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If it weren’t for compounding interest, Cheryl — who requested her last name be withheld for privacy concerns — thinks President Joe Biden’s plans to forgive $10,000 in student debt for federal borrowers might have made a difference for her.
But with $303,000 in federal student debt — and an additional $20,000 in private student loans — the president’s plan just isn’t enough.
“It is not even a drop in the bucket,” Cheryl, 53, told Insider. “If you wanted to make a real difference, you could do away with half the interest we’ve accrued, but for 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 has no problem paying back the debt she borrowed, the problem is the interest that accrued while she was in school and her loans were in forbearance.
At her current modest income level, it’s been nearly impossible for her to make a dent in her principal balance, which has swelled to more than $300,000 thanks to all the interest.
Biden has not confirmed an amount for any student-loan forgiveness he might implement, but recent reports have suggested he is looking at $10,000 in relief for federal borrowers making under $150,000 a year. While that’s an amount he pledged to fulfill on the campaign trail, many Democratic lawmakers and advocates had hoped he would go bigger and are disappointed he appears to be settling on an amount that would hardly make a dent in the US’s $1.7 trillion student-debt load. Read more.
