When the COVID pandemic first hit, Joanna Dailey, a third-year student studying history and psychology at John A. Logan College in Carterville, Illinois, realized she would have a hard time focusing in virtual classes. Having already accumulated $58,000 in debt over their three years of college, they decided to drop out of school temporarily during the pandemic to focus on paying off their loans.
But the epidemic persisted — and got worse. Dailey, then an assistant manager at Dairy Queen, moved to Bay St. Louis, Mississippi, to be close to family in September 2020. They moved to another Dairy Queen location, working in the same position for lower pay. The 24-year-old changed his job several times before finding his current position at Kay Jewelers.
Since they did not graduate, Daile was unable to defer their loans, and could not go back to school without taking out more loans. Their payments are up to $750 a month – more than half of their salary. Daily told BuzzFeed News that they want to resume their education, but the risk of taking on more debt severely limits their options. Their goal now is to go back to school by 2025, if they are able to.
Student loan debt is a heavy burden shared by more than 40 million Americans. It can follow people throughout their lives and keep them away from important accomplishments like buying a home or, in Dailey’s case, getting a degree.
Under the CARES Act, student loan repayments were paused, and federal student loan interest rates were set at 0% as of March 2020. In August of this year, a month before the pause expired, President Joe Biden pushed the deadline to resume payments until January 31, 2022.
With COVID cases soaring last month, the president announced on Wednesday that he will extend the pause until May 1, 2022. But Biden — from I promised on the campaign trail To waive $10,000 in student loan debt to each borrower—he did not suggest it would completely cancel student debt, progressive lawmakers have demanded, a move that would provide massive financial relief to millions of Americans.
In announcing the extension, Biden acknowledged the difficulties more than 40 million borrowers have faced during the pandemic.
“Now, while our job recovery is one of the strongest on record — with nearly 6 million jobs added this year, the fewest Americans filing for unemployment in over 50 years, and overall unemployment at 4.2 percent — we know that millions of student borrowers, Biden said in his December 22 statement.
Biden also promised that the Department of Education would introduce support programs in the meantime and help borrowers make payments in May 2022. But several borrowers told BuzzFeed News that the extension does not solve the dire financial problem of the $1.7 trillion owed in US student loan debt (including Federal and non-federal loans).
“I just hope it helps those who can’t afford their education and those who have private student loans because it was their only option,” Dailey said. “Adult in [the] Upper middle class and upper class can survive, but lower middle class to lower class, we can hardly live off our payments.”
Student loan debt isn’t just a problem for millennials, according to Alan Cowling, founder of StudentLoanJustice.org, a group that advocates for complete abolition. More than half of all borrowers are over 35, according to 2020 Department of Education data. Older people owe more than younger people, even though they may have borrowed less money years ago initially, Colling said in the group’s response to this Biden extension. the week.
BuzzFeed News has reached out to members of the “Student Loan Justice” Facebook group, where borrowers are sharing their stories and supporting each other. Many of them have reacted to the recent extension of the Biden administration with deeply personal stories.
Christina Allen, 52, lives near San Francisco and has another online semester for her bachelor’s degree in nursing from Regis University. She initially took out loans when she started studying to become a registered nurse as her twin daughters attended college. I graduated in 2008.
“I was a poor single mother, and I desperately wanted my twins and their little sister to live a better life,” Allen said, adding that her three daughters are all college graduates now. “My granddaughter doesn’t know what hunger is, so the cycle of poverty has stopped.”
Over the years, Allen has paid off $90,000 in loans but still owes about $75,000; Her initial loan was less than half that amount. Between 2015 and 2016, around her third year of a bachelor’s program at Regis, Allen defaulted on her federal loans and charged her exorbitant interest and fees. She is also subject to a withholding of her wages, which means that a percentage of her disposable income is withheld until her loan is paid off or she is considered non-defaulting. She said a quarter of her pre-tax income had been slashed since 2017 until the first pause in loan repayments came during the Trump administration.
Biden’s announcement of a loan repayment extension came as relief. But once payments resume in the spring, Allen thinks she will have to “give up on her dream” of earning a master’s degree to focus on paying off her wages withholding loans.
“Retirement? Our Own Home?,” Allen, who said she has lupus and a related blood clot disorder, told BuzzFeed News. The discontinuation has given her much-needed financial respite to provide care for her husband, who has terminal cancer, as well as About tackling her health issues she neglected.But Allen said she couldn’t get close to family and friends in New England.She needed current health insurance provided by work to pay for her husband’s chemotherapy,support herself,and pay off loans.
“I’d like to work less and take care of my health, but I can’t, because of my loans,” Allen said.
Like Allen, Michael Goolsby, a 56-year-old who works at Walmart in Fernley, Nevada, said Biden’s new deadline would postpone his pay booking; He told BuzzFeed News that since 2019, 15% of his salary has been withheld to pay off his loans. Goolsby holds BA and MA degrees in history from Colorado State University. When he finished his master’s degree in 1991, he had $25,000 in student loan debt.
The following year, he was told he was facing a default. As a result, his school did not send his grade records to potential employers, he said. He accepted an offer in early 1994 to consolidate his debts under the Sallie Mae program, which required him to take out a $36,000 loan. But he said multiple payment deferrals and defaults exacerbated his debts, causing him to fall behind no matter how much he worked, which eventually led to a wage foreclosure. He said he’s trying to keep other debts low so he can eventually file for bankruptcy.
He said his student loan debt now stands at more than $100,000.
“I have done many things over time to get a job, from driving a truck, running a fast food restaurant, working on an assembly line, being a legal assistant for a San Francisco law firm for six years, working in IT and providing technical support for 15 years , then drive a cab and leave California for Reno, Nevada, because that’s where the jobs are nowadays as I’m working on retirement, which may not be until my 65th birthday in 2030,” Goolsby said. “But here I am.”
Justin Shank, 43, a teacher in Macon, Georgia, said he owes $80,000 in loans from his college degree and college studies.
“I went to grad school to try and improve my life and increase my income, just to add more loans,” he told BuzzFeed News. Shank said he blames himself for not thinking about the cost of a graduate degree, “but this predatory lending system certainly hasn’t helped.”
He said that not using his hard-earned money to pay off his loans during the pandemic has allowed his family to “reinvest” in his community. They put a new roof on their house to keep the roof from leaking, and they resolved to shop from local businesses.
“Once payments start again, that money will essentially be withdrawn from the local economy,” Shank said.
Yirzely Villanueva, 27, of Canyon Country, California, said she was feeling “relieved and nervous” about the extension. She told BuzzFeed News that she has more than $40,000 in debt from her master’s degree in teaching from the University of Southern California. She said she was glad the interest was paused and she could pay back “exactly” what she borrowed.
“My loan is 60% of my savings and so I’m stuck,” she said. “Either I pay off my loan and remain bankrupt, or I wait and be indebted indefinitely.”
As a Mexican-American woman, Villanueva said she feels the “roof is really stacked” against her when it comes to getting loans to buy a home or a car. With my luck, I get scared as soon as I get a ‘push’ [my student loans] will be cancelled. “
She said the extension makes her wonder why borrowers are not allowed to repay their interest-free loans.
“I feel like I’m stuck in a horror movie waiting for the ‘attention monster’ to take me,” she said.
Like others, Lindsey Summers, 31, in Portland, Oregon, said the extension isn’t enough. “I can’t say I’m unhappy with this extension, but it’s hardly enough for the millions of borrowers who are struggling,” Summers told BuzzFeed News.
She said she owes about $75,000 in a bachelor’s degree in communications from Lock Haven University in Pennsylvania. She was having trouble qualifying for public loan forgiveness and said she was “struggling to make ends meet” with her loans and her salary as a journalist. She said it was hard trying to talk to the government and her loan server, with long waits on the phone.
“It is the servant who works with the borrowers, and when you ask them for specific information, they point to the school,” Summers said. “Schools don’t have to keep records, by the way, for longer than 5 years — at least according to my institution. I wanted to see a detailed receipt of how my loans applied to my education. I had no idea if I would ever get an answer. It was nice to be notified records will be destroyed.”
Summers noted that although public schools were supposed to be affordable, they weren’t right for her. “I just want to be able to buy a house and move on.”
Amy (who asked BuzzFeed News to use her first name only for privacy), 55, is a former teacher in Louisiana. She said she originally borrowed $46,000 when she started college in 1997; After paying off loans “honestly” for nearly two decades, she still owes $30,800.
“I really thought President Biden would keep his promises to help Americans like me who have been taken advantage of by a predatory loan system,” she said. “It seems I was wrong.”
“I now owe almost as much as I borrowed, even after 20 years of paying it off!” Amy told BuzzFeed News. “I have resigned myself to the fact that I will never in my life be able to repay it. I will take them to my grave.”
Amy said she has applied for teacher tolerance programs in the past but has always been rejected. “I really thought President Biden would keep his promises to help Americans like me who have been taken advantage of by a predatory loan system,” she said. “It seems I was wrong.”