Update, Oct. 14 The U.S. Department of Education began beta testing its student loan forgiveness application Friday night. The official launch date has yet to be announced, but if you submit an application now, it will be processed, and you won’t need to resubmit, according to its website.
Original story, Aug. 26 President Biden announced plans this week to cancel $10,000 in student loan debt. People earning less than $125,000 per year will qualify.
Calculate how much of your student loan debt can be forgiven using the Washington Post’s tool. Sign up to be notified about how you can claim debt relief on the Department of Education website.
Pell Grant recipients, who make up a quarter of undergraduates at UC Berkeley, are eligible for an additional $10,000 in forgiveness.
Federal student loan repayments have also been extended through the end of 2022. Borrowers will need to fill out a yet-to-be released form on StudentAid.gov. Debt held by private lenders does not qualify.
All around the city, Berkeley residents saddled with student loans celebrated, though for many, the relief was a drop in the bucket. Five Berkeley students, workers and residents shared what the plan means to them.
Aaron Hill: ‘College costs have become broken’
UC Berkeley senior Aaron Hill woke up on Tuesday, the first day of fall semester, to learn that he would likely finish his undergraduate degree with just $138 of student debt.
For the 21-year-old history major and former Berkeley Political Review editor-in-chief, the news didn’t exactly come as a total surprise — he’d been tracking the news — but it came as a relief.
Hill is one of the Pell Grant recipients who will be eligible for $20,000 in loan forgiveness, a sum he said will free up money for him to fulfill his goal of attending law school after two years of working as a teacher.
The combination of the Pell Grant, merit-based scholarships, and his ability to stay at home with his parents in Forest Falls for the duration of remote learning have all contributed to the affordability of his education.
But while Hill said the plan is a step in the right direction, he sees debt relief as a Band-Aid solution and regressive policy.
“The benefits primarily accrue to middle-class people, while some lower-class people who didn’t attend college are left out,” he said. “College costs have become broken in the United States…Hopefully, as time goes on, we can see lasting changes that make it so we’re not accruing debt like this.”
— Iris Kwok
Eric Loucks: $10,000 is just a fraction of my student debt
Eric Loucks, 33, a wood craftsman in the UC Berkeley College of Environmental Design’s architecture department’s fabrication shop, makes $36 per hour when school is in session.
He received his MFA from the Rhode Island School of Design in 2021, and has around $65,000 in debt.
“I was really hoping for the $50,000 debt forgiveness [urged by high-profile Democrats like Elizabeth Warren], even though that was probably a stretch,” Loucks said.
Loucks said he’s not sure if the $10,000 reduction will make a tangible difference.
“In theory, it’ll be sooner that I’ll be done with them, but I don’t think it’s going to make the payment feel smaller,” Loucks said. “But I haven’t done any research. To be honest, I’ve been putting it off until I have to face it.”
More than anything, Loucks said, the Biden announcement is a reminder that he needs to make some calls and find out how long he’ll be paying back his student debt for once the loan freeze expires at the end of 2022.
— Iris Kwok
Courtney Bither: We weren’t told about community college
Courtney Bither, a third-year Ph.D. candidate in history at UC Berkeley who grew up in rural Oregon, said she came to UC Berkeley “despite the finances.”
After finishing a master’s degree in history at Harvard University, the 27-year-old had already racked up a significant sum of credit card debt and student loans, and didn’t know if she was ready to risk it again and live in an area where the cost of living is skyrocketing.
To make ends meet, she works 40 hours a week — 20 as a graduate student instructor at UC Berkeley and 20 as a remote staff assistant — on top of being a full-time student. “I’m not the only one in my cohort who has to take on extra work to kind of make a living out here work,” she said.
She said the loan forgiveness plan means that roughly two-thirds of her debt will be forgiven: reducing the amount of debt from $15,000 to $5,000.
“It makes things a lot easier for me,” Bither said. “It makes it less scary to graduate out of the program.” Her loans are in deferral while she’s a student, so she is responsible for paying off the interest — roughly $100 a month. But her Ph.D. stipend is $30,000 a year before taxes, and even $100 monthly is “a lot to pay off.”
Bither said her experience as a first-generation college student and the financial aid application process has made her keenly aware of the disadvantages students face. “It’s dependent on what kind of guidance counselors you have or if your parents went to college,” Bither said. “It’s a costly thing to leave up to chance.”
Her younger sister, despite attending a state school, has more than $70,000 in student debt, and while the $10,000 certainly helps, it’s just a fraction of the total cost.
“We really wish someone would have told us about options with community college,” Bither said. “When you’re 18, the numbers don’t really mean anything. They don’t mean something in the same way as they do when you’re looking at paying it off.”
— Iris Kwok
Yevgeniy Melguy: ‘It’s a huge relief to not have this hanging over my head’
Yevgeniy Melguy, a Ph.D. student at UC Berkeley in linguistics, graduated from Reed College in 2015 with just over $10,000 in debt, a combination of Pell grants and other federal loans. He quickly paid off a couple thousand dollars of debt, but since enrolling in grad school, he had to put paying the rest of his student loans on the back burner.
Almost immediately after enrolling at Cal, Melguy blew through his savings due to surprise medical bills and the sky-high cost of rent. There was no room for student loan payments in his budget.
“I really had to buckle down and be even more frugal than I am,” said Melguy, whose Belarussian immigrant parents taught him to save, not spend from a young age. “I was economizing on every little thing. And it was still impossible to save any money for a couple of years.”
It was only when he got into the UC Berkeley co-ops — and his rent and food expenses were cut in half — that he had a little breathing room. But now that Melguy had begun applying to post-doctoral positions, the debt had begun to loom again. The jobs offered meager salaries, including one in Spain that would pay him 25,000 Euros a year.
With Biden’s announcement, Melguy expects the rest of his debt will disappear. “I’m very fortunate. For me, it’s a huge relief to not have this hanging over my head, as I’m contemplating being in another financially precarious work position.”
— Ally Markovich
Carli Oxenham: Debt changes how she hangs out with her friends
On Wednesday afternoon, UC Berkeley junior and molecular cellular biology major Carli Oxenham, 20, sat at a table outside Latimer Hall after attending her fourth class of the day, frowning at her phone screen.
“It’s been a lot,” she said, refreshing her browser. She had received a push notification about the announcement, but couldn’t find out how much she would qualify for because “the Wi-Fi has not been working all day.” “I can’t even use a hotspot,” she said.
Oxenham said she has $3,500 in debt from living in the campus dorms during her freshman year. While she didn’t want to graduate with any student debt at all, she granted herself an exception and took out a loan to live in the dorms so that she could “really focus on adjusting to Berkeley.” She moved back home to Long Beach during remote learning and now lives off-campus to save money.
Currently, her tuition is covered by scholarships — both recurring ones from high school and from UC Berkeley — as well as a campus job at the Clark Kerr Preschool, where she cleans, prepares food, and occasionally teaches science.
She said she’s been careful about saving the money she gets through scholarships to ensure she can pay it off before she graduates. “It changes how I hang out with my friends somewhat,” Oxenham said, adding that she sometimes sees her friends going on big trips and attending music festivals like Outside Lands, which cost hundreds of dollars.
“I’m, like, ‘I would much rather that go into savings,’” Oxenham said. “Go, you guys, have fun.”
— Iris Kwok