A recent survey has revealed that 40% of student loan borrowers report that their loans have severely compromised their ability to meet essential needs, including food, housing, and transportation. This financial strain becomes particularly pronounced during the holiday season, a time typically characterized by joy and generosity.
Take the story of Ben L, a 36-year-old professional who seemingly should not be facing financial hardship. Having earned degrees from both Georgetown University and Columbia University, he currently works in a biotech company with a six-figure salary. Despite this, he is burdened by $95,000 in private student loans from his master’s program and significant credit card debt, a situation that forces him to forgo even basic pleasures, such as travel or gift-giving during the festive period.
Ben explained, “I have never once used all of my vacation days because I cannot afford to go anywhere.” His monthly student loan repayment alone is about $1,850, and with rent for his one-bedroom apartment in Hell’s Kitchen and other expenses, he finds himself living paycheck to paycheck. “I essentially live fine, I eat enough, and I’m fine – but there’s literally no extra for anything,” he lamented.
Ben’s experience is echoed by many. The survey conducted by the Institute for College Access & Success (TICAS) and Data for Progress found that over one-third of respondents indicate their loans adversely impact their ability to pay for healthcare, while more than half struggle to save for retirement. Troublingly, 45% state their debt has hampered their housing plans. Michele Zampini of TICAS commented on the alarming trend, stating, “The most concerning thing for me is the percentage of borrowers that report making trade-offs between covering basic needs and making student loan payments. It suggests that the safeguards in the repayment system are not effectively protecting borrowers.”
Recent policy changes may exacerbate these challenges. The Trump administration has announced it will discontinue the Biden-era student loan repayment program known as Save, which aimed to alleviate financial burdens for borrowers. This program was designed to significantly reduce monthly payments and provide earlier forgiveness for low-balance borrowers, but the administration views it as an overreach of federal authority.
This policy reversal is causing distress among borrowers. Erin O, a 31-year-old working in the non-profit sector, is one of those affected. Currently enrolled in the Save program, she fears her payments could nearly double or even triple if the program is terminated. Additionally, she participates in the Public Service Loan Forgiveness program, facing uncertainty as the administration looks to restrict eligible organizations based on ideological criteria.
Erin’s loans have been in forbearance due to ongoing litigation regarding the Save plan, but she is preparing to resume payments on her $34,680 federal loan debt. This holiday season, her family has decided on a “lean Christmas,” agreeing to limit gift exchanges to immediate family and close friends in recognition of their financial realities.
The plight of borrowers like Ben and Erin highlights the pressing need for a sustainable and supportive repayment framework, particularly as they approach the holidays—a time traditionally associated with abundance and goodwill. These hardships serve as a reminder of the broader implications of student debt on individual lives and family dynamics, a concern that many may not think about during this festive time.