- Biden announced up to $20,000 in student-loan forgiveness for some federal borrowers.
- Nick Garcia, 42, will qualify, but he's disappointed Biden didn't take the relief further.
Nick Garcia is one of the millions of Americans getting President Joe Biden's student-loan forgiveness — and while many are celebrating the announcement, it's complicated for him.
A 42-year-old college professor on the East Coast, Garcia has three young children to support with his wife. The student-loan payment pause has been instrumental in helping them save and pay off other forms of debt. Following Biden's announcement that he is canceling up to $10,000 in student debt for federal borrowers making under $125,000 a year, Garcia was certainly glad that his $39,000 balance was decreasing, but with years of repayment still to go, he was disappointed Biden chose to stop there.
"I feel disheartened because it shows that more can be done at the executive level," Garcia told Insider. "Although I'm glad to see action from Biden that will improve the lives of millions, I don't know that it rises to the moment. It just doesn't resolve our debt crisis."
The pause on student-loan payments, Garcia said, has been much more important to him than broad student-loan forgiveness. Biden has extended that pause five times so far while in office. He said that the most recent extension through December 31 will be the "final" one, meaning federal borrowers have to start paying off their debt again in the new year. With over 200 payments to go, the looming $400 monthly payments Garcia will face means he will have to think about cutting back on necessities while supporting his family.
"It has a real impact on stress, on mental health. It's hard not to let that bother you and get you down," Garcia said. "Having $400 a month virtually waived for the last couple of years meant a lot, especially with paying down other debts and planning for the arrival of our baby."
The student-loan payment pause 'meant so much to our family'
Not having to worry about monthly student-loan payments — coupled with the pandemic stimulus checks — allowed Garcia's household "to make great strides to improve our lives," from paying down personal debts to making needed repairs to his home. That will all go away in six months.
"My debt will be reduced, but everything shaping my household budget, the impact on our debt-to-income ratio, our ability to keep up with new expenses, and the mental toll of carrying this debt? None of that will go away," Garcia said.
Biden's administration has frequently touted the financial impact the payment pause has had on federal borrowers, with the Federal Reserve Bank of New York estimating it has saved borrowers $200 billion since the pandemic began. As Biden said during remarks announcing loan forgiveness, though: "I'm extending to December 31st, 2022, and it's going to end at that time. It's time for the payments to resume."
The White House has said that the idea of implementing student-loan relief around the same time as payments resume should have a neutral impact on inflation. That hasn't stopped Republican lawmakers from calling for payments to resume as soon as possible, even introducing legislation in prior months to end the student-loan payment pause.
While Biden is planning to introduce a new income-driven repayment plan intended to make monthly payments more affordable, it's unclear when exactly it will be implemented and Garcia is preparing to face his new financial outlook come January.
"Having hundreds of dollars committed to debt each month has persistently shaped where we can live, whether needed repairs have to be put off, and day-to-day stress," Garcia said. "There is a mental toll of this decades-long debt that is hard to convey, but it is devastating."
'I worry it sends a message that the fight is over'
With Biden framing his student-loan forgiveness as "one-time" relief, Garcia said the students he teach "feel like they're in a losing position" because of the debt they are still facing upon graduation.
"I worry it sends a message that the fight is over," he said.
Amid those concerns, Biden has vowed to continue tackling college affordability in ways aside from debt cancellation, such as cracking down on for-profit schools that cause debt to spiral and strengthening accountability measures over student-loan companies. Some lawmakers, though, have said they will continue fighting for more loan forgiveness.
New York Rep. Alexandria Ocasio-Cortez said the weekend following Biden's announcement that "it is up to us, and to you, to decide if we are going to stop here, or if we are going to keep pushing."
"I am very grateful for this watershed moment of a first step — it is so encouraging, thrilling, and has already changed SO many people's lives," she said. "But I am also thinking about how this still leaves a question mark for those in the highest amounts of debt, who need the most amount of help. So let's celebrate and keep going."
Garcia hopes that Biden can once again be convinced to go further on student debt.
"I hope executive action on the student loan crisis doesn't end here," he said. "It is a decision not to cancel more to help more people. I don't know where this tolerance for lifelong debt comes from, but we should not settle."
How does student-loan forgiveness impact you? Share your story with Ayelet Sheffey at asheffey@insider.com.