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Steven Perry, 58, had $110,000 in student loans forgiven last August.
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It was the result of Biden’s one-time bill adjustments for PSLF and income-driven repayment plans.
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Perry said he wasn’t expecting the relief, but it did provide financial freedom to save for retirement.
Steven Perry, 58, never expected his student loans to be forgiven, even after more than two decades of making payments.
After graduating with a liberal arts degree in the early 1990s, Perry attended college to earn a teaching certificate, and has worked as a teacher and administrator for the past thirty years.
Although Perry took out student loans for both of his degrees, he couldn’t afford payments on his starting salary, so he put his loans on deferment. During this period he did not have to make any payments, but interest still accrued, causing his balance to grow. In 2023, his account showed he owed just over $110,000, according to documents reviewed by Business Insider, which he said was more than he originally borrowed.
“It’s kept me from putting money into savings,” Perry said.
“If I were to have a financial emergency, whether it be a car repair, whether it be a hot water heater exploding, whether it be moving and having to put money down on an apartment for a down payment, any unexpected financial obligations, the first thing I would do would be to put my loan on hold for a short period of time because I need to keep a roof over my head,” he continued. “But the interest is crazy.”
After working in the nonprofit sector throughout his career, Perry applied for the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers after ten years of qualifying payments. But due to a series of paperwork issues, Perry was unable to obtain relief through PSLF, and he put all hopes of debt relief out of his mind.
So imagine his surprise on August 16, 2023, when he received a letter from his student loan servicer, Aidvantage, headlined: “Congratulations! The Biden-Harris Administration has forgiven your federal student loan(s) listed below at Aidvantage in full.”
The relief was due to the Department of Education’s one-time bill adjustments to bring payments up to date for borrowers on PSLF and income-driven repayment plans. Perry said he was not aware of the adjustment before receiving the letter, but that this relief — on top of the PSLF assistance his wife recently received — “opens up a whole new world.”
“My boys will never take out a student loan to go to college. Everything is paid for. Are we rich? No, of course not. My wife is an assistant director and I am a retired assistant director, but now I don’t do that anymore. Don’t worry no worries about crushing the debt,” Perry said. “I was relegated to die with this debt. I mean, that’s where it was, I’d pay the minimum until I dropped dead, and then it’s over.”
The Department of Education has said it plans to complete the bill adjustments in September. So far, thousands of borrowers have been notified that their deposits have been wiped out as a result of the temporary relief. The department is also working on a broader student loan forgiveness plan to replace the one the Supreme Court struck down last summer.
Perry planned to take up substitute teaching to continue supplementing his income during retirement while paying off his student loans. He no longer has to do that – and he’s grateful for the opportunities debt forgiveness has opened up for him.
‘That money goes to the savings bank. It goes towards paying off some other outstanding obligations we have. I think it would be counterproductive to say, “Oh, I have all this extra money now, let’s go spend it.” No, it’s security,” Perry said. “It’s just safety.”
‘A significantly better pension’
Looking back, Perry said the only regret he had about his education was giving up his loans because the interest caused his balance to rise.
But he doesn’t regret taking out a student loan because the debt allowed him to pursue a higher education and enjoy the benefits that came with it.
“My degree allowed me to become an administrator, which came with a significant pay increase and a significantly better pension,” Perry said.
BI previously spoke with Kris Neilson, a 59-year-old who chose to go back to school to get an MBA. Although it came with a lot of student debt, she said she thought it was worth the investment to further her education.
“I’m really happy that I did what I did, even though it’s scary to know what the future holds,” she said.
But that is not always the case. A growing number of Gen Zers don’t seem to see the value of a college degree due to the large student debt that often comes with it, and because many jobs no longer require a college degree, higher education is simply not worth it anymore. for certain fields.
Still, a recent report from Gallup and the Lumina Foundation suggested that the majority of adults see value in a postsecondary degree or diploma. The report found that “adult interest in pursuing some form of higher education is at the highest level” the organizations had ever recorded.
Perry never thought student loan forgiveness would come his way. But now that he has, he can feel safe knowing those monthly payments won’t follow him into retirement.
“The government is meeting its obligations to these public servants and people who have been in repayment for 25 or 30 years,” Perry said. “It’s not a handout, we paid.”
Have your student loans been forgiven? Do you have a different experience with student debt? Share your story with this reporter asheffey@businessinsider.com.
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