In December 2019, my husband submitted his final student loan payment. From the moment we got married and started attacking those student loans as a team, it took us 18 months to pay off $51,234.51. Of that debt, $34,134.51 were federal loans and $17,100 were private. There is not one part of me that begrudges the millions of Americans who are on the precipice of receiving $10,000 to $20,000 in student loan relief.
From the outside, it appears as if my husband and I “pulled ourselves up by our bootstraps” to pay off that debt and heck, if we did it, then all student loan borrowers should have to as well. But that’s simply not a practical, kind, empathetic or, frankly, a reasonable response.
In terms of the “bootstraps” narrative, it’s important to acknowledge that my husband and I earned in the low six figures collectively and had no other debt besides his student loans. Granted, we live in one of the most expensive cities in the country, but during that time, we still had enough flexibility in our budget to pay off student loans aggressively and live our lives. There was no rice and beans. We still took vacations, went out to dinner, invested in our retirement plans and had a healthy emergency savings account.
However, this accelerated payoff strategy while balancing a well-rounded life would not have been possible without getting married. Well, that’s not entirely true — I could’ve still helped make payments on his debt as an unmarried couple, but I didn’t do that and don’t advise anyone to. My husband would not have been able to afford such an aggressive repayment strategy, even living a modest life, on his salary alone, which included overtime. In fact, getting married negatively impacted his monthly payments.
My husband, like many with federal student loans, was on an income-driven repayment plan, which caps your monthly payments based on a percentage of your discretionary income. That means those who aren’t earning a high salary but have significant loans will have a payment that’s affordable relative to their income. However, filing a joint tax return meant my income counted in the calculation, and his monthly minimum payment went up by a significant amount.
We made our decision to aggressively pay off the student loans based on what was in our best interest as a family and our mental health. Erasing his private loan made mathematical sense, but ditching the federal student loan debt at a rapid pace didn’t make much sense on paper, especially because my husband was eligible for two different forgiveness programs thanks to his job as a teacher. Forgiveness programs, depending on the type, eliminate some or all remaining federal student loans after a certain amount of service.
Had we elected to not pay off his federal loans aggressively, we could’ve paid off the debt slowly on his income-driven repayment plan and then ended up enjoying 2 1/2 years of a pause on payments during the pandemic that still would have counted toward his forgiveness eligibility. That would’ve been thousands of dollars back in our bank account with credit toward the remaining balance being forgiven — on top of the $10,000 in relief.
But for me, there’s no regret.
We decided not to pursue the forgiveness programs given the restrictions that would have kept my husband’s career in a particular type of holding pattern for five years to a decade, depending on the program. For example, the Public Service Forgiveness Program requires you to work for a government or nonprofit organization for a decade before your loans can be forgiven. This means that if you have an opportunity or desire to move into the private sector before your decade commitment is up, you’d relinquish the opportunity to have your federal loans forgiven. That’s a significant ask and could have long-term consequences on someone’s career and potential earnings.
Then, at the start of the pandemic, my income began to bottom out, and it was a huge sense of relief to at least be debt-free during a time when everything felt so volatile. Once the income concerns passed and financial stability returned, I still felt grateful to have gotten the debt anxiety off our backs.
Look, I know hackles may still be raising for some — and my anecdotal story isn’t likely to change anyone’s mind — but this is a nuanced issue with no perfect solution. The decision to provide one-off, lump-sum relief may be an imperfect option, but it will provide a much-needed financial lifeline to many Americans, some of whom did not entirely understand the consequences of taking on tens of thousands of dollars in student loans.
Historically, little to no meaningful education was provided to student loan borrowers. It was simple for people to access thousands of dollars in loans and not totally understand how much interest would accrue or even the true likelihood of gainful employment after graduation. You could’ve made a completely informed decision based on data and still your employment situation may not have resulted in the salary you needed to stay on top of your student loans.
It’s easy to put a 2022 lens over this problem, but I matriculated in 2007 — before the financial crisis — and I’m in the middle of the millennial generation. How many elder millennials were sold a bill of goods about the career opportunities and necessity of college only to end up being part of the mass layoffs and bottoming-out job market in the Great Recession? Then, when they finally began to feel some level of breathing room and financial stability, they were punched in the mouth by the pandemic.
Sure, there’s ample information and resources available for someone to be proactive and to do their own research. But we should be realistic about whether the average 18-year-old is making rational, practical decisions over emotional ones. Even parents can apply pressure about going to the school with the most prestige, no matter the cost. It’s also frustrating to see how many people are pointing fingers at “useless degrees” and “fancy schools” as if those are the only graduates who will be receiving assistance. It isn’t just liberal arts majors who struggle with the burden of student loans. It’s also irrational to expect everyone to be a STEM major.
For many, the concern is who will shoulder the financial burden of this student loan relief. Will it be the average taxpayer who either ground it out to pay off student loans or never even took them on at all? It’s currently unclear, and understandably people are worried about their own wallets being hit to help someone else. However, there are plenty of ways in which people’s taxes support systems for which they receive little to no benefit personally but help the wider community.
It’s always been strange to me how a contingent of people feel hellbent on making those coming up behind them struggle in the exact same way. We all know life isn’t fair, and some of us will be cut breaks at times in our lives or receive bouts of good luck that others simply won’t. But it’s a peculiar phenomenon to want people to struggle simply because you had to as well. It’s also a fallacy that the next generation has the option to even follow in the footsteps of its predecessors.
Will there be a portion of people who get relief who perhaps could be working harder? Sure. But will millions of Americans get a lifeline who have worked overtime or multiple jobs or had some unfortunate situations arise that are costly? Most definitely. Just because some people haven’t “earned” the relief to your personal metric doesn’t mean the many hardworking people who are struggling shouldn’t receive help.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Erin Lowry is a Bloomberg Opinion columnist covering personal finance. She is the author of the three-part “Broke Millennial” series.
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