The High Cost of Not Forgiving Student-Loan Debt

Americans owe $1.3 trillion for higher education. Photo: Richard Baker/In Pictures via Getty Images

Not long ago, my fiancé and I had a depressing conversation. What would we do if we didn’t have nearly $60,000 in student-loan debt, combined? Buy an apartment, even a house, have a kid? All at once, the possibilities seemed endless. With our payments on pause for now, thanks to two executive actions, we allowed ourselves a little space to dream.

Dreams can be dangerous — dreams got us into debt. I took on student loans for a graduate program, desperate to shift four years at Bible college farther down my résumé. My fiancé, a first-generation college graduate who served in the Marines, could only make the GI Bill stretch so far. We are in our early- and mid-30s and we are mired in a prolonged adolescence neither of us wanted. We did everything we were supposed to in order to climb up the rungs to the American middle class. Now we’ll both be in debt in our 40s. Retirement feels impossible and so does parenthood.

President Biden offers households like ours some small relief, but his proposal to forgive up to $10,000 in public student-loan debt would only knock a few years off our payments. It’s not nothing, but it’s not much, either. A proposal by Senators Elizabeth Warren and Chuck Schumer, which would forgive up to $50,000 in public student-loan debt, would put us in the clear. It’s almost unbearable to contemplate.

The pain we feel when we imagine a debt-free life isn’t ours alone. We share it with hundreds of thousands of others who owe a total $1.2 trillion in student debt, and so I thought I’d pose the public question: What has student debt prevented them from doing? Below, a few of their responses.

Craig, 40

I was a late bloomer and didn’t start my undergrad until I was about 25. At that time, I started at a state school with the intention of becoming a languages or civics teacher. I transferred to a pricey private school to complete a degree in film production, which was significantly more expensive. My family was not able to offer any financial assistance, which necessitated working 30 hours a week. At times I was working multiple jobs with 45-minute commutes while completing 16 credit hours and the expected homework associated with those hours.

Since beginning full repayment about five years ago, I would conservatively estimate that I have paid back about $50K. But in the time since I have graduated, my balances collectively have gone up from $90,000 at the time I walked to $140,000 now. As my income has grown, so has my stability, but it feels in many ways [that] the system is designed to keep moving the finish line. A simple rewriting of the bankruptcy code would solve this problem for so many Americans and give our president a chance to right a wrong, but if something doesn’t happen soon, I will be 55 before I am fully free of this burden. Only then will I be able to plan for retirement. I have not been able to meaningfully save for retirement or pay down credit-card debt. (In many cases, I have had to lean on credit cards to cover budget shortfalls or cover quality-of-life expenses.) I haven’t been able to save for a down payment on a home, or cover any major purchase or car repairs, which drives up my credit-card balance again.

I have a relatively comfortable life, but it’s balanced on a knife edge and the constant fear of falling off has a mental-health toll as well. That is something that can’t easily be quantified.

Jana, 25

I started out with $20,000 and now I’m at $9,800 in federal loans for undergrad. Medically, I need a breast reduction. I need the surgery so that I can run more, so that I can be comfortable, so that I can purchase bras at normal stores. But some insurance companies will make you have documented physical therapy for six months before you get a breast reduction. My insurance company uses the “Schnur scale,” and it basically says, your frame has to be this small or else your boobs are just like your body fat, versus it being an actual medical problem.

So insurance is choosing not to cover something that is medically necessary, and that is paired with the fact that, yeah, my student loans are the exact amount that I would need to pay for it out of pocket. Without student-loan debt I’d be comfortable taking out debt for that, or even chopping down some of my savings for that. It’s kind of this perfect storm of all these bad things about America.

Rich people don’t have student-loan debt. I remember one time in a student-council meeting in college, I asked, who in here has student loans? And it was me and two other people out of a 30-person room that raised their hand. So there are a lot of people that are able to afford to go to college without taking out loans. Forgiveness just wouldn’t affect them. We’re not talking about them.

Anonymous, 38

Right now I owe $10,000 in public student loans. When I was married, I owed $75,000, and some of that was private. I’m from a family that didn’t have a lot of money. And I was the first one to go to college out of all of us. I was really struggling, and my parents were struggling financially to pay for it. At some point, my dad lost his job and we just couldn’t get the money together, and I was going to have to drop out of college. I talked to the school financial-aid people and they were like, “Well, you can get this private loan, but we need somebody to co-sign it for you,” and my dad’s credit was terrible. My then-boyfriend was like, “I’ll co-sign for you.”

We ended up getting married and it became a huge issue in our marriage. “You can’t have this because you have to pay off your debt. We can’t go out for pizza because we have to save money to pay down your debt.” We both made good money, and he had generational wealth from his family; all we had was my college debt. But he got very into the Dave Ramsey world. That really creates extra labor for women, because all Dave Ramsey’s extras are clothes and housecleaning and things that make a woman’s life easier. Then we are having kids. We were putting every single ounce of money that I earned into my debt. So I had no freedom. I had no money of my own. I couldn’t even buy shampoo.

What happened was we were just able to live off one income and I was emotionally trapped, and physically, too. Because that was the argument, too, against going to therapy, “We can’t afford it because you have to pay off your debt.”

Just cancel it. But that only solves part of the problem. What about the kids who are in school now? We really have to solve the problem of going to college is so expensive in the first place.

Lia, 31

I have $102,000 in student-loan debt and it has prevented me from switching jobs and purchasing a home. I’m a social worker at a nonprofit and I very much need to find a position that will allow me to earn clinical hours. But I’m three years into Public Student Loan Forgiveness and where I live, many jobs that would allow me to gain those hours are private/group practices that are definitely not nonprofit and aren’t eligible for the program.

I have a lot of trauma around housing stability and in the last couple years, I have been denied four apartments explicitly and implicitly due to my blindness. I’m apartment hunting again and the fear of that happening again is intense. I make enough money easily to afford a condo (it would be cheaper than paying rent in New Jersey), but I’ve talked to several mortgage brokers to attempt to start the process and have been told by each of them that my student-loan debt will prevent me from buying a house unless my income magically rises to six figures. Overall, my student-loan debt makes me feel like I’m constantly living in precarity and that I won’t get to feel stable and secure until it’s gone.

Brice, 33

My husband and I are in our mid-30s, both with graduate degrees and have worked full-time in professional fields for most of the years since we graduated in 2010–2011. After 14 years together, we’re finally saving for a house, a process much delayed and prolonged by $800-a-month student-loan payments. It feels like we’re finally on track to a normal middle-class life that our parents would have begun a decade earlier in their lives. Even though we can probably buy a house, it’s coming later in life and we’ll have to borrow more money to do it. If we take too much time in building a down payment, prices will rise and eliminate any savings the down payment would have earned.

We’re grateful for the relatively recent improvement in our situation, but it’s pretty obvious that we’ve worked harder for less than previous generations. We’ll probably forgo having children since adopting as a same-sex couple is difficult and expensive, and we may face discrimination. But in any case, we aren’t confident that we could provide a comfortable and dependable childhood. So student loans, and the greater hollowing out of the American economy, have delayed purchasing our first home and made it more expensive to do so and made not adopting a forgone conclusion. And we’re the lucky ones. Those who have children or other dependents, those who cannot find work that pays what their degree deserves, or who have debt from a degree they didn’t finish, are in worse spots.

It has created an overwhelming sense of resentment toward the individuals and generations who set up a system that so thoroughly exploited young people who were simply doing what they had been told was the path to prosperity their whole lives. Those same persons now try to withhold any reckoning or relief from this exploitation.

These interviews have been edited for clarity and condensed for length.

‘I Will Be 55 Before I Am Fully Free’