For Lizzy and Ryan Fox, it has always been important to do what made sense, financially.
In 2017, with the cost of living rising, especially rent prices, there were few things the couple could do to be better stewards of their finances. Moving out of Southern California was one; avoiding their student loans was not.
So when Ryan Fox sent his wife President Joe Biden’s announcement Wednesday — an extension of the student loan repayment moratorium and the cancellation of up to $20,000 for some borrowers — the former Costa Mesa resident was elated. She felt freedom. She experienced peace. And she began to believe a future in California again might not be unattainable.
Lizzy Fox, now 28 years old and living in Florida, is a 2015 graduate of Vanguard University in Costa Mesa. A Pell Grant recipient, she graduated with about $30,000 in student loan debt and had about $17,500 left as of Wednesday. (Ryan Grant graduated from Biola University in 2016 with $14,000 in student loan debt.)
“It is an overwhelming feeling. I don’t think it’s sunk in yet the freedom that this is about to allow us financially,” Lizzy Fox said in a phone interview.
Between the pandemic and starting a new business, the pause in federal student loan payments over the past couple of years has been welcome, but the fear of them restarting loomed.
“We both come from lower-income families,” Lizzy Fox said of herself and her husband. “In order for me to have gotten a degree, I had to take the loans out. There was no other choice.”
The president said those who earn less than $125,000 per year (or $250,000 per year for a family) could be eligible for up to $10,000 in loan forgiveness. For those who received Pell Grants, which are given to students with the greatest financial need, the federal government could alleviate an additional $10,000.
Biden’s announcement was met with both celebration and consternation across Southern California — almost expected in today’s political climate.
U.S. Sen. Alex Padilla praised the president, saying “hardworking Americans won.”
“First-generation students and communities of color will now be able to better save for their future and build wealth. Young families will have more flexibility to pay for essentials like child care, rent, transportation and food,” Padilla said.
But GOP Congresswoman Michelle Steel, a member of the House Education and Labor Committee, called it a “slap in the face” to those who have already paid off their loans or served in the military.
“The administration should focus on reducing the record-high inflation that is already costing families an extra $5,000 this year instead of continuing to pass policies that just trickle-down costs to taxpayers,” Steel told the Southern California News Group.
In California, residents are responsible for about $141.8 billion in student loan debt, according to figures compiled by the Education Data Initiative in April. Californians owe more than the average U.S. student loan borrower, the research organization found.
There are more than 3.8 million student borrowers in California, with nearly 52% of them under the age of 35. The average student loan debt in California is $37,084, the Education Data Initiative found.
William Jeynes, an education professor at Cal State Long Beach, had mixed feelings about the student loan announcement. He said Biden addressing the student debt issue is a positive but expressed concern about the income brackets that will benefit from the plan.
“Have we as a society lost our compassion for the poor because the main beneficiaries of this are going to be people in the upper middle class, and the taxes have to come from somewhere because it’s estimated by the New York Federal Reserve that the amount of loan forgiveness will cost the economy around $321 billion,” Jeynes said. “Prices are going to go up, taxes are going to go up and what you’re going to end up with is the middle class and the lower middle class, they’re going to pay higher taxes and prices to support the upper middle class largely.”
For Richard White, a 25-year-old who works in higher education, Biden’s announcement was welcome news — and White might soon be debt free.
White graduated from UCLA in 2019 with a political science degree and nearly $20,000 in student loan debt, most of which went to pay for housing. He took advantage of the pause on interest collected on his loans during the pandemic and paid off as much as he could.
“I will take this as a win. There has to be a stepping stone,” White said, acknowledging some Democratic lawmakers have pushed the administration to forgive as much as $50,000. “We can bicker back-and-forth about how things can improve, but just talking doesn’t relieve the situation we’re in.”
Art Escajeda of La Puente graduated from UC Irvine in 1978 with a bachelor of science degree in social science and communications. He said he has paid back all of his student loans in full, but he was only too happy to see what Biden did.
“President Biden is moving in the right direction regarding student-loan forgiveness,” Escajeda said. “I think he can do more, and he will. The financial institutions (that) initially gave loans to 18-year-olds were ‘loan sharking.’
“Who, in their right mind, would loan an 18-year-old, with no income and no credit score, thousands of dollars? Not only should all student debt be forgiven, but these institutions should be held accountable for their actions.”
Kaitlyn Rowell, 21, will graduate from Cal State Long Beach in the spring. So far, she’s taken out about $18,000 in student loans, her only financial aid option to get her through college.
“It would be great if we can just have all student loans forgiven, right? But it’s definitely a step in the right direction and can certainly help ease a lot of people’s stress and financial burdens,” Rowell said. “I know it will for me.”
In a statement, CSU Interim Chancellor Jolene Koester said nearly half of the system’s undergraduate students are Pell Grant recipients, meaning they are among those with the greatest financial need.
“With even less debt, these students and our recent alumni will be better positioned to strengthen the California workforce and communities throughout the state as they pursue their professional and personal dreams.”
For Lizzy Fox, who left Orange County in 2017, those dreams include buying a house, building her social media and web design business, having children, and visiting — or even moving back to — California to be closer to family.
“There’s breathing room now that allows us to move into that next season of our lives,” she said.
Staff writers Clara Harter, Christina Merino, Robert Morales and The Associated Press contributed to this report.
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