Student loan forgiveness sees relief for some, while many still struggle

Lauren Taylor

STUDENT LOAN FORGIVENESS HAS BROUGHT RELIEF TO MANY, BUT FOR A SIGNIFICANT NUMBER OF BORROWERS, IT HASN’T BEEN THE FINANCIAL REST THAT THEY WERE HOPING FOR.

ACCORDING TO A RECENT REPORT FROM THE WALL STREET JOURNAL, DESPITE MORE THAN 900,000 BORROWERS HAVING THEIR LOANS FORGIVEN THROUGH THE PUBLIC SERVICE LOAN FORGIVENESS PLAN, MANY ARE STILL STRUGGLING WITH OTHER DEBTS AND POOR CREDIT SCORES. 

ACCORDING TO THE EDUCATION DATA INITIATIVE, THE AVERAGE STUDENT LOAN DEBT IN THE U.S. IS AROUND $38,000 FOR FEDERAL LOANS AND OVER $40,000 WHEN YOU INCLUDE PRIVATE LOANS. THAT’S A HEFTY AMOUNT FOR MANY BORROWERS, EVEN WITH SOME FORGIVENESS. 

UNDER THE PUBLIC SERVICE LOAN FORGIVENESS PLAN, MANY BORROWERS SAW SOME OR ALL OF THEIR DEBTS WIPED AWAY AFTER MAKING THE EQUIVALENT OF THE 120 QUALIFYING PAYMENTS WHILE WORKING IN PUBLIC SERVICE OR NONPROFIT SECTORS. BUT ACCORDING TO THE JOURNAL, EVEN WITH RELIEF, MANY BORROWERS ARE STILL FINDING THEMSELVES IN A DEBT CYCLE. 

RESEARCHERS SAY THAT BORROWERS SIMPLY REPLACE THEIR STUDENT DEBT WITH OTHER FORMS OF DEBT INCLUDING CREDIT CARS, AUTO LOANS, EVEN HOME LOANS. 

A PROFESSOR WHO HAD $90,000 IN LOANS WIPED AWAY, TOLD THE JOURNAL THE RELIEF WAS LIKE  “TAKING SANDBAGS OFF OF HER BACK,” BUT SAID IT WASN’T LIFE-CHANGING.

WHILE FORGIVENESS PROGRAMS ARE MAKING AN IMPACT, BORROWERS ARE STILL NAVIGATING A COMPLEX FINANCIAL LANDSCAPE WITH CHALLENGES BEYOND STUDENT DEBT. 

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