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California students believed loan forgiveness would change lives, but SCOTUS decision leaves them ‘devastated’

June 30, 2023

Born and raised in Highland Park, Marcos Molina, witnessed the neighborhood’s gentrification and the abusive tactics landlords like his utilized to displace residents.

Charged by this trauma, he chose to study Urban Planning at Cal Poly Pomona so that he could combat the recurring crisis throughout LA County.

“The privilege of receiving financial assistance helped me pay at least my tuition but did not help pay for my housing or costs of living,” he said. “So I had to take on student loans to essentially survive in school.”

By 2013, he graduated with $25,000 in student loan debt, and as the months passed he said he heard no word from the lender company on repayment. After investigating for himself, he learned the company was using an incorrect email to correspond with him, and he was already four payments behind — a whopping $3,000 was demanded up front and $600 every month going forward.

To make matters worse, it also tanked Molina’s credit score and so housing became difficult to secure.

“I was being paid like $35,000 a year so I was like, ‘I’m not going to eat today. I’ll eat tomorrow,’ he said. “It was just survival at that point — I wasn’t living.”

Today, Molina has secured income-based repayment and is slowly working to bring down his balance and recover his credit. Working for a nonprofit and living in Pomona in a friend’s home, he said he is luckier than most who end up in a similar situation.

But the U.S. Supreme Court on Friday, June 30, rejected President Joe Biden’s $400 billion plan to cancel or reduce student loans for millions of Americans, throwing a wrench in students’ and graduates’ financial plans.

The forgiveness program would have canceled $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Some Pell Grant recipients would have had an additional $10,000 in debt forgiven.

For Richard White, a 2019 UCLA graduate who still has about $10,000 in student loan debt, that means some serious consideration about his living situation.

Estimating his monthly student loan payments to be about $300, White said he was able to move to an apartment on his own (meaning, no roommates) in Long Beach when payments were put on pause during the pandemic. He was able to put more money into his savings and provide upkeep for his car since he drives to work — although, even without the student loan payment, his expenses did not drastically decrease since the cost of living and food and other prices climbed.

“The Supreme Court made its decision, and it is what it is, but I hope our federal government — meaning our president and Congress — can come together and figure this out,” said White. “It was a bold commitment from our government that they would support individuals like myself. There needs to be a bigger push to make sure something happens for individuals like myself.”

“I have to figure out how to limit my expenses elsewhere. It’s going to be somewhat difficult. I may have to change my living situation if I can’t increase my income,” he said.

UC Riverside student Ryan Nguyen is slowly accruing up to $60,000 in student loan debt before he graduates — even with about a third of his tuition covered by unsubsidized Stafford loans. Nguyen, who was recently laid off from a minimum-wage internship and is actively seeking a new job, said he might need further schooling so he can have a career that would more easily help him pay off his student loans.

With the pause in loan payments, Nguyen’s money has been going to rent and other expenses, he said.

For Phoebe San Pedro, a fourth-year psychology student at Cal State Fullerton, dreams like traveling to the Philippines to see her family will have to wait.

By the time she graduates, San Pedro expects to have at least $25,000 in student loan debt. Most of her parents’ investments were used to support her older sister’s schooling at UCI, and she lost some financial aid because she didn’t graduate in four years.

“I’m confident that I can (pay my student loan debt), but it’ll take time and a lot of putting my personal dreams on hold so I can be financially able to make a living and pay off these loans,” she said.

Ethan Huang doesn’t regret attending Caltech, a private university in Pasadena, but the alumnus said it came with a hefty price tag.

“I have loans and seeing the decision this morning, my heart dropped a little because I would have definitely relieved a significant portion of my loans,” said Huang, now a Ph.D. student at Stanford. “It’s devastating, to be honest.”

Others, however, were understanding of the ruling.

“I think that it would be nice for all students to get their loans forgiven,” said USC alumna Arianna Shapiro, now a law student at Loyola Law. “However, I understand why the Supreme Court voted against it because in order to forgive everyone’s debt, you need to raise taxes for everyone in America because that’s the only way to get that money.”

But for some, like Molina and San Pedro, a reduction or cancellation of student loan debt meant they could give back more to their communities.

San Pedro plans to go into a three-year master’s program with financial support from Disney’s Aspire program and hopes to become a culturally competent therapist in her community. “Not everyone can put their financial health on the line like this, but I hope there’s more like me to make the sacrifice for the betterment of our community and all people,” she said.

“In a perfect world, I would have enough money to open spaces to help other people who come from disenfranchised communities,” said Molino. “Getting my loans forgiven so that I could push forward isn’t for selfish greed. I don’t want my loans forgiven because I want to be a millionaire, it’s to at least live happily and help those around us.”

Loan repayments have been on hold since the pandemic, but borrowers are now expected to start payments once again by late summer.

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Orange County Register

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California students believed loan forgiveness would change lives, but SCOTUS decision leaves them ‘devastated’

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