- Biden announced a plan to forgive up to $20,000 in student loans for certain borrowers.
- As a Pell Grant recipient, I will get $20,000 forgiveness on my over $40,000 in total loans.
- In my thirties, fewer years of payments means I can focus on other financial goals.
President Biden announced Aug. 24 that he plans to forgive $10,000 in student loans for many borrowers, and an additional $10,000 for students who received Pell Grants. This means a lot to me: I will save precious time as I get older.
Based on what I paid for my loan balance before the pandemic, it would have taken me four years to pay off that $20,000 (I received Pell Grants), not including daily accrued interest.
As I move into my thirties, time seems more precious every minute. Can my fellow millennials and I afford to waste time that could be spent on other financial decisions?
I took a small amount of loans for my undergraduate
Less than ten years ago, I graduated from UC Berkeley with $13,904 in loans. I owed this relatively small amount through scholarships, Pell Grants, Cal Grants, work-study work, and housing assistance from my parents.
I had gone to college knowing it would be wise to keep that number low, so I applied only to public schools. Berkeley was the natural choice partly because it was a public school. I had wanted to study English and I didn’t want debt to be the reason I followed one career path over another.
I made my first payment four months after graduation and have since faithfully repaid my loans as they come due every month.
The result of this effort? I have paid off a total of $12,796.33 since 2014. Over $3,000 of that is accrued interest. An accomplishment on the one hand, and a drop in the bucket on the other, especially as I would continue to rack up even more student debt.
My master’s degree cost me a lot more
I started graduate school in 2017. It was a low-residency program allowing me to work full-time while I took classes, flew in for residencies, and completed my thesis .
I funded my first semester out of pocket working at a startup in San Francisco. My philosophy on the job had undergone an overhaul: although there were things about the job and my team that I enjoyed, I worked in this position mainly to finance my studies.
But even then, it wasn’t quite sustainable. I started to depend more on loans. I graduated with a total of about $40,000 in student debt. He was, again, relatively small compared to other students today, many of whom face six-figure debt after graduation. But it’s enough to ride a scooter instead of buying a car. No, really, I rode a blue Razor scooter and took it everywhere with me. It was fun, but not highway legal.
What Biden’s announcement means to me
With $20,000 forgiveness, I’m going to save a lot of time. Thanks to this time savings, I can focus on other financial priorities, such as family planning or buying a house.
Without this kind of forgiveness, it would be difficult to make longer-term decisions. Even now it is unclear where to allocate the funds with loans maturing at the end of December, supplemented by a restart in interest rates reaching 9% or more on some loans.
Loan forgiveness will create more time – more time to plan, more time to save, more time to decide what is important both in today’s current landscape and in my future.
This will create a necessary buffer time before other potential life challenges arise, such as supporting my own parents and grandparents.
A large student loan forgiveness can change the course of my life and the lives of many people. It can allow us to free ourselves from these borrowings at a pivotal moment.
This is something that can be difficult to do without.