This column, originally published on September 7, 2022, has been updated.
Patricia Young recently made the final payment on her daughter’s federal student loans in August 2022. Shortly after, President Biden introduced a one-time forgiveness program that would eliminate up to $10,000 in federal student loan debt for individuals earning $125,000 or less per year, or $20,000 for Pell Grant recipients and married couples making less than $250,000. However, Young was skeptical about the forgiveness program and decided to pay off the debt instead, taking advantage of the payment pauses that were enacted during the pandemic.
By paying off the loans, Young has positioned herself financially better now that the Supreme Court has rejected Biden’s forgiveness plan. She does not regret her decision to pay off the loans, even though some borrowers who saved their payments or took advantage of the forgiveness loophole may now regret their decision.
Young’s daughter graduated from the University of Maryland Baltimore County and completed postgraduate work at the American Musical and Dramatic Academy. Like many other borrowers who were able to continue making payments, Young saw it as an opportunity to aggressively pay down her daughter’s education debt. Even during the loan pause, more than 9 million borrowers made payments between April 2020 and June 2022.
The Supreme Court’s decision to throw out the debt forgiveness plan has left some borrowers disappointed. However, Young says that each time the government extended the loan pause, it allowed her to pay down more of the principal. She made consistent payments of $300 per pay period, which all went directly toward reducing the loan principal. When she made her final payment, the balance was just $208.18.
Many borrowers who requested refunds in hopes of taking advantage of Biden’s forgiveness plan were not financially struggling. They had more disposable income due to reduced spending during the pandemic, which allowed them to pay off their loans.
As a taxpayer who would have been responsible for funding the loan forgiveness, Young appreciates her decision to pay off the debt. She believes that her daughter received a valuable education and that she should not take advantage of the relief now being offered to others. Young feels blessed to have been in a position financially to pay back the money.
While there are differing opinions on Biden’s loan forgiveness plan, Young understands both perspectives. She believes forgiveness would have been a good start but thinks that the entire student loan process needs to be reevaluated to ensure that payments do not become a burden.
In conclusion, Young’s story highlights the importance of making thoughtful decisions about student loan debt and considering various factors, such as financial position and personal beliefs, when evaluating forgiveness programs.
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