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Robin Epley is an opinion writer for The Sacramento Bee.
I went to an extremely poor, extremely diverse high school in Sacramento where we were constantly told that going to college was the only way to lift us out of poverty and into the middle class. But the only way to pay the ridiculous cost of community college or state university was to borrow loans so predatory they guaranteed we could never get out of debt.
President Joe Biden’s plan, announced Wednesday, is to forgive up to $20,000 of that debt (or at least $10,000 for most of us). It’s an amazing gift that will change millions of lives forever.
Now let’s undo the rest.
Tuition fees have long outstripped students’ ability to pay, with many schools adding amenities that have nothing to do with education. According to the Pew Research Center, the share of students taking out loans to fund their degrees rose from 49% to 69% between 1993 and 2012. Between 1993 and 2020, the average loan size nearly tripled to over $30,000.
Until very recently, I owed over $35,000 in federal student loans I took out to attend California State University at Chico, even after 10 years of trying to pay them off. The only way I was able to repay those loans was through generational wealth gained through my family’s white privilege.
Before this unexpected windfall, after the untimely death of a relative, I too was stuck in the deepening pit of endless student loan repayments, with a dire credit score and no way out. Paying off my student debt gave me the opportunity to start putting money into my savings account and ultimately buy a house.
That’s because student loan debt — about 90% of which is made up of federal loans, like mine — carries interest rates ranging from 4.99% to 7.54%. This is regardless of work ethic or good or bad choices; student loans are a broken system that actually makes upward mobility much more difficult.
I took out five years of federal loans. The first year, I borrowed about $4,000 and had enough left over for all my textbooks as well. By the time I was in fifth grade, the debt had soared to over $7,000 and would barely cover CSU’s growing tuition.
I had to ask my parents for help with housing because there was nothing left. I left college with about $27,000 in debt, which grew to nearly $45,000 at one point, thanks to interest rates that assured me that I would probably never make a payment on my principal .
At some point shortly after graduation, I calculated that my interest rate was $5 more per day. That’s $1,800 more a year, at a time in my life when I was living paycheck to paycheck. I could barely afford to pay rent and buy groceries at the same time, let alone pay off hundreds of debts each month. The financial stress I was under was a major factor in increasing the anxiety and depression that I still struggle with.
A 2017 study by Prudential Financial Inc. found that 55% of student loan debtors say their debt prevents or forces them to delay saving for emergencies, 42% said they have delayed saving. buying a home because of it and 40% said their debt prevents or forces them to delay buying a home. delay retirement savings. At least a fifth of respondents said they had delayed marriage or having children because of student debt.
I recognize how incredibly lucky I am to have had my student loans paid off, but this is the perfect symbol of what it means to be a middle-class (and often white) student: my family paid them for me. Without this help, I would never have been able to do this, and I would still be drowning in debt and hurting both my credit rating and my mental health.
And while I would have benefited from Biden’s plan, I still want my classmates and others — more than 43 million Americans — to have their loans forgiven.
None of us “did it right” – we just won at a rigged game.
At the very least, we must free students and their families from interest rates so high that they make it impossible to repay the original amount.