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Student loan forgiveness won’t happen soon. Here’s how the Covid-19 forbearance helped borrowers.


At the outset of the pandemic, millions of Americans with federal student loans were granted a brief reprieve: Donald Trump’s administration waived interest rates and allowed borrowers to pause their payments, initially for 60 days and then until January 2021. The pause was extended by President Joe Biden, first through January 2022 and now through May 1.

Some 45 million Americans owe more than $1.7 trillion in private and public student loan debt, according to the Federal Reserve. Most student loans are federal, but an estimated $140 billion — about 8 percent of loans owed — are private. The average student debt for a bachelor’s degree hovers around $29,000, according to NerdWallet, and around $71,000 for a graduate degree. Based on data from the New York Fed, the average balance overall, regardless of degree, is about $35,000.

Until recently, the student loan freeze was set to expire at the end of January 2022. The White House initially resisted pressure from Democrats to extend it, declaring that it’s time for business to get back to normal. On December 10, White House press secretary Jen Psaki said at a press briefing that “a smooth transition back into repayment is a high priority for the administration.” However, on December 22, the Biden administration reversed course under continued pressure. In the coming months, the administration said, it will make sure borrowers “have the support they need to transition smoothly back into repayment” in May.

President Biden has resisted calls for him to cancel student debt through executive action — some Democrats on the Hill have urged him to forgive up to $50,000. And while Biden has publicly expressed his support for student loan forgiveness on the campaign trail, the president wants Congress to take the first step.

What happens when loan repayment restarts an open question. From an administrative perspective, it could get messy. Before the pandemic — and when the economy was ostensibly in a stronger position — people were already struggling to pay. During the 2019 federal fiscal year, which runs from October 1 to September 30, over 1.2 million student borrowers defaulted on their loans. That means one borrower defaulted on a federal loan every 26 seconds. According to Ben Kaufman, head of investigations and senior policy adviser at the Student Borrower Protection Center, that’s more than four times the rate of mortgage foreclosures.

Many borrowers have welcomed the pandemic-driven student loan freeze and, in some cases, benefited financially from the pause. Without looming monthly payments, they’ve been able to pay down other debts, take vacations, build up their savings, and make important purchases they’d held off on. Some have continued to chip away at their federal loans; these borrowers have taken advantage of the interest freeze to make large payments and reach the principal debt amount they owed after years of paying accumulating interest. Others have used the time to divert their efforts toward private loans, which weren’t ever paused.

We spoke with seven student borrowers about what the pause has done for them — what they’ve done with the money, whether it’s affected their lives, and if it has or hasn’t, how. Their answers, edited for length and clarity, are below.

Several people Vox spoke to for this story requested that their last names be withheld to protect their privacy.


Cheryl Patton, 43, living in Texas

Master’s degree, clinical mental health
Owes: about $51,000 through federal loans

I had to do some emergency repairs on my home because I had a sewer pipe break. It literally happened the day after I had surgery, and my refrigerator broke the following day. When it rains it pours. It’s hard to save money when you have a student loan payment every month that’s equivalent to a BMW payment. I’m very fortunate that I don’t have a car payment right now, so that’s been helpful. But I work a part-time job just to pay my student loans every month, which means that I get to spend less time with my kids, less time with my family; it’s just what I have to do to survive.

With the pause, I was able to save some money, and I went on a vacation by myself to South Dakota to visit my cousin and see the place where my grandpa was born. My cousin’s father worked on Mount Rushmore. It was the best therapy for my mental health and well-being. I did some car repairs and just a few different things around my house that needed to be repaired, some drawers and cabinets.

The pause has also enabled me to spend a little bit more on my health care because I’ve been able to better afford copayments. Medical care is expensive, and any kind of specialty care has at least a $40 copay just for me.

I am a single mom, and both of my sons are on the autism spectrum. My oldest son lives in a group home about 15 minutes away because I have to work two jobs, and I don’t have immediate family in Texas. Because I work so much, I spend less time with my disabled adult son who could so greatly benefit from having his mother around a lot more. My younger son turned 18 in February, and to file for legal guardianship, I had to put down a $5,000 retainer for an attorney. Life is just so expensive. I did pay on my loans some $3,200 to take advantage of the zero interest.

I’m more than willing to pay my debt, but just give me a fair chance.


Alex Warneke, 31, Washington

Master’s degree, sports management
Owes: $87,499 through federal loans

I have upward of $85,000 of student loan debt. With the forbearance period, I was finally able to pay into some of the principal of my loans. I was thankfully employed throughout the pandemic, so I’ve been continuing to pay. So far, most of what I’ve paid have been excess payments that I can allocate to whichever one of my loans I see fit. I started paying the interest down on my high-interest-rate loans and am actually getting into the principal of those balances. That’s really exciting for me. Since I graduated in 2014, I haven’t touched the principal because the interest rates were so high through the federal government and my loan servicer.

I’ve been paying off my debt for six to seven years but until now, I haven’t paid off the principal. It’s the way that the monthly payments are distributed; the amount I pay gets divided among each loan I have so that it’s never enough to pay off the accruing interest. I’m not alone in this. You commonly hear people complain about their loan balance going up even while they’re paying consistently.

My income level might’ve gone up after grad school, but that doesn’t necessarily correlate to the amount of dead weight I’m still holding financially. Even if there is going to be some sort of debt cancellation, there might be a stipulation that you have to make under a certain income level. I’ve been on income-based repayment for my entire pay period. The issue is that if you’re in a lot of debt, your payments increase along with your income, so you’re not able to save any money. I know I have to pay some amount of interest on these loans, but the interest rates right now are almost punitive.


Rebecca Bailey, 30, New York

MBA in accounting
Owes: about $75,000 total, $65,000 are private loans

It definitely gave more flexibility in my budget. Prior to the pause, my federal student loan payment was $378 per month, and that’s in addition to private student loans I’d refinanced, so I was paying over $1,000 a month and still am doing that. I took the opportunity to reflect and pause on other debt that I had to reduce the interest associated with those other debts. I did a couple more private student loan refinance deals and was able to get the interest for that to under 3 percent, which was really great. And then I also refinanced credit card debt consolidation. That was at 8 percent before, and now it’s somewhere around 5 percent. I really just used the other money to put it toward other debt.

Previously, I was just putting state tax refunds into a 529 account, [a savings plan to help pay for education], but I was able to allocate some of my monthly budget into a 529 in hopes that I can make a lump sum payment into student loan debt. I’m the account holder and beneficiary right now, but the good news is if I do have kids, I can switch it to one of their names as the beneficiary.

My credit score has increased by more than 40 points, and my previously nonexistent net worth has increased to above $150,000.

What most people don’t realize is that for federal student loan payments, if you’re on an income-driven plan, that payment is based on your adjusted gross income from your taxes that you file every year. Most people with student loan debt are so afraid to allocate a ton of money to retirement thinking that they just can’t afford it. They don’t realize that if they contribute more to a 401(k) through their employer, it reduces their student loan payment for income-driven plans. Especially for younger people, it just makes a lot of sense because the more they contribute and the earlier they contribute, the more opportunities they have. Most people don’t understand the connection for that, or which levers to pull and how.


Sarah R., 35, Minnesota

Doctor of Pharmacy degree
Owes: about $270,000, mostly through federal loans

The pause came at a really good time. I’m a health care worker, so obviously, I was still employed during the beginning of Covid when a lot of people were getting laid off. I was able to keep working and set money aside for maternity leave. I had a baby in June, and I was on maternity leave for three months. I used two weeks of paid vacation for that, but otherwise, the rest was unpaid. My student loan payments were about $1,100 a month, $500 private, $650 federal. I was saving that $650 a month during this whole time that it’s been paused.

When we were filing our taxes for 2020, I realized I’d only paid off about $10,000 last year. It was depressing, but it kind of made sense because I had taken some time off. It was at that point in time, in May, that I decided I was going to tackle that $25,000 that was sitting in my private loans as long as the federal loans were still paused. I tried paying it down using [personal finance expert] Dave Ramsey’s debt snowball strategy, paying off the smallest debts first. My next paycheck is Christmas Eve, and in between that and my Christmas bonus, I’m anticipating paying off the last $2,900. That’s going to be my Christmas present, New Year’s present, starting off the year with no more private debt.

My plan for this year, instead of doing a debt snowball, is to use the debt avalanche method. Because my federal student loans have varying student rates, my highest student loan interest rate is almost 6.5 percent, and that’s about $40,000. My goal for this year is to pay off that $40,000 and keep making minimum payments on the rest. The next highest is 5 percent, and I’m going to work my way down until my lowest one.


Noé Madrueño, 24, California

Bachelor’s degree, human biology
Owes: about $53,000 in federal loans

The forbearance period gave me a lot more flexibility to spend money without added pressure. I graduated from college during the pandemic, but I was able to find work. I made the decision to save money because I had this window of flexibility.

I was kind of hoping Covid would lead to some debt forgiveness, so it didn’t make sense for me to start paying early. I went to college as a first-generation student, so I didn’t have a lot of knowledge about how loans or financial aid worked. During this grace period, I became more financially literate, so that I can also help out my younger sisters who might go to college in a few years. Currently, I’m on track to pay off my loans over a 25- to 30-year period, which amounts to about $200-$350 worth of payments a month.

It was nice not having the thought of student loans constantly in the back of my mind. I was able to invest, go on vacation, buy a car, and spend a bit on myself. At one point, I even thought about putting down money for a house. I had around $15,000 in my savings account then, but I had an unexpected medical emergency, which the savings went toward. Still, I wasn’t as concerned about money because my loans weren’t due every month.


Victoria D., 23, Arizona

Bachelor’s degree, psychology
Owes: about $36,000 in federal loans

I graduated into the pandemic and was living by myself during the first year of forbearance, so I still had expenses to pay for rent, food, utilities, and insurance. At one point, I was working three part-time jobs. I would work two main jobs during the week that were more career-focused, and I had a retail job during the weekend. After spending four months applying for jobs, I finally got a full-time position and was able to purchase a car.

I wasn’t banking on the fact that my student loans would be forgiven due to Covid, so I started looking at future career options that can help me with these loans long term. I plan to go back and get my master’s degree in social work in the fall, which will push back my loan repayment. It’s a six-plus-year plan, but after I get my master’s and start working for the government or a nonprofit organization for a few years, I can qualify for $50,000 to $75,000 worth of loan forgiveness in Arizona.

The forbearance period allowed me to focus on paying for my essentials and maintain my standard of living, since I didn’t have to funnel my money into loans. Even without Covid, I knew that I had to start making payments six months after I graduated. I’ve been working two jobs throughout my entire college career. I tried to scale back how much money I took out, even though I was allowed more, but I’ve been living paycheck to paycheck. I’m always focused on making sure everything is paid for the month, so I haven’t been able to budget much.


Kaitlin Phillips, 33, North Carolina

Master’s degree, journalism
Owes: about $35,000 in private loans

My student loans are refinanced under a private lender, so the Covid forbearance didn’t apply to my situation. My husband also lost his job during the pandemic, so for a while, our finances were pretty tight. I still have about $35,000 left to go.

I completely understand the focus on federal student loans and how confusing the system is set up to be. But there’s also this subset of private borrowers who aren’t given as much attention and are also struggling with high interest rates. I didn’t start out with entirely private loans. A couple years after I finished grad school in 2011, I tried to pay off my loans through an income-driven repayment plan. For some reason, it didn’t take into account expenses like rent, so I was being asked to pay thousands of dollars a month.

I ended up consolidating both my federal and private loans through Earnest, and locked in a 6 percent interest rate for the life of the loans. What I pay every month doesn’t change with my income, and the rate is pretty good compared to what it was before when all my loans were from different providers. I was finally able to pay into the principal of my loans with consolidation.

If I was mostly paying interest this entire time, that would’ve been, psychologically speaking, a lot harder. And although I’m just a few years away from being done with my payments, I don’t want other people to have to go through that. I’ve wasted so much money paying off interest. I have worked in the nonprofit sector for several years, and because of my private loans, I’m not eligible for the public service loan forgiveness program. Most people don’t realize that.



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