When Plano ISD teacher Bradley Grissom graduated from the University of Texas at Austin in 2021, he didn’t have to think about the $30,000 in federal student loans he racked up to get his degree.
Now, those loans are top of mind for Grissom and thousands of others across the U.S.
Many were banking on debt forgiveness or reduction to follow the government’s three-year reprieve on loan payments. Instead, repayments resumed in October, with interest accruing.
“I thought it was going to be a while until I was going to have to pay my loans and I thought that they were going to be significantly less,” said Grissom, who teaches social studies.
“Saying I was disappointed is probably an understatement.”
Grissom is far from alone.
Texas has the second highest number of student loan borrowers in the country, with their combined debt totaling $115.9 billion, according to Enterprise Data Warehouse. It trails only California, which holds $137.2 billion in student loan debt.
For those trying to pay off their college educations, their new reality is searching for ways to lower their payments.
Learning about loans
David Resetar got a bachelor’s degree in entrepreneurship from the University of North Texas in 2004 and a master’s degree in international development from the University of Denver in 2014.
When his father died while he was an undergraduate, Resetar said he was promised by UNT administrators that a plan known as Public Service Loan Forgiveness would help him. If a borrower works full-time in the government or for a not-for-profit organization, the plan forgives all federal loans after 120 qualifying payments.
Resetar worked part-time at UNT and planned to go into public service once he graduated. He hoped his years working for a public university would lower his loans. After reading the fine print more closely, he found himself stuck with $100,000 in debt.
“For grad school, I took out way more loans than I needed to,” Resetar said. “Usually you return the cash you don’t use — I did not do that.”
Resetar and Grissom both said they don’t regret financing their education with loans. They do wish, however, that they had gotten more advice about the cost before entering college.
“Student loans were kind of an accepted part of going to college,” Grissom said. “But I never quite fully grasped how much money that was.”
High school students don’t receive adequate information about loans before they go to college, said Karen Krause, executive director of financial aid, scholarships and veterans benefits processing at the University of Texas at Arlington.
“Our high school counselors can’t put anything else on their plate,” Krause said. “I think they’re interested, I think they try, but it’s hard if they’ve got a caseload of 500 students.”
First-generation students and those from low-income families are more at risk of taking loans out without the proper knowledge, Krause said. Some high schools but not all have college readiness programs to work with at-risk students, she said.
Facing repayment
In August, the Biden-Harris administration replaced the previous income-driven repayment plan, known as REPAYE, with a new one called SAVE.
The new plan significantly lowered Grissom and Resetar’s monthly payments. The SAVE plan increased income exceptions, so if borrowers are single and earn $32,800 or less or are part of a family of four earning $67,500 or less their monthly payment amount will be $0.
At the start of this year, Resetar was looking at a monthly bill of around $300. With the SAVE plan, he was able to reduce it to $108 within minutes.
“I immediately went back to my monthly budget,” Resetar said. “I would have been living month-to-month and now I can cover all my expenses and I have enough for savings.”
Grissom previously expected to dish out about $400 a month to pay back his student loans. The SAVE plan shaved his bill to $130 a month — a more manageable but still unplanned expense. To compensate, he’s eating out less, ordering fewer items from Amazon and pushing back future plans.
“I’ve been dating my girlfriend for six and a half years at this point and we’ve been talking about getting married and getting the house pretty soon,” Grissom said. “It’s delayed us a little bit.”
Tristan Hsieh, a 2020 UT graduate, has already paid off $10,000 in student debt with help from Parent PLUS loans and grants from AmeriCorps’ Eagle scholars program, which awards grants to participants who become teachers.
Those grants gave Hsieh, who teaches social studies at Plano East, a runway to pay off his loans.
Hsieh said he found it fairly simple to log onto his loan servicer’s website and connect his bank account. He was also able to follow debt cancellation updates through emails from his servicer.
Not all borrowers, however, feel like their loan servicers are able to convey important information through easy-to-understand emails. Those communications can be lingo-filled, said Sabrina Calazans, managing director at the Student Debt Crisis Center in San Francisco.
Grissom said he’s encountered that in emails he receives from his loan servicer. He finds himself scrolling to the bottom to find what he owes.
“Maybe I’m not reading the emails as diligently as I should,” Grissom said. “But when there’s like 1000s of words on the sheet that looks like ‘legalese’ — I don’t know what to do.”
Calazans recommends StudentAid.gov to help borrowers decipher loan information. There also are several organizations that help borrowers understand repayment plans, loans and interest, including Student Debt Crisis Center, Student Borrower Protection Center, NAACP Youth in College and Young Invincibles.
Looking forward
Loan repayment is now inevitable. Yet Resetar and Grissom envision a day when SAVE or the public service program will forgive their loans – even if it’s 20 years from now.
“These lower payments will never pay off the loan because the interest rate will always eat into it,” Resetar said. “I think this administration realized we are all under pain and it is not sustainable.”
Hsieh, Resetar and Grissom all said their degrees are more valuable than being debt-free. They also wonder if there isn’t a better way for the government to help reduce the cost of college, which averages over $36,000 a year in the U.S. Three in 10 college students borrow money, according to Educationdata.org.
“The 10s of millions of people in debt right now are not lazy … we’re not out to cheat anyone or steal money,” Resetar said. “I think we’re just trying to have a better life for ourselves and the people in our lives.”