Too many who are dead set against student loan forgiveness dwell on their own stories — how they worked at a factory in the summer to pay for college tuition, how they scrimped to pay off their debt, how they saved money for their children for college.
I have my own story too — one where I didn’t take out a single college loan in the 1970s or 1980s. My parents, who experienced the Great Depression as children and teens, did not have the luxury of a college education. But they put a premium on sending their two daughters to college. I laughed once when a man I was interviewing implied that I was some kid with a trust fund. Yes, the Bank of Jane and Mitch — two fanatically frugal, generous people who worked dirty union jobs in factories and city parks.
I am incredibly proud of my parents, perhaps even more so than my undergraduate degree from Michigan State University and a Master in Business Administration from Bellarmine University in Louisville. My graduate degree, by the way, was earned at night and on weekends and mostly picked up by my employer. The Bingham family owned the Kentucky newspaper where I worked after I graduated from MSU and the company had an education benefit that I was able to use toward four years of classes, thanks to an extremely talented and encouraging editor.
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So you have my story, a story that is built on the backs and kindness of others. Maybe that’s why I am empathetic toward those who faced absurdly high college costs, costs that soared long after I graduated. I understand the sacrifices others made, including watching my father cleverly remove an entire back seat out of a Chrysler LeBaron to have room to pack up more of my stuff and drive me to East Lansing.
The stories that are far more important than my own, though, are the ones I have been telling for years about parents and college students who face mind-numbing financial burdens after college tuition skyrocketed, families lost jobs and wealth disappeared in the Great Recession in 2008 and 2009 and life turned out to be unpredictable.
“You’re living a life to pay someone back — not do something you desire to do,” Maya Mohammed told me in 2019. She was then 19 and a confused junior at Wayne State who wanted to find a job as an athletic trainer one day. She was fearful then because she ended up taking on way more debt than expected after losing a college scholarship because her grades were too low.
Sharon Stanford told me her story about struggling with the college debt she took on for her daughter.
“I’m never going to get this paid off — and they’re never going to give me a break on this thing,” said Stanford, then 68, and living in an apartment in Southfield. In 2019 when we talked, she owed more than $68,000 for federal student loans, including all the interest that accumulated over many years.
The grandmother didn’t remember how much she initially borrowed for college for her daughter but she maintained it was nothing close to $68,000.
The college debt crisis is kind of like the nation’s retirement crisis — the brochures are great but many people aren’t getting a solid pension or great health care coverage in retirement any more. Not everyone lands a job just weeks after a graduation party — or a job with an annual salary that pays all the bills. Experts suggest that college debt at graduation should end up around as much or less than your first annual salary out of college. Not everyone realizes how quickly college debt will grow as interest builds on unpaid debt.
We’re looking at plenty of cracks in the American Dream.
This past week, I interviewed a teacher who retired a year ago from Plymouth-Canton Community Schools. She taught seventh and eighth grades for 40 years and says she loved every minute from start to finish.
She was incredibly thankful to hear news that some of her Parent PLUS loans for her two children will be forgiven.
Parent debt has increased in recent years because students in bachelor’s degree programs often are running up against the federal student loan limits. Based on the the latest data, which covers the 2017-18 academic year, the average federal Parent PLUS loan debt for bachelor’s degree recipients was $34,929 at graduation, according to Mark Kantrowitz, a student loan expert and author of “How to Appeal for More College Financial Aid.”
He noted that 12.5% of those graduating did so with some Parent PLUS loan debt. The amount owed builds as interest is added on the unpaid debt year after year.
“It’s extremely stressful,” said Roby Jarczewski, 63, of Northville.
Jarczewski took on a great deal of college debt for her daughter, now 33, and her son, now 27, with the plan that two parents could somehow pull it off.
But those plans unraveled after her ex-husband who had helped with college bills for quite some time later became so sick that he had wasn’t able to keep helping. He recently died.
“It’s been on me for a long time,” she said. “It’s a lot more money than I had expected to pay back by myself.”
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Before debt forgiveness, she’s looking at $74,000 in Parent PLUS loans. If up to $10,000 is forgiven total, she’d knock that down to $64,000. She does not believe her children had Pell Grants.
Kantrowitz noted that the forgiveness Parent PLUS loans is per borrower, not per child.
Up to $10,000 in federal student debt will be forgiven if you did not have a Pell Grant while in college. But up to $20,000 in federal student loans can be forgiven if you had a Pell Grant in college.
Income limits apply — an individual’s income must be less than $125,000 or less than $250,000 for married couples to qualify. And most people will need to fill out applications.
You can visit StudentAid.gov/DebtRelief to keep up with what’s likely to be a complex process involving student loan forgiveness.
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All debt isn’t going to be covered for many families, given the limits on income and debt forgiveness. Private student loans, for example, are not covered.
The average student loan debt in metro Detroit was $41,316 as of June 30, according to data from TransUnion. The TransUnion data includes both federal and private student loans.
Many critics of student loan forgiveness, Jarczewski said, don’t realize the enormous amount of money that’s needed to send children to college. Or many don’t understand the impact on single parents, working mothers, those who lost jobs, and those who faced a divorce or death or a significant change in the family dynamic.
“When I was married, this would never have been a big issue,” she said. “But once I became a single mom, that became an enormous issue.”
“The fact is everybody’s situation is different,” she said. “My daughter wanted forensic (science) and the only place that had that was Madonna; so private school, private education.”
“Folks say ‘Well, we saved,’ ” Jarczewski said. “The ‘we’ is the critical word in there, the ‘we.’ There’s two of you.”
“That’s the part that people don’t understand. Your family dynamic can change over the course of this whole process.”
“Fortunately, my kids were able to find jobs that they both can make money on. But for my daughter it took several years.”
Her daughter works in pathology at a hospital.
Her son is a mechanical engineer. Both remain in Michigan. Both have student loans, as well.
Just five years ago, Jarczewski was overwhelmed by mounting credit card debt, debt that built up as she tried to cover college loans, medical bills, and other bills. She turned to GreenPath Financial Wellness in early 2018 to work out a debt management plan and get some interest rates lowered.
She cut back on expenses, picked up extra jobs at school including working in the summer as the financial burdens got heavier, and most recently, strategically used the pandemic-related payment pause on most federal student loans that went into place in March 2020 to tackle her high-cost credit card debt.
She maintains that she’s going to be able to pay down the remaining student loan debt, even after forgiveness, because she paid off other bills. She had been dealing with a student loan payment that amounted to around $500 a month but that would go down somewhat as debt is forgiven. The payment pause, set to expire Sept. 1, was extended and now will end Dec. 31.
The student debt burden on retirees is larger than many might realize. The average student loan balance nationwide for borrowers age 65 and older was $37,549 as of June 30, according to TransUnion data. The average student loan balance was $47,154 for those in the 50 to 64 year old group; it was $26,807 for those 29 and younger.
Jarczewski admitted she was nervous about telling her story, knowing that people can be judgmental about money. But she knows she put in a lot of hard work to pay off $72,000 in credit card debt. It’s all paid off. And she knows that her strategy to work through GreenPath to pay off her bills “completely saved my sanity.” The teacher in her wants to share her story to help others find a way out of a jam.
Everybody’s story is different in this student loan saga. For many, debt forgiveness is an key part of the puzzle for giving family finances a fighting chance.
Contact Susan Tompor:
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