The High Cost of Higher Education: A Generation Grapples with Student Loan Debt

Millions of Americans faced a renewed financial challenge in October of last year: the resumption of federal student loan repayments. After a three-year pause implemented during the pandemic, borrowers were once again required to make monthly payments, often amounting to hundreds of dollars. This triggered a wave of adjustments, as individuals across the country scrambled to adapt their budgets, take on extra work, and explore options to manage their debt.

The impact on individual lives is profound. Consider the experiences of Megan McClelland, a 38-year-old counselor at Petaluma High School in California. During the payment suspension, McClelland, like many others, was able to make significant progress on other financial goals. She paid off her car loan and, for the first time in her adult life, managed to build savings. However, with the restart of student loan payments, that financial stability was threatened.

McClelland's student loan debt is substantial: approximately $38,000. This figure reflects a combination of loans taken out for both her undergraduate and master's degrees. She originally borrowed $10,000 for her undergraduate studies and $40,000 for her master's in counseling at Sonoma State University. To manage the added expense of her student loan payments, which are estimated at around $505 monthly ($235 previously allocated to her car payment, plus an additional $270), McClelland planned to reduce her spending and take on additional work. She envisioned cutting back on dining out and actively seeking part-time employment opportunities.

“It had been a huge relief the past few years to not have that financial burden,” she reflected. “In the coming months, I’m looking to see where I can scale back in my budget. Probably less going out to eat, and more picking up side gigs.”

McClelland's situation is far from unique. Justin Cole, a 35-year-old from Little Rock, Arkansas, faced a similar predicament. He had approximately $19,000 in student loan debt, incurred more than a decade ago, and estimated his monthly payments at $166. Cole, who works in the front office of a medical practice, expressed considerable anxiety about meeting this financial obligation.

“I’m already in a mountain of debt,” he explained, “and while I just got a raise at work, it doesn’t go into effect until we’re full staffed at my family practice clinic.” Adding to his financial strain, Cole also carries medical debt stemming from a car accident that occurred early in the pandemic. He openly admitted that loan forgiveness would provide immense relief, allowing him to focus on improving his credit and finally saving money.

“If those loans were forgiven, I could finally work on getting my credit up and actually saving money for once,” he said. “If they were forgiven out of the blue, I’d be ecstatic.”

Unfortunately, the hopes of many borrowers, including McClelland and Cole, were dashed last July when the Supreme Court rejected the Biden administration's plan to eliminate $400 billion in student loan debt. This decision left millions grappling with the immediate and long-term consequences of their student loans.

Navigating the Maze of Student Loan Relief

While the Supreme Court's decision significantly impacted the landscape of student loan forgiveness, several avenues for relief remain available to eligible borrowers. One significant option is the Public Service Loan Forgiveness (PSLF) program. This program offers loan forgiveness to borrowers who work in public service for a specified period and meet certain eligibility criteria.

Following the Supreme Court's ruling, the White House announced its intention to utilize the Higher Education Act to expand loan cancellation opportunities. This involved a process called “negotiated rule-making,” designed to establish detailed guidelines for the new plan. The details of this plan are still under development, but it represents a potential pathway to relief for many borrowers.

Beyond the PSLF program and the forthcoming plan based on the Higher Education Act, additional avenues for loan relief or forgiveness exist. These include:

• False certification: If a borrower can demonstrate that they were misled or provided inaccurate information about their loan terms or eligibility, they may be eligible for discharge.

• Borrower defense to repayment: This allows borrowers to seek loan discharge if they can prove that their institution engaged in deceptive or fraudulent practices.

• Closed school discharge: This applies to borrowers who attended an institution that closed while they were enrolled or shortly after.

• Total and permanent disability discharge: Borrowers with a documented total and permanent disability may qualify for loan forgiveness.

• Income-driven repayment (IDR) plans: These plans adjust monthly payments based on the borrower's income and family size, making them more manageable for those facing financial hardship. Several different IDR plans exist, offering various repayment timelines and forgiveness options.

Megan McClelland, deeply impacted by her own experience with student loan debt, now dedicates significant time to counseling high school students. She emphasizes the importance of financial planning and shares her story as a cautionary tale.

"I had no financial guidance when I was younger, from my own parents or from school,” she said. “I didn’t ever understand the long-term impact.”

Her message to students is clear and direct: "I tell kids all the time, openly, ‘As someone who was once in your shoes, I highly recommend finding a way to avoid taking out loans.’ When you’re 17 or 18 years old, you think, ‘Oh, sure, I’ll figure this out.’ Then it’s frustrating to still be in this financial situation.” McClelland's journey, along with that of countless others burdened by student loan debt, underscores the urgent need for greater financial literacy among young people and a more comprehensive approach to addressing the systemic challenges of higher education affordability.

The stories of McClelland and Cole represent a widespread experience for millions of Americans. The weight of student loan debt extends far beyond the individual; it affects family finances, career choices, and long-term financial stability. While some avenues for relief exist, the complexities of the system often leave borrowers feeling overwhelmed and uncertain about their options. The ongoing debate surrounding student loan forgiveness highlights the deep-seated societal challenges inherent in the escalating cost of higher education and the need for reforms that prioritize accessibility and affordability for all students. The experiences of individuals like Megan McClelland and Justin Cole serve as a stark reminder of the profound consequences of a system that leaves many graduates burdened with significant debt, facing a daunting struggle for financial security.