Meet a 52-year-old who has struggled to repay their $480,000 in student debt on income-driven plans and has pushed off retirement: 'This is an albatross around my neck for the rest of my life'

• Angel, a 52-year-old student-loan borrower, has $480,000 in student debt.
• Their debt has surged due to payments on income-driven repayment plans and ballooning interest.

For decades, Angel's core focus was making ends meet.

Coming from what they said was a low socioeconomic background, Angel — who requested their last name be withheld for privacy — grew up in the 80s surrounded by the idea that going to college was the key to having a good career and a good life.

Since Angel's parents did not have the means to fund Angel's college education, student loans were the only option — and now, at 52 years old, Angel is looking at a $480,766 student debt load they expect to be stuck with for the rest of their life.

"I was told as a kid that you need to get a college degree, you need to get an advanced degree if you want to get ahead in this world, and now I can't even pursue that American Dream," Angel told Insider. "I can't even buy a house. I'm 52 years old. So, I mean, at what point do we say, 'No, this isn't right?'"

The reason Angel's debt load has surged significantly over the past decades come down to several factors. First, to get a good-paying career, Angel pursued two Master's degrees, but they did not end up actually receiving those degrees until 2012 because they were working simultaneously to save up money. During that time, their student loans from undergraduate school were in deferment, meaning that while they were not actively making payments on their loans, interest was continuing to grow. Angel also said that a customer service representative advised them to stay in school to prolong the deferment period.

And second, once Angel's loans were taken out of deferment, they enrolled in an income-driven repayment (IDR) plan, which is intended to give borrowers affordable monthly payments based on income with the promise of loan forgiveness after at least 20 years. However, as recent reports have revealed, the plans are flawed due to issues tracking borrowers' payment progress, meaning actually getting relief through those plans has been difficult.

President Joe Biden's Education Department recently announced plans to reform IDR, including cutting payments for undergraduate student loans in half and limiting interest growth, and it plans to implement those reforms this year. But it's unclear how those changes will actually play out for borrowers like Angel, and Angel said that up until this point, it's been a challenge.

"I've struggled to find employment that is sufficient enough to even just pay for a roof over my head and pay my rent, pay for food, pay for a car. I don't live an extravagant life, but just the basic necessities of life, and so I've done the income repayment plan for a while," Angel said. "But it's been very confusing and they don't make it easy."

"This is an albatross around my neck"

Just recently, Angel got hired at a government job and they said they're fortunate to finally be in a career where their degrees in communications and marketing can be used. But landing a stable career later in life doesn't help their financial stability significantly now, or in the future.

"So, now at 52 years old, I'm thinking this is an albatross around my neck for the rest of my life because even going into retirement, Social Security, you know, I still may be paying off on these loans," Angel said. "And I know that that's a concern for a lot of people I know with student loans."

"At this point, I don't see myself retiring," Angel added.

Due to their new government role, Angel said they are pursuing the Public Service Loan Forgiveness (PSLF) program, which forgives student debt for government and nonprofit workers after ten years of qualifying payments. The Education Department is planning to implement reforms to that program, as well — and Education Secretary Miguel Cardona has been touting the changes and the impacts they would have on borrowers.

"Our Improvements to the Income Driven Repayment program will save teachers 17K over the first 10 years of their career - even before receiving Public Service Loan Forgiveness.," Cardona wrote on Twitter on Tuesday. "That's a big deal! We are working for you!"

As Angel, and many other student-loan borrowers, have told Insider, interest is a primary reason so many people have surging student loans they cannot stay on top of. For many borrowers in income-driven programs, monthly payments fall below the interest owed on the loan, and that difference gets added onto the loan's principal. That can lead to borrowers owing far more than they originally took out in the first place. The department's proposal would prevent unpaid monthly interest from adding onto a borrower's principal balance as long as they're making their monthly payments — even if that payment is $0 due to their income level.

But a lot of questions remain regarding how effective the changes will be. Congress' recent spending bill did not allocate any additional funding to the Federal Student Aid office, and a senior administration official told reporters on a recent press call that failure to increase funding will present a challenge in carrying out the department's policy priorities.

The task would be made even more difficult alongside Biden's plan to cancel up to $20,000 in student debt for federal borrowers making under $125,000 a year. The plan is currently blocked and headed to the Supreme Court on February 28, and Angel said that the relief would not make a difference for them — but changes to how the student-loan system treats interest would.

"If education is really about us being better contributors to society, then why are they charging interest on the student loans?" Angel said. "At least cancel all of the interest on those student loans. Give people a break."

Story was originally published in January 2023.