Students of color explain why they took out student loans and how it affects them now and in the future
Anxiety is one of the many names that come to mind for those who have taken out student loans to pay for their education. According to the Education Data Initiative, 43.4 million borrowers have federal student loan debt.
Those who have taken out loans face extreme anxiety and stress when thinking about repaying them. At the start of the pandemic, many people lost their jobs and could not meet the repayment of their loans. For this reason, the federal student loan payment moratorium began in March 2020 after Congress passed the Care Act. The moratorium also kept interest rates at 0.
On April 5, 2022, President Biden extended the moratorium until August 2022, which brought relief to those who have since graduated and started repaying their loans, but it also caused stress for those currently enrolled in school and have to pay their loans back.
Mazel Genfi, 25, who is a content analyst at A&E Networks, borrowed $25,000 in student loans for her undergraduate degree from Quinnipiac University, where she majored in communications. After graduating in 2018, the thought of having to repay her loans worried her as she comes from a low socio-economic background and knew she would not receive any help to repay her loans.
“I was making less than $30,000 a year, so I was barely making ends meet, and on top of that I had to pay student loans every month,” Genfi said of his first job in 2018. “Now that my income has increased over time, I still worry about when student loan repayments will continue and what it will look like on a day-to-day basis.
Genfi isn’t the only college graduate to worry about her student loans. Daniella Vasquez, a 23-year-old graduate student, must repay more than $200,000 in private and federal student loans once she completes her graduate program at NYU.
She says that attending NYU was a risk and a reward because of the program she attends, but also that the cost to attend NYU is high and she has not received much financial assistance from NYU. In fact, not everyone around her was enthusiastic about her going to graduate school due to the expensive tuition fees.
NYU only gave Vasquez $10,000 in scholarships, or $5,000 per year and $2,500 per semester. This is what she received while pursuing her undergraduate studies at Syracuse and was shocked to have received the same amount of money.
Vasquez took out $80,000 in federal student loans to cover college tuition and living expenses. She recently got her dream internship at the United Nations, but she’s stressed when she thinks about the summer and the upcoming fall semester because her internship is unpaid.
And although she is TA for NYU’s School of Engineering, she would have to file a petition with the UN to be able to continue teaching while completing a full-time internship. The thought of having no income the semester before graduation is mortifying, she said.
Since Vasquez is still in school, the break on loans doesn’t directly affect her, but sarcastically, she says, she appreciates the idea that President Biden thinks this break will ease student anxiety about loans.
“The reason (anxiety) exists is because you’re nervous about the future or the past,” Vasquez said. “Anxiety does not exist in the present. It’s an oxymoron, and it also makes anxiety worse. I don’t understand.” She said
According to Pewtrust, given the large proportion of students struggling to repay their loans even before COVID-19 hit, changes in student loan levels as a result of the pandemic could have implications for the well-being. -future financial being of the borrowers.
Another graduate student, Aiyana Cord, who attends NYU’s Global Affairs program with a concentration in human rights and international law, is constantly worried about what will happen if she can’t pay off her student loans after graduating.
“I have to pay all my bills early, I can’t be late on anything,” Cord said. “I can’t have bad ticks on my credit or the government will come and get me. I don’t want anyone to come and take anything from me because I haven’t paid my student loans. It’s a real fear for me one day,” she said.
After graduation, Cord will have to repay $90,000 in federal student loans. The money she owes in loans will be a key determinant of the types of jobs she applies for.
“‘I’m definitely going to ask for a lot of money and keep eating ramen noodles to make sure I’m able to cut student loans,'” she said.
Cord’s dream is to be a human rights lawyer in a non-profit organization, however, she knows that after attending law school she will not be able to start practicing this type of law due to the amount of his debt. Cord says she will most likely have to start in corporate law.
Others say that since graduating from undergraduate college, not having to repay their loans has allowed them to accumulate savings and more.
Wesley Marsh, 24, a Morgan State University alum, took out $35,000 in student loans. But since the moratorium on loan repayments came into force, he need not worry about the burden of repaying them now.
“Instead of having to pay hundreds of dollars to fund the loan, it’s money I could either spend on my savings or on myself or another bill,” Marsh said.
Genfi was also able to achieve financial goals like leaving her family home and getting her own apartment in Brooklyn.
Even though the moratorium on loan repayments has been helpful for some in the sense that they have more financial freedom, the wage gap between blacks and whites is getting worse, especially as the indebtedness of black communities is increasing according to Brookings.edu.
Adam Looney, nonresident senior fellow at Brookings and executive director of the University of Utah’s Marriner S. Eccles Institute, said the loan repayment moratorium is making the wealth gap worse.
“The people getting the break are higher-income borrowers who would have paid off their loans,” Looney said. “The main finding of the federal student loan repayment moratorium is that it works in favor of borrowers who have the income to repay their loans.”