Kristin McGuire, 40, said that $10,000 would not make an enormous difference in what she owes for the bachelor’s degree in public administration she earned at California State University in 2005. Ms. McGuire borrowed $24,000, but with interest and fees, her debt has ballooned to $50,000.
That is a common story among the Black classmates she studied with, said Ms. McGuire, the executive director of Young Invincibles, a young-adult political advocacy group. “All of us owe more now than when we started,” she said.
Still, the payment pause has given her and her husband — who also owes $50,000, for loans he took for an associate degree from a for-profit school — financial breathing room. The $400 a month she saved by not paying her loans for the past two years let her put more money into paying her mortgage, allowing her to refinance at a lower rate.
“It let us really start to save and build the generational wealth that we’d been blocked out of,” Ms. McGuire said.
Republicans have called any debt cancellation a handout to largely high-income college graduates. Some economists warn it could lead colleges and universities to raise tuition prices, in anticipation of future loan relief.
Congressional offices, outside groups and even the companies that service federal student loans have been left to guess at Mr. Biden’s eventual move. Officials at two loan servicers — which have been fielding calls all month from borrowers seeking guidance about whether they will have bills due again in September — said that they had not received any guidance from the Education Department as of Tuesday about the administration’s plans.
“I don’t know what the plan is, nor have servicers even been consulted about how they would do that and what’s possible to implement,” said Scott Buchanan, the executive director for the Student Loan Servicing Alliance, a trade group. “That’s my deep fear — that they announce something here and it’s not doable.”
Erica L. Green contributed reporting.
