Jared Barnett breathes a sigh of relief. The Oakland University graduate is among millions who will see some or all of their student debt forgiven after a new plan was unveiled by the White House on Wednesday.
Barnett entered Oakland University as a transfer student from Oakland Community College through Pontiac High School to pursue a sociology major at the College of Arts and Sciences. He graduated in December 2021 and found a job as a community health worker.
He also had to start repaying $22,984 in student loans and grants. Barnett still doesn’t know how much of his debt will be cleared, but knows he’s on track to have almost all of it cancelled.
“I’m still figuring it out. It’s so new that I’m still trying to figure it out, but the FAFSA (Free Application for Federal Student Aid) crashed because everyone else is trying to figure it out too,” he said. . “I’m still trying to navigate the process and figure out how much it will cost.”
Barnett said he was making payments of $300 a month and was now looking to invest that money in something else.
“To have a clean slate and start working for your career and start investing that money in yourself instead of making those payments every month is huge,” he said. “To have that pressure taken away from you means a lot.”
According to the White House, total student debt is $1.6 trillion and growing for more than 45 million borrowers.
Federal borrowers who earn less than $125,000 a year, or $250,000 a year if married, and who received Pell Grants as part of their financial assistance can get up to $20,000 in loan forgiveness. federal student loan.
Only loans initiated before July 1 are eligible and loans initiated and held by private lenders are not eligible.
Another part of the plan is to extend the pause on outstanding student loans until December 31. The pause, which suspended all payments and accrued interest on federal student loans held by the government since March 2020, was scheduled to end on August 31.
Barnett is like millions of college graduates trying to pay off their loans after finding their first job.
“Most students start out in the red and are in debt before they can find a competitive salary to start working,” he said. “Before you even have a career, you have this stress of being in debt.”
He admitted that other students in the area are going through the same type of situation and that this plan could make life much easier.
“It’s one of those things you hope is possible, but making it happen is just a huge weight on the shoulders of a lot of students,”
Barnett said he envisions a different financial future and is ready to forget about the stress of loan repayments.
“Imagine the first month or two after graduation and you still haven’t received a job offer and the payment companies are knocking on your door,” Barnett said. “It’s a great time when you graduate and graduate, but it’s a tough time when you realize you need to start making payments and you don’t have a financial plan ready for it. to face.”