A year without student loans: What the past 12 months of halted payments have meant for borrowers across the country

• More than one year ago, the federal government announced relief measures for student loan borrowers.
• Monthly payments were halted and interest rates stopped accruing amid the COVID-19 national emergency.
• Eight borrowers share with Insider what a year without student loan payments has meant for them.

Despite a year of unrelenting hardships, Aliyah Heinze-Giardello, 36, found a bright spot amid the coronavirus pandemic: She was able to wipe out more than half of her credit card debt.

Over the past 12 months, she contributed $6,000 toward her credit card debt, completely paying off a card and a half, a financial win made possible by the $500 leftover in her bank account at the end of each month.

That additional monthly money didn't come from a second source of income, nor was Heinze-Giardello the recipient of a large inheritance. The extra funds were what the project manager typically paid toward her student loans each month - funds that were suddenly freed up thanks to America's year without student loan payments.

In March 2020, the Department of Education announced temporary relief measures for all ED-owned federal student loans amid the burgeoning COVID-19 pandemic. Later that month, the CARES Act suspended student loan payments, stopped collections on defaulted loans, and halted accruing interest rates through September 2020. The measures were extended three more times and are now slated to run through September 2021.

With nearly $60,000 in student loans from an art degree acquired a decade ago, Heinze-Giardello's income-based repayment plan regularly drew about $500 from her bank account each month.

But a year spent redirecting that money toward her credit cards has not only left her in less debt, it has also improved her credit score - a necessary perk as she prepares to buy a house in the near future.

"I've never had an excellent credit score before," she said. "I don't even know what to do with it, but it's nice having that freedom."

Heinze-Giardello is just one of the 44 million Americans who benefited from the Education Departments' year of leniency.

Americans owe over $1.7 trillion in student loan debt spread out across more than 44 million borrowers - an ever-growing amount that has increased more than 100% over the past decade. The average borrower owes $32,731, according to the Federal Reserve, and prior to the moratorium, the average payment was $300.

Insider spoke to eight student loan borrowers across the county, ranging in age from 22 to 45, about what the past year without student loan payments has meant for their survival and success.

Rachel Lancaster, a 33-year-old proposal writer in Jeffersonville, Indiana, said she "heard angels singing Hallelujah" when she found out payments would be temporarily halted on her $63,000 in loans.

"There's less stress for worrying about over-drafting on my bank account," Lancaster said. "I've noticed far fewer incidents of that."

The extra $200 to $300 she saved each month went toward fixing up her home and taking care of her pets, she told Insider. But the additional monthly money was also a saving grace when the pandemic hit close to home and her husband lost his job.

"He was on unemployment making less than what he was making at his position," Lancaster said. "So that would have been highly stressful."

Borrowers told Insider that a year without payments has been like a 'weight off their shoulders.'

For Rachel Bussett, 45, an attorney and small business owner in Oklahoma City, a year without payments has meant more "breathing room" during a difficult year.

"My goal is to die owing Sallie Mae money," said Bussett, who has approximately $140,000 in student loan debt, including Parent Plus loans she's taken out for her daughters' schooling. "And I only say that half-jokingly."

When her husband lost his job in April, the halted loan payments helped the family survive the pandemic.

"Basically what I would have paid in student loans is what he earns post-tax," she said. "We were able to stay afloat because I wasn't having to pay $1,200 or $1,500 a month."

Without the Department of Education's extensions, Bussett said she likely would have had to default on her loans or lay off employees at her business.

Vue Xiong, a 38-year-old estimator in Minnesota with approximately $20,000 in student loans, said he "breathed a sigh of relief" when he found out a hold had been played on payments.

"Holy crap, I can breathe. I can stop for a minute and say 'okay, this month I think I can pay it' or I can take care of this other bill," he said. "

This year has been a game-changer for people trying to pay down the principal on their loans.

Gina Sabia, 29, an elementary school music teacher in Puyallup, Washington, and her husband who is also a teacher, have a combined $70,000 in student debt. Once the couple knew their jobs were safe, Sabia said they decided to keep making their monthly payments despite the reprieve, in order to make a significant dent in their debt.

Without accruing interest rates each month, Sabia said she's been able to knock off nearly $2,000 in principal on her $15,000 over the past year. Her husband has been doing the same.

"It's been incredible," she said. "It feels like we're actually making a difference."

Kelly Tresick, 31, an account executive in Chicago, graduated in 2012 with $29,000 in student loans - an amount she said isn't "actually that bad" - and by the time the pandemic began, she had whittled her debt down to about $5,000.

When payments and interest rates were halted, she said she saw an opportunity. Tresick and her husband created a plan of attack: continue to make their monthly payments to pay down the principal, while also saving as much money as possible in case "the unexpected happened."

Her strategy worked. She's paid $3,500 directly to the principal in the last year, leaving her with only $1,500 in student debt. As soon as the government announces interest rates will be returning, Tresick said she'll take that money she put into savings and apply it to those last remaining dollars.

"We feel good," Tresick said. "We're so close to that finish line."

Xiong, too, said he knows he's been fortunate to be able to make principal payments sporadically over the past 12 months.

"Right now there's no interest accumulating on it. You can knock down a couple hundred a year," Xiong said. "I was very fortunate that I was able to pay here and there. But some people aren't so lucky."

Some have directed the extra money toward paying off other debts in their lives

One 34- year-old borrower, who asked to remain anonymous due to the sensitive nature of her work, is a lawyer with $277,000 in student loans after three degrees and two forbearances. It wasn't until law school that her debt became "astronomical," she said.

Despite her full-time job as a prosecutor, she told Insider she was on the hunt for a second, part-time job before the pandemic began in order to pay off credit card debt she had accumulated while taking the Bar years ago.

But between gas money saved from working at home and extra income saved from no student loan payments, she said she's had an additional $1,000 in her bank account at the end of each month - money she's applied eagerly to her other debts.

Last March, she had $11,000 in credit card debt. One year later, she said that figure is sitting around $4,000.

"The year without payment has allowed me not to have to [get a second job]," she said.

Multiple borrowers said the money they've saved this year has them considering big life steps that once seemed elusive.

Sabia and her husband in Washington state are lucky to already own their home. But the couple is thinking of starting a family soon - a step that Sabia said would require purchasing a bigger home.

"I think paying off student debt is one of the last things I think of when I think of what our future is going to look like," Sabia said. "How many kids can we afford with this payment? Can we afford to buy a bigger house?"

The 34-year-old lawyer, too, said she dreams of one day owning her own home. Paying off more than half of her credit card debt this year has meant she's one step closer to making that dream a reality.

"As far as being a homeowner, did I ever think that was going to be a dream? Maybe when I was 50 or 60. I never thought it might be able to happen in my late 30s or early 40s," she said.

Tresick, in Chicago, and her husband are also in the market for a new house. The pair got married in 2020 and the pause in student loan payments helped the couple put more money toward the wedding, Tresick said. Now, they're eager to pay off the last of their student debt and take the next big step in their lives.

Olivia Nunez, 22, is gearing up for a slightly different next step.

The senior at DePaul University will graduate in May with around $18,000 in student loans. She's already nervous about entering the job market during the pandemic, but the year without interest accruing on her loans, as well as the possibility of another extension of halted payments, has her feeling less overwhelmed as she looks to her future.

"It made me so feel relieved that I can just focus on my studies and devote myself completely to that instead of just job searching," Nunez said.

Up until this month, Lancaster, the proposal writer from Indiana, said she's been taking full advantage of the halted payments, spending the freed-up money on home repairs and saving the rest to try and secure a financial stable future as the couple starts to consider having children.

"Part of the reason we have only pets right now is because financially, with paying our student loans, it's a burden if you plan to have children at any point," Lancaster said. "It can be a burden to people who have to worry about making $200 to $600 payments each month, so that could be a reason why a lot of us are delaying."

But September is looming.

The original student loan relief measures were set to expire at the end of January 2021, but one of President Joe Biden's first acts as President was extending the Department of Education measures again - this time through September 2021.

All eight borrowers lamented the eventual return of monthly payments and irritating interest rates. Most expressed their hopes for another extension or even eventual forgiveness. They all said they've been paying careful attention to the national conversation that has sprung up in recent months about the possibility of wide-scale, federal student loan forgiveness.

"You cannot get ahead," said Bussett. "What if my business hasn't rebounded? What if the kid I got coming out of college isn't able to support herself and I have to help?"

Lancaster, who said she's especially eager for another extension of the relief measures, suggested a simple solution.

"Let's delay it as long as possible," she said. "I think at this rate we keep extending, you might as well let it go...forget they exist."