersky, who works in communications for a healthcare nonprofit. “I’m 65 years old. I want to be done with this.”
she is one of a growing group 2.7 million Borrowers age 62 and older with student loan debt. With many people nearing retirement or already living on fixed incomes, they collectively owe $115 billion (an average of about $42,500 per person). This puts added pressure on many older households, especially at a time when they are already facing rising prices and higher borrowing costs.
Obersky said the three-year suspension of payments helped her pay for repairs to her mother’s home and unexpected medical expenses during the pandemic. Although she feels lucky that she has a fixed mortgage and a stable job, she still makes adjustments to squeeze out an extra $200 a month from her budget. She says she had to.
“I lost a lot of weight,” she said. “This was a whole process of resetting the budget: This is what I make, this is what I owe, and what can I cut?”
Mr. Obersky cut many subscriptions, including Apple TV, Hulu and the New York Times, and cut spending on concerts and restaurants. She says the changes aren’t life-changing, but they’re noticeable.
She has regrets too. Obersky has only been making minimum payments and has had his loan deferred several times “because he had other priorities,” he said. And despite her 11-year tenure in the Catholic Diocese of Toledo (which would have been enough to fully repay the loan through the federal government’s Public Employee Loan Forgiveness Program), she never enrolled.
“It seemed like a big hurdle to jump over, but I was paying what I could at the time,” she said. “But sometimes you make mistakes in your life, and I was no different. I’m thinking of retiring in a few years. But before that, I have one more debt to pay off. not.”
COLUMBUS, Ohio — $20,000 in outstanding student loans and another $40,000 on the way
Tasha Fry’s student loan debt is about to triple. The mother of four has $20,000 left in her student loans from earning a bachelor’s degree at Ohio State University and a master’s degree in business administration from Park University. There are only a few weeks left. Soon, her balance grows to her $60,000.
Fry, a program manager at a prison hospital, and her husband, a plumber, have been preparing as best they can. They’ve pared down their groceries to the bare essentials and cut back on weekend outings to trampoline parks and skating rinks with their children, ages 11 to 14. Instead, they visit local pumpkin fields, camp in their backyards, and go to the movies. Tickets for Tuesday are just $5 each.
“So far I’ve been able to get by,” she said. “But with everything else going on, we definitely find ourselves having to cut back on some of the extra things we’ve been able to do.”
Frye also downgraded her internet service and canceled Paramount Plus. This is a total savings of $45 per month. She and her family have also cut back on her eating out, replacing weeknight fast food restaurants with home-cooked meals. These tradeoffs help soften a monthly budget that includes many fixed costs, such as an $1,800 mortgage and a $450 car payment on Frye’s Honda Accord.
“Right now, things aren’t terrible. My student loan payments are only $266 a month,” she said. “But I’m worried about what will happen when the remaining $400,000 comes due.”
Frye sometimes wonders why she took on additional debt to get her MBA and whether it will pay off. But these days she feels like she needs a graduate degree for any job offer, so her last two years of classes and additional costs are a long-term investment in her career. She says it has become. Additionally, the suspension of her student loans and the persistent hope that the Biden administration might cancel some of her outstanding debt made it easier for her to justify the additional costs.
But now that the payments have started to come back, she is starting to feel depressed. Her family’s grocery costs have risen over the past three years, causing her to spend more on necessities like utilities and gas. Although the pay was good and raises were frequent, it was difficult to keep up with inflation. And the past few years have given her a glimpse of what life could be like without student loan debt, she says.