Teacher with $303k in student debt says Biden’s $10k relief plan isn’t enough – Natural Self Esteem

  • Biden is reportedly considering $10,000 in student loan relief for federal borrowers.
  • Cheryl told Insiders that the amount would make no difference to her $303,000 in debt.
  • She said she has no problem paying back what she borrowed, but the interest keeps getting bigger.

If not for the compound interest, Cheryl — who requested that her last name be withheld for privacy reasons — might have made a difference to President Joe Biden’s plans to forgive $10,000 in student debt for federal borrowers.

But with $303,000 in state student debt — and an additional $20,000 in private student loans — the president’s plan just doesn’t cut it.

“That’s not even a drop in the bucket,” Cheryl, 53, told Insider. “If you really wanted to make a difference you could cancel half of the interest accrued, but right now I’ll never be able to cover the payments.”

As a teacher in Massachusetts, Cheryl had to take out student loans for her bachelor’s degree in English and her master’s degree in education. While she said she had no problem paying off the debt she borrowed, the problem was the interest she accrued while she was in school and her loans were condoned. This makes it almost impossible for her to match her main balance at her current income level.

Biden has not confirmed an amount for a possible student loan forgiveness, but recent reports suggest he is considering $10,000 in relief for federal borrowers earning less than $150,000 a year. While that’s an amount he promised to fulfill during the campaign, many Democratic lawmakers and supporters had hoped it would get bigger and are disappointed that he appears to be committing to an amount that will meet the $1.7 trillion student debt burden of the USA would hardly affect .

“At the end of the day, we have to realize that $10,000 isn’t enough,” Wisdom Cole, the national director of the NAACP Youth & College Division, previously told Insider. “$20,000 is not enough. $30,000 isn’t enough. We must cancel at least $50,000 or more. Isn’t the goal to provide the greatest possible relief for most borrowers?”

“I’m totally screwed” if student loan payments resume

The Biden administration has stressed that before student loan payments resume after Aug. 31, it will make an announcement to broad relief. But if it’s $10,000 in forgiveness, Cheryl said she can’t afford her federal debt bill on the income she’s earning right now — especially as she prepares to send her nephew, who she sponsors, to college.

“I’m totally screwed,” Cheryl said. “And now I’m trying to get a boy through college and he got a good scholarship but it’s not paying off at all. I have no idea how to do this, I guess I’ll have to get other work.”

During the payment hiatus, Cheryl was still making around $400 monthly in payments on her private student loans, and not having to make the $200 monthly federal payments under her earnings-related repayment plan gave her a bit of financial breathing space, which she has helped afford other basic needs.

“I have $200 to get gas, groceries and everything else, and there’s not much left after that,” Cheryl said. “It keeps you in this nasty little loop that you can’t get out of because I can’t afford to pay it back, and the interest keeps coming.”

Although Cheryl’s job technically qualifies for the Public Service Loan Forgiveness (PSLF) program, which forgives student debt for public employees after ten years of qualifying payments, she was denied because, she said, she spent time on forbearance at school would have.

The Department of Education has announced measures to allow previous payments to count towards forgiveness, but Cheryl is still waiting, saying: ‘The money made from teaching will never come anywhere close to what you have to borrow to become one .”

How lawmakers are reacting to the potential $10,000 relief

Biden himself has not confirmed an amount of student debt he will forgive for federal borrowers, but when he said $50,000 in relief was off the table last month, some Democratic lawmakers and advocates became concerned. Massachusetts Sen. Elizabeth Warren — one of the leading voices for broad student loan forgiveness — released data emphasizing that greater relief will be far more effective.

The data showed that $50,000 of debt relief would bring the balances of 30 million, or 76% of all federal borrowers, to zero, compared to 13 million borrowers for $10,000 of debt relief.

“As this analysis clearly shows, student debt relief is a matter of racial justice and relieving the millions of hard-working people who invested in their education but are now drowning in debt,” Warren said in a statement. “The more President Biden resigns, the more we narrow the racial wealth gap among borrowers and the greater the uplift for Americans’ economic future. This is the right thing.”

But Republican lawmakers say just the opposite. Insider previously reported GOP concerns that Biden is canceling student debt to win Democratic votes in the midterms, and Virginia Foxx — a leading Republican on the House Education and Labor Committee — has frequently said that canceling student debt is making inflation worse and would cost taxpayers the $150 billion cost of the pandemic’s payment pause.

For Cheryl, the problem is simple – she wants to pay back what she borrowed and nothing more.

“I don’t mind paying back the money I borrowed,” Cheryl said. “But I object to the government making their money off my back.”

Do you have a story to tell about student debt? Contact Ayelet Sheffey at asheffey@insider.com.

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