Quick Take:
Last week, President Joe Biden announced plans for a student loan forgiveness plan that would forgive $10,000 in federal student loan debt for people who make less than $125,000, and additional support for those who have received Pell Grants. The plan includes more support for students from lower-income backgrounds. Two UC Santa Cruz alumni share their reactions and how it will affect them.
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Recent UC Santa Cruz graduates Joshua Solis and Marlen Reyes are relieved.
When the friends heard last week about the Biden administration’s plan to forgive up to $20,000 in student loans, they also began to think about how they could plan their lives differently.
“This is a starting point for me,” said Solis, who has about $19,000 in student loan debt.
Because the administration’s plan includes forgiveness of up to $20,000 to students who received a Pell Grant — which he did — that $19,000 in debt could be forgiven.
Solis and Reyes are among the country’s 45 million student loan borrowers who owe the stunning total of $1.6 trillion in federal student loan debt. In California, almost 4 million student borrowers owe a total of $141.8 billion, according to the Education Data Initiative. On average, those Californians owe $37,084 in student loans.
Citing these numbers, the Biden administration said the skyrocketing costs of college have led borrowers to take out larger and larger loans, preventing them from building wealth. Rather than investing in buying a home or starting a business, borrowers with tens of thousands of dollars of debt are often cut off from those opportunities.
To relieve that burden and the impacts of the pandemic, President Joe Biden announced Wednesday that his administration will forgive $10,000 for people with federal student loans who make less than $125,000 and up to $20,000 in relief to people who also make under that amount and received a Pell Grant. He also extended the pause on student loan repayment through Dec. 31.
For Reyes, who graduated this spring from UCSC with a major in sociology with about $2,000 in student loan debt, the news alleviates concerns she had about pursuing more schooling.
“I feel relieved that I could save that money for myself and use it for my future — maybe for grad school,” she said. “So it’s definitely a big relief. I’m using it to plan ahead.”
Reyes also received a Pell Grant, among other funding sources, to finance her three years of studying at UCSC. Under Biden’s plan, her $2,000 in student loan debt will also be wiped clean.
Solis, a 2020 graduate in sociology, and Reyes are both working in local, community-oriented programs. Solis is the program coordinator for UCSC’s Underground Scholars program, which provides support to transfer students and students who experienced homelessness or abuse, or were affected by the carceral system, among other challenges. Reyes is a community organizer at Cradle To Career, providing support to students and families in the Live Oak School District.
When Solis first heard the news Wednesday, he said he was in “disbelief.”
“Then I think I was excited about the possibilities,” he said. “And what was to come next and how this was going to support me in trying to establish a foundation for myself.”
He was concerned about being able to pay off the debt and at the same time trying to buy a house.
“I feel like now, I’m in a position where if this does go through, that I may have a chance at buying a home sooner and establishing myself and establishing a family,” he said. “I feel good.”