DEBT DIARIES: 26 stories of the student-debt 'hamster wheel' that borrowers of all ages and incomes can't escape
Marianne Ayala/Insider
The $1.7 trillion student-debt crisis in the US continues to grow, making the burden heavier for millions of Americans.
Since March 2020, as part of pandemic relief measures, federal borrowers have not had to make student-loan payments, and interest on the loans has been waived. President Joe Biden extended the pause for a fourth time, through August 31, citing uncertainty with the pandemic. Advocates and lawmakers lauded the decision and the additional relief for 43 million federal borrowers.
But even during the payment pause, many borrowers did not feel relieved. The looming date for restarting payments sparked anxiety and fear among some borrowers who knew that even though they had not been required to pay off their debt over the past two years, they would not be able to afford an additional bill in just a few months. That's why some Democratic lawmakers are calling for Biden to cancel student debt for every federal borrower.
"More than 40 million Americans have benefited from the federal pause on student-debt payments, but without cancellation they will be buried under a mountain of debt once again," Sen. Elizabeth Warren of Massachusetts told Insider. "The president campaigned on canceling at least $10,000 in student debt, he has the executive authority, and now is the time to deliver."
Now, Biden is reportedly considering $10,000 in relief for borrowers making under $150,000 a year, and that announcement is likely to happen in July or August, closer to when payments are set to resume. But that relief could leave some borrowers out, like parents and graduate students, and the amount will not make a huge difference to those with much larger debt loads.
Over the past year, Insider has spoken with nearly two dozen borrowers who shared their experiences with the "hamster wheel" of student debt, its impact on their lives and their families, and their fears that their debt will follow them to their graves. Here are their stories.
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Over 8 million borrowers over 50 hold 22% of the federal student-debt load. The burden can be so heavy that some of those Americans will never see a life without student debt.
Three borrowers who fall into that category — David Wise, Linda Navarro, and Theresa Teders — shared how their debt had permanently altered their lives. They said they don't see it going away until they die.
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Paying off student debt is one challenge. Getting help from a student-loan company to actually pay off that debt is a whole other hurdle.
Two borrowers, Charles Moore and Lynda Costa, tried to contact the company that collects their debt for assistance with repayment, but hours-long waits and inaccurate information only caused their debt loads to surge even more.
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High interest rates are largely to thank for the $1.7 trillion student-debt load in the US, keeping borrowers from paying off balances far higher than what they initially borrowed.
Alexandria Mavin and Daniel Tapia are trying to pay off their student debt, but interest keeps adding on to their monthly bills, trapping them in a cycle of repayment.
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Ron and Marcia Rizzardi are a clear example of the toll that high interest rates can have on student debt loads. The couple started out with a combined $54,000 in debt from their educations, and over the past 25 years they've made $140,000 in payments. Today, they owe $130,000, and they don't see it going away anytime soon.
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Gwen Carney, 61, is raising her grandchildren on her own — with $75,000 in student debt. She desperately wants to give her grandkids the lives they deserve, but in order to do so she has to work a full-time job while sewing face masks on the side for some extra cash. The pandemic pause gave her relief, but she worries she won't be able to afford to pay her student debt and support her grandkids when payments resume.
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While the student-loan payment pause extended to federal borrowers, those with private student loans continued to see their debt grow.
Karla, a recent college graduate, has a student-debt load of $143,000, with $91,000 coming from private loans. Even though she's kept up with her monthly payments, the high interest is keeping her from even touching the amount she originally borrowed.
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Millions of parents across the country want their kids to access higher education but can't afford to do so on their own. So they take out Parent PLUS loans on behalf of their children to cover up to the cost of attendance.
While it's an easy loan to get, it's very difficult to pay off. Just ask Reid Clark, a 57-year-old single father with $550,000 in student debt for his five children. He said he didn't regret sending his kids to school, but he wished it had been harder for him to take on so much debt.
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Robert Pemberton wanted his two kids to succeed — and it came at the cost of $265,000 in student debt. He said that although he now makes a livable salary, his debt load became unmanageable after periods of unemployment and his wife's cancer treatment. He isn't sure when he will retire, thanks to the high interest rates on PLUS loans.
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Jeff O'Kelley, 57, has $104,000 in student debt from loans he took out to send his son to college. Like many parents who made the same decision, he said he didn't regret accumulating debt to give his son the best future possible. But he believes the "extraordinarily simple" process he followed to take on debt needs to change.
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Jeffrey Spencer thought joining the Army in 1976 would give him access to a free education. It didn't, and now, at 62, he has $104,000 in student debt. And while he works for the state of California, which would make him eligible for the Public Service Loan Forgiveness program, failures in the program led to his being denied repeatedly. He said he was tired of broken promises.
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Since 2017, when the first group of borrowers became eligible for the Public Service Loan Forgiveness program, which forgives student debt for public servants after 10 years, it's run up a 98% denial rate.
Lindsay Averbook, who has $81,000 in student debt, is one of the rejected borrowers. She's worked in public service — in mental-health care — for her whole career, and she said she didn't understand why it's taking so long to get the student debt relief she deserves.
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Maria firmly believes her $430,000 student-debt load was not worth it. She'd thought that pursuing a master's degree and a Ph.D. would land her a job teaching at a university, and she extensively researched the programs and their outcomes to ensure they were worth the cost. But a layoff and medical bills for her daughter's cancer treatment set her on a different course, and she said she sees herself dying with her student debt.
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As a presidential candidate, Joe Biden pledged to approve forgiving $10,000 in student loans for every federal borrower. He won Melissa Andretta's vote with that pledge.
Andretta, who has $163,000 in student debt, said she'd thought Biden would help with the student-loan crisis in the US, but now she feels "betrayed."
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Obtaining a higher education is a pillar of the American dream, and it's one that Juan Antonio Sorto, a first-generation college student, wanted more than anything. The cost of achieving that dream was $250,000 in student debt.
Sorto said that while he was proud of his accomplishments and the life his education had given him and his family, he wished President Joe Biden would do more to ensure others don't have to take on so much debt for an education.
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Danet Henry, 53, is a single mom of two with a $49,000 student debt load for her oldest daughter. And once her youngest daughter graduates in three years, that balance will likely double. That's because Henry took on PLUS loans — the most expensive type of federal loan — and while she knows she has to pay back her debt, she wishes parents could be included in relief programs.
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The spousal joint loan consolidation program was created in 1993, which allowed married couples to combine their student-debt loads into one loan so they could make just a single monthly payment with one interest rate. The idea is that it's a more affordable option.
But over a decade after Congress shuttered the program in 2006, some married couples are stuck in the program and cannot qualify for loan forgiveness because law prohibits them from separating their debt balances. Insider spoke to two couples — all public servants — who were told combining their balances was their best option, but they didn't know their loans would not be eligible for relief.
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With Biden considering $10,000 in student-loan forgiveness, borrowers like Cheryl say that won't make a dent in the student debt balances they hold. Cheryl, 53, has $303,000 in student debt — and while she doesn't mind paying back what she borrows, she wishes interest didn't accumulate so quickly.
Even if Biden cancels $10,000 in student debt, Cheryl said, she'll probably have to pick up a second job to afford payments when the pause expires after August 31.
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Robin O'Brien, 61, could not foresee the pandemic when she took out student loans to go to graduate school. There's no way she could have anticipated contracting COVID-19, and the medical bills that came along with it.
Now, as Biden gets closer to making a decision on broad student-loan forgiveness, O'Brien is also forced to make a decision: paying her medical bills or her $64,000 student loan bills — and she knows she cannot afford both. She's disappointed graduate students are not being considered in Biden's relief plans.
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Adria Mansfield, 43, has $187,000 in student debt she took out for her kids' education because it was the only way she could afford to give them the futures they wanted. But while Mansfield is among the three million families with parent PLUS loans, it's unclear whether they will be included in Biden's loan forgiveness plans. Mansfield wishes people like her were part of the conversation.
"Half of our children would not be able to go to school and become successful if it weren't for the parents," Mansfield said "And I just don't feel like it's fair that we're overlooked."
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Nick Crocker found a way to counter spiking rent costs in the country: moving into a school bus. But that doesn't mean he's able to pay off his $108,000 student debt load. Graduating into the 2008 recession, Crocker wasn't able to find a job in his field of study, pushing him to fall behind on his private student loan payments. Now, he's not sure when he'll ever be able to get out from under the debt.
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