Around 943,000 people have had their student loans forgiven by the federal government over U.S. President Joe Biden’s term in office, according to a recent report by The Wall Street Journal. However, in some cases, it hasn’t provided the financial security some were hoping for.
According to the report, despite the large number of people’s loans forgiven, many still struggle with other debts and poor credit scores. According to the Education Data Initiative, the average student loan debt in the U.S. is around $38,000 for federal loans and over $40,000 when private loans are included.
Under the Public Service Loan Forgiveness Plan (PSLF), many borrowers saw some or all of their debts wiped away after making the equivalent of 120 qualifying payments while working in public service or nonprofit sectors. According to the Journal, even with relief, many borrowers still find themselves in a debt cycle.
Researchers say that some borrowers opt to replace their student debt with other forms of debt, such as credit cards, auto loans and home loans. In The Journal’s article, a professor who had $90,000 in loans wiped away said the relief was like “taking sandbags off her back,” but said it wasn’t life-changing.
While forgiveness programs are making an impact, borrowers are still navigating a complex financial landscape, beyond just student debt.
