‘Not a gift-giving year’: student loan debt upends US borrowers’ holiday spending | Trump administration
A. last questionnaire It found that a whopping 40 percent of student loan borrowers say their loans negatively impact their ability to meet basic needs such as food, housing and transportation; This financial burden becomes even more apparent during the holiday season.
At first glance, someone like Ben L should not have financial difficulties. She attended Georgetown University and Columbia University for her undergraduate and graduate degrees, respectively, and currently earns a six-figure salary working for a biotech company. The 36-year-old is still drowning in student debt.
“I never took all my vacation days because I couldn’t afford to go anywhere,” he said.
She’s left with credit card debt accrued over the past 15 years of living in New York, as well as a $95,000 Sallie Mae loan (private, not federal) that she has to pay off from a master’s program she completed in 2018. During the holidays, Ben L is reminded of the debts that prevent him from participating in the joy and generosity of the season.
“It would be nice to participate in some kind of nominal gift-giving event, but it’s not possible. None of my friends expect that from me,” he said. “In fact, many of them are actively keeping me financially afloat.”
Ben’s monthly student loan payments are about $1,850 a month, he said. Adding that to the rent of a one-bedroom Hell’s Kitchen apartment and other expenses, including complicated medical bills, leaves no room for much else. “My life isn’t that empty — I live well, I eat enough and I’m fine — but there’s literally nothing extra,” he said. “I actually live paycheck to paycheck.”
Ben L’s story is far from unique. Lately questionnaireFrom the Institute for College Access and Success (TICAS) and Progress Data found that more than a third of survey respondents say their credit negatively impacts their ability to cover health care costs for themselves or their dependents; 52% of borrowers said their loans negatively impacted their ability to save for retirement, while 45% said their debt negatively impacted their housing plans.
“The most concerning thing to me is the percentage of borrowers who report trade-offs between meeting basic needs and student loan payments,” said Michele Zampini, vice president for federal policy and advocacy at TICAS.
“This tells us that whatever safeguards are theoretically remaining in the repayment system are not working properly to protect borrowers. [having to make] these exchanges.
Those assurances are further diminished by the recent announcement that the Trump administration will eliminate the Biden-era student loan repayment program. The Value Education Savings (Savings) plan is an income-driven repayment program launched in 2023 with the goal of cutting undergraduate loans in half, bringing some borrowers’ monthly payments to $0, and offering early forgiveness to borrowers with low balances.
The Trump administration has argued that the Save program is illegal and an excessive use of federal power. One Press releaseThe Department of Education announced it would halt all new Save enrollments, reject pending applications, and transfer existing borrowers to alternative repayment plans.
Zampini expressed deep concern about the administration’s decision.
“All borrowers will see higher monthly payments than they normally would,” he said. “On top of that, there is no safety net for borrowers to quickly access other affordable plans because they haven’t built it yet. [them] outside.”
One of those borrowers is Erin O, 31, who works in the nonprofit sector. She is currently enrolled in a Savings plan and estimates that her monthly payments will double, if not triple, after the plan ends. It was also enrolled in the Public Service Loan Forgiveness program, which faces an uncertain future because of the Trump administration’s plan to limit eligible organizations. ideological foundations.
“No one makes it easy for you to understand the information you need to know,” he said.
Erin’s loans were due while the lawsuit over her savings plan was ongoing, but she will soon have to start paying off the remaining $34,680 in federal loans she took out to fund her master’s program in international communications. He will travel from Denver to Texas to be with his family for the holidays. They decided in advance that Christmas would be a simple Christmas.
“Over the last few years, especially with Covid, I’ve definitely reduced my holiday spending to just immediate family and very close (decades-long) friendships,” he said.
The purse strings are getting tighter this year, and she said: “Everyone in my immediate family agrees that this year isn’t really the year for gift-giving.”
