HOUSTON – President Joe Biden announced in late August a plan for student loan forgiveness that eliminates $10,000 in federal student loan debt for those with incomes below $125,000 a year or households that earn less than $250,000.
The plan grants an additional $10,000 in relief for borrowers who received federal Pell Grants to attend college.
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The debt cancellation applies to federal student loans used to attend undergraduate and graduate school. Current college students qualify if their loans were issued before July 1.
Under the plan, 43 million borrowers are eligible for some debt forgiveness. About 20 million are expected to get their debt erased entirely, according to the Biden administration.
In Texas, more than 3.6 million residents (12.5% of the state’s population) owe a combined $120 billion in student debt to the federal government, according to a study by the Education Data Initiative. On average, a borrower from Texas owes $32,920 in student loan debt.
Among the state’s indebted student borrowers, 16.9% owe less than $5,000; 20.3% owe $20,000 to $40,000 (average $28,463); and 1.6% owe more than $200,000, according to the study.
We surveyed Houston-area residents with student debt and asked them how the loan help would affect their lives and finances. What we got back were dozens of responses from borrowers across the spectrum. Some owe a few thousand dollars in student debt while others owe more than $100,000. Some secured a degree while others did not. Some recently graduated while others are nearing retirement age.
Scroll below to read their stories. The responses were edited for clarity and content.
Jennifer, 33, of Houston: “This cancellation will be a huge blessing to my life”
How much does your household earn annually?
$55,000 or less
How much do you owe in student debt?
$14,000
How much do you expect will be wiped out by the student loan forgiveness plan?
$10,000
How has your student debt affected your life decisions?
“Ever since being furloughed for a whole year from my job and having to find a second source of income to just live, my daily life was a struggle. I had to put my student loans to the side because I just couldn’t pay for them.”
How will the debt cancellation affect your life and finances?
“This cancellation will be a huge blessing to my life and finances because I will be able to use what I would be spending on my student loans towards my wedding I’m planning right now, as well as starting a family.”
MORE: Biden’s student loan plan: What we know (and what we don’t)
Hadassah Morales, 26, of Baytown, Texas: “Hope restored, family restored”
How much does your household earn annually?
$56,000 to $75,000
How much do you owe in student debt?
$14,000
How much do you expect will be wiped out by the student loan forgiveness plan?
“Hoping all.”
How has your student debt affected your life decisions?
“First of all, it has affected my mom most of all because I could not have gotten this loan without her. She chose to sacrifice her desire to continue her education so I could get mine. When I graduated and couldn’t find work to help repay this loan, she struggled through and paid something toward it every pay check. I am cautious and weary about loans and would get panic attacks just thinking about the money. This is a jubilee for me and my family and I give God thanks and praise all the time.”
How will the debt cancellation affect your life and finances?
“I will be able to breathe and won’t constantly (be) waiting for the other shoe to drop. My mom’s credit score also took a beating, so this will really help us to restore it and have things run smoothly. I can actually save and invest in my future without added stress or fear. There is hope and real light at the end of the tunnel for a lot of us. Hope restored, family restored. You can’t get better than that. It has already taught me to be more disciplined in life and my finances and not to take things for granted.”
MORE: Biden’s student loan forgiveness plan could lower debt for more than half of Texas college graduates
Yvette Guice, 48, of Houston: “ A weight off my shoulders”
How much does your household earn annually?
$76,000 to $100,00
How much do you owe in student debt?
$100,000
How much do you expect will be wiped out by the student loan forgiveness plan?
“I wish all of it.”
How has your student debt affected your life decisions?
“It’s been hard trying to go back to school already with so much debt. Financial aid doesn’t come through when you have already met your max with them due to the loans you got before.”
How will the debt cancellation affect your life and finances?
“It will be a weight off my shoulders. Sometimes these lenders don’t think you have other bills to pay. When you are the sole breadwinner and you have a house note, car payments, bills for the household…I have stayed up for nights trying to figure out a plan of action. I am taking anxiety meds due to me not being able to be calm. I take a prescription so I can sleep every night because I can’t stop worrying about everything.”
MORE: Who gets student loan forgiveness? Relief prompts joy, angst
Akira, 43, of Cypress, Texas: “It will give me some relief”
How much does your household earn annually?
$76,000 to $100,00
How much do you owe in student debt?
$79,627.42
How much do you expect will be wiped out by the student loan forgiveness plan?
$20,000
How has your student debt affected your life decisions?
“I still have not completed my degree because they are telling me I met my max. It’s awful. I have attended online because I’m a mother of five working full time, so I do not have the availability to go to a campus. However, online is double the cost if not triple of local colleges. So my financial aid funds are exhausted and now I have this huge bill and still no degree.”
How will the debt cancellation affect your life and finances?
“It won’t eliminate everything, but it will give me some relief so that I can hopefully complete my last few courses to obtain my degree. But then I still will have to pay back the rest.”
MORE: Student loan help for millions coming from Biden after delay
Sarah Knight, 44, of Spring, Texas: “True student loan debt reduction would change our lives”
How much does your household earn annually?
$151,000 to $225,000
How much do you owe in student debt?
$104,000
How much do you expect will be wiped out by the student loan forgiveness plan?
“Not enough.”
How has your student debt affected your life decisions?
“My family has been plagued with severe health problems. We lost our youngest son 11 years ago to mitochondrial disease. Our second youngest child has the same disease and struggles to lead as normal a life as he can, despite it. Our oldest child had to have a hip replacement at the age of 18 because of congenital hip dysplasia and will be having her other hip rebuilt this December. She will be 21. She has also needed to have multiple eye muscle surgeries, beginning at age 6 months, in order to see. Finally, I have severe rheumatoid arthritis that has never gone into remission. I’ve been on every drug available, but they either do not work or I am allergic to them.”
“I write all of this out because my husband has a great job and works extremely hard to provide for all of us. However, with the nonstop, insane, and unpredictable medical bills we have dealt with since almost the beginning of our marriage, we have barely ever been able to make even the minimum payments on our student loans. Now we have two kids in college and we feel like the worst parents because we have never been able to save to help them pay for school. We live pay check to pay check. Having such an enormous student loan debt has affected our ability to provide well for our family, under our unique situation. There is no way to predict or prepare for having three of our four children with major medical needs. We would do anything for our kids. We just wish our student loan debt wouldn’t be there, adding to our already difficult financial situation.”
How will the debt cancellation affect your life and finances?
“If the debt cancellation would actually help us remove most of or all of our student loan debt, we could finally make a dent in the hundreds of thousands of dollars of medical bills we have piled up on us. We could get lower interest rates for our mortgage or car payments because our credit scores wouldn’t be so low. We could help our kids pay for college and maybe even put some money into our retirement accounts and savings. True student loan debt reduction would change our lives.”
MORE: Student loan relief highlights burden on Black borrowers
Julie, 37, of Katy, Texas: “Not having student loans hanging over us would mean a perfect credit score for me”
How much does your household earn annually?
$126,000 to $150,000
How much do you owe in student debt?
$10,000
How much do you expect will be wiped out by the student loan forgiveness plan?
$10,000
How has your student debt affected your life decisions?
“When buying our house, we had the money saved, our credit was perfect, we had done absolutely everything we needed to do, but because of our student loans, our debt-to-income ratio was too high to qualify for what our income level should have qualified us for.”
How will the debt cancellation affect your life and finances?
“Not having student loans hanging over us would mean a perfect credit score for me. It is the only thing I still struggle with and preventing me from getting good APR rates that effect my monthly payments on EVERYTHING.”
MORE: Student loan crisis awaits new generation despite Biden plan
Tila, 56, of Cypress, Texas: “I will die with student loans”
How much does your household earn annually?
$126,000 to $150,000
How much do you owe in student debt?
$260,000
How has your student debt affected your life decisions?
“It’s $1,300 dollars a month. The government gets their cut before groceries, gas, rent, insurance, and other living expenses. It’s tough.”
How will the debt cancellation affect your life and finances?
“It won’t affect me. The government has already charged me $30,000 in finance charges on the loan. I won’t see any benefit from the cancellation amount and I don’t make enough money as a nurse practitioner to ever be able to pay this off in my lifetime. I will die with student loans.”
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Victoria, 40, of Richmond, Texas: “I fully expect to be paying off my student loans well in to retirement”
How much does your household earn annually?
$126,000 to $150,000
How much do you owe in student debt?
$130,000 ($10,000 of that is interest)
How much do you expect will be wiped out by the student loan forgiveness plan?
$20,000
How has your student debt affected your life decisions?
“I need a new vehicle soon, but I’ve hesitated because I will have to begin paying my student loans again. I really can’t pay a car note and student loans concurrently. I will most likely have to keep my 8-year-old vehicle in order to afford my monthly payment for my student loans.”
How will the debt cancellation affect your life and finances?
“As a Pell Grant recipient, I potentially could cancel $20,000 from my student loan debt. However, that’s only a 15% reduction. I’m sure it will lower my monthly payment, but I fully expect to be paying off my student loans well in to retirement age.”
MORE: Are you a Pell grant recipient? This is how to check as student loan forgiveness comes to the fore
Do you have outstanding student loans? 🎓 Will student loan forgiveness change your life? We want to hear from you. Share your story with us here.