On the eve of student loan cancellation, two Bostonians grapple with their debt
“Ours is a daily story of everyday people, caught up in this endless web of student loans, borrowing, repayments and refinancings that are part of the American way of life,” Forward, 35, said. “It’s always on our minds. What other generation had to talk about it so much?
Connors and Forward are among 43 million people – 900,000 residents of Massachusetts – who owe a huge sum $1.6 trillion in college debt. Ten years ago, that figure was $966 billion, according to the Federal Reserve Bank of New York. Ten years earlier? About $250 billion.
At the start of the COVID-19 pandemic, the crisis rose to the forefront of the political conversation for young debtors, when the federal government suspended loan repayments. Borrowers are now waiting to see if President Biden will extend the moratorium until the end of the year or until next summer, and, as he said during the election campaign in 2020, reduce by 10 $000 loans for “everyone in this generation.”
This move could lighten the load for many; the average graduate debt was $30,000 in 2020, up from around $17,000 two decades ago.
In the late 2000s, Connors borrowed $40,000 to attend Fordham University. The 34-year-old works as a program manager at a nonprofit health care organization, earning a salary that barely covers rent, essentials and medical bills.
While Forward withdrew significantly more — $174,300 — he’s the better placed of the two. A lawyer, Forward has endured tough years of low-paying jobs, but is finally earning enough money to buy a house in Jamaica Plain. And that’s not counting the money his mother borrowed for her undergraduate studies at Boston College.
The couple occupy different rungs of Boston’s educated millennial class. Neither thinks he or she would be a prime candidate for the loan forgiveness program Biden promises to be in the works, and Forward noted that there are many borrowers who deserve more relief than he does: people with onerous debts and jobs that don’t pay much. bump, or who did not finish college at all.
“I am rightly at the back of the pack. I’m a big believer in loan forgiveness to achieve greater equality, and I know that disproportionately affects people of color,” he said. “But I would like to have a reasonable chance of repaying the loans, which I don’t see myself having right now.”
Helplessness, anger, procrastination and, above all, anxiety, constantly cloud them, with debt testing their emotional strength as much as their long-term financial well-being.
“I kicked the road on my loans for a long time just to avoid the anxiety,” Connors said.
Only the A $10,000 discount that Biden mentioned would eliminate college debt for a third of borrowers. While the details of exactly what the relief would look like remain hazy, Forward and Connors are hopeful.
Connors’ loans paid for the chunks of his undergraduate degree in political science that his parents couldn’t cover. Debt seemed like a sensible route – at the time, perhaps the only route. For her graduate studies, however, she focused on public health and avoided borrowing money again with a $15,000 scholarship to Boston University and working full-time at Tufts Medical. Center.
Undergraduate loans still hang over her like a dark cloud.
“Having to pay so much in student loans is a uniquely American thing,” she said. “It haunts me every day.”
Like Forward, Connors asked that his exact salary not be disclosed. But at mid-five figures, his work at the Cambridge Health Alliance doesn’t cover much beyond the basics. Almost half are rented out for their studio in Brighton. Even a $60 grocery run triggers Connors’ anxiety, and the deluge of medical bills from a chronic illness — endless tests and extended, albeit infrequent, hospital stays — keep her going. awake at night.
“I feel like I got a bill from Beth Israel until the day I die,” Connors said.
Forty years ago, when tuition was much cheaper, both of Connors’ parents earned master’s degrees. They bought a house in the Bronx, New York with a modest mortgage and had young children. “It was a real thing you did,” she said. For her? “Not possible.”
When the stress is overwhelming, she often sends messages forward. He types in a response, just as annoyed.
Forward used the moratorium during the pandemic to refinance its debt to make monthly payments more predictable. These measures lowered his average interest rate from 7.4% to 3.5% and helped reduce his balance by $46,000.
That, and a better-paying job reading contracts for a tech company, improved Forward’s finances significantly. He and his wife own a three-bedroom condo. A miniature golden retriever has become their pandemic pup.
But even in his most comfortable position, the debts are so great that he can’t relax and can’t make them go away anytime soon.
Nine loans for Suffolk University Law School covered everything from tuition and books to groceries and rent. After graduation, the monthly bill payments — tied to his income — filled Forward with dread. His first job, reading contracts at a real estate firm in Woburn, paid just $17 an hour.
“I avoided everything, anything that had to do with loans to stay sane,” Forward said. “Thinking about it too much, I realized how big that number is, how hard it is to get it to zero.”
Every year for nearly a decade, he anticipated the arrival of the annual income statement for his loan repayments. The process became “four months of hell”.
Interest accumulated over time and eventually added more than $50,000 to Forward’s original balance. He now knows that he should have consolidated his debt sooner.
“They say it takes $250,000 to raise a child from birth to 18,” Forward said. “My loans are like adopting a child.”
Loan forgiveness – especially for high-income professionals such as doctors and lawyers – is controversial.
Republican lawmakers condemned it as an insult to those who have already paid off their debt and a burden on taxpayers.
Boston University economist Laurence Kotlikoff called the outlook “cosmetic” at best. At worst, debt write-off could be inflationary, he said, encouraging those with forgiven debts to spend money elsewhere, fueling the startling price hike that prompted the Federal Reserve to raise bonds. interest rate.
But early research shows loan forgiveness could boost borrowers, especially those on low incomes. In a paper 2019, Harvard Business School professor Marco Di Maggio found that when a private lender cut 800,000 college loans following a court order, borrowers’ income increased by $3,000 in three years. Removing that debt has also made them less likely to miss payments on mortgages, credit cards, and medical bills.
“The narrative policymakers use is that people who default on their student loans will default elsewhere. They say it’s like putting water in a bucket with a hole in it,” Di Maggio said. “We found that was not the case.”
More than anything, Forward thinks about what forgiveness could mean for his mother. A fan of Jane Eyre, she raised him in a house in Swampscott covered in books and took out loans for his Boston College tuition. During the 2008 recession, she continued to go into debt.
Her loans have yet to be repaid, and she refuses to tell Forward where the debt stands, let alone let him pay off any of it. The less he owes, the more he could help — “everything my family needed,” Forward said.
Since COVID hit, Connors has halted many of his loan payments, instead letting the money pile up in his bank account. Every once in a while, she puts money toward debt, if only to remind herself that the hiatus won’t last.
“I never want to feel like this money is really mine, because ultimately it won’t be,” Connors said.
Get rid of some of this burden would make simple joys all the sweeter. She often works or studies late into the night, finding quiet times to bake tres leches or confetti cakes for even the most mundane celebrations.
But she might want to go back to school, find a more lucrative career, and increase their income.
“It sounds crazy,” Connors said. “But sometimes necessary. And right.