That $10K+ Of Canceled Student Debt Means These Former Students Can Follow Their Dreams

If you were already beginning to sweat thinking about your student loan payments resuming on Sept. 1 for the first time in two years, you may be wiping your brow and breathing a sigh of relief. On Aug. 24, President Joe Biden announced that the moratorium will now be extended for the fifth time, and will continue until Dec. 31. But the thing that makes this pause on repayments, interest, and collections even bigger? This time, it includes debt cancellation.

On Wednesday, the Biden administration announced that borrowers with federal loans who make less than $125,000 a year can get up to $10,000 of their student debt canceled. For people who got Pell Grants, that number is doubled, to $20,000. It’s an amount that just lightens the load for some — but for many, it’s a dream come true.

The cancellation follows almost two years of paused student loan payments, which began in March 2020 due to the coronavirus pandemic. It also fulfills one of Biden’s major campaign promises on the 2020 election trail: that he would cancel a “minimum” of $10,000 of student debt per person. While many are calling for Biden to cancel even more student debt (or even all of it), there’s no denying this is a huge move.

So, what have college graduates done with the additional time without loan payments? And what will they do now that they’re gone forever? Elite Daily followed up with 20-somethings struggling with student loan debt to find out. Based on their responses, it’s clear that today’s student loan relief announcement changed their lives forever.

The following interviews have been edited for length and clarity.

Sheri, 22, Iowa

Monthly Loan Payment: $500

When President Biden announced that $10,000 of my college loans would be forgiven, my first honest thoughts were, “I’m going on a trip!” because I’m now completely debt-free! For the past four months, I’ve spent so much time working to find programs through my job that would help me repay my loans. But now I can think of other priorities, like utilizing those funds towards my Master’s degree and further professional development. This $10,000 pays off 50% of my boyfriend’s student loans as well, and without that burden, we will put our money together to move into a bigger apartment where I can have my own office.

Jelani, 24, New York

Monthly loan payment: $100

This $10,000 forgiveness in student loans pays off the remainder of my federal student loans, and frees me to focus on paying off the rest of my private loans. When I spoke to you in May 2022, I had gotten to a financial space where I’d saved enough money to quit a job that I was no longer passionate about. Now, after another four months without loan payments, I’ve been able to make a jump into a higher-paying position at a company where I feel I can actually make a difference in the lives of people that I care the most about. I also had the opportunity to travel back home to Michigan to see my dad get married, and to move into a nicer apartment than the one I was living in last year.

Candace, 27, Minnesota

Monthly loan payment: $200

As an elementary school teacher, the forgiveness of $10,000 in my student loans makes a huge difference in my life. This plan of relief now leaves me with only owing $20,000 in student loans. Having a little extra time over the past four months to not think about making those payments allowed me to focus more on paying off my credit card debt. I was able to save and pay just under $2,000 of my original goal. This summer, having a little less debt allowed me to enjoy my life and participate as a bridesmaid in three weddings.

Ananda, 23, New York

Monthly Loan Payment: $200

Today's decision wipes out a large amount of my debt. But it’s only a fraction of what I owe, so I won’t be completely debt-free. But even still, it means a lot as someone pursuing a career in the film industry, where employment isn’t always guaranteed.

When student loan payments were paused for the fourth time, I made the decision to move to New York City to pursue my career as a filmmaker. Now, four months and another delay in payments later, I’ve been able to move into my own apartment in Brooklyn, and take on a freelance production assistant position without the extra pressure of having to repay my debt. I’m looking forward to not making these payments, even if it’s not forever.

Tyshaia, 24, New York

Monthly Loan Payments: $330

This decision doesn’t quite free me from the debt of student loans, but it does put me in a more comfortable situation that would allow me to make a large step toward my goal of being student loan debt-free by the end of 2024. Over the last four months, I’ve been able to sustain myself with freelance work in fashion and media after quitting my job without the pressure of another bill. During that pause, I was able to work on figuring out what I want to do full time, upgrade my housing, and travel to one of my dream destinations — the south of France.

Kwame, 26, Illinois

Monthly Loan Payment: $500

During the past four months that student loan payments have been paused, I was able to drive down the principal balance of my student loans, and I’m closer to Public Service Loan Forgiveness because of it. President Biden’s decision to cancel $20,000 of my public loans slashes my public debt in half and reduces my total debt by one-fifth. This relief will improve my credit, and ease the pressure I often feel to work high-paying jobs that I'm not interested in.

Lateef, 30, New York

Monthly Loan Payment: $300

I would love it if I qualified for the loan cancellation program. However, my current income exceeds the requirement to qualify. But I get it, and I am really happy about what this is going to do for a lot of people. I also appreciate that having a few extra months of not repaying my current loans gave me the ability to set new financial goals, and possibly achieve them. During the past two years without the burden of student loan payments, I paid off $15,000 in credit card debt, and moved into a new apartment. The four months without payments from May through August have allowed me the flexibility to focus on other things. Being able to set aside that additional expense during a time of inflation and rising living costs, especially in New York City, has made a big difference in my life.