About 420,000 Iowans owed a combined total of $12.8 billion in student debt, as of September 2020. The average amount for Iowans with student loan debt was $30,500.
People in Iowa are more likely to have student loan debt but owe “significantly less on average” compared to individuals in other states, according to data and research from EducationData.org.
In the United States overall, 45 million borrowers have a combined $1.7 trillion dollars in student debt.
Payments for federal student loans have been suspended since March due to the COVID-19 pandemic. These payments are set to resume on Jan. 31, but President-elect Joe Biden has indicated he will extend the pause on payments on his first day in office.
Biden has also said he hopes to cancel $10,000 of federal student loan debt per person, but details or a specific time frame have not been announced yet. Biden is facing pressure from Democrats in Congress to go further and cancel up to $50,000 per person in federal student loan debt.
Courtney Juelich, a graduate instructor at the University of Iowa and assistant professor at the University of Wisconsin-Stout, said there is a lot of uncertainty for millennials regarding economic security. The student debt crisis can affect the housing market, the workforce and birth rates for decades to come, Juelich said.
“Biggest changes we’ve seen come out of this student debt crisis is that we have a generation of millennials — the largest generation right now in the U.S. — not buying homes or getting married at the same rate as their parents,” Juelich said. “Most of them are at home with their parents, and this is going on into their 30s because they don’t have that financial footing. [Millennials] are paying hundreds if not thousands of dollars a month into student loans, which they could instead save into a down payment or to become financially secure.”
Little Village interviewed five Iowans about what it would mean to them if their student debt was canceled or reduced. Their responses have been edited for clarity.
Emily Irwin, 30, local continuous improvement leader at US Foods, Cedar Rapids
“I’m fortunate enough not to live with overwhelming debt, so it’s not about paying my rent on time, for example. I think about how much more I could do to help people truly in need, or nonprofit organizations that I love or even flooding more money into local businesses. It seems like a decision, one or the other, right now. No debt, no decision — just giving back.”
Amber Wieland, 26, paralegal assistant, Iowa City
“If student debt was canceled or reduced, it would mean I could be able to afford essential living. Right now, it’s incredibly difficult for me to pay rent, car insurance, health insurance, car payments and be $20,000 in debt from student loans. I’ve looked into getting a bank loan for a home, however, I wasn’t granted enough to even get a small townhome with my outstanding debt, and I’m forced to rent. Further, I want to go back to college for law, but I know I can’t because I have to work a full-time job in order to be able to afford my essential living.”
Olivia Lestrud, 29, theater administration/audience service manager, Cedar Rapids
“I joke that I don’t expect to ever have my student loans paid. I have already maxed out deferments and forbearances options and am only now finding relief because the federal government has suspended student loan payments. I graduated years ago with about $40,000 in student loan debt, and after years of repayment, I still owe $40,000. Forgiveness would take pressures away and allow me to make tangible goals and investments for my future.”
Allison Sylvester, 31, teacher, Marion
“If we were to have our debt forgiven or reduced, the first thing it would mean would be that we would be able to start saving more money for our daughters’ futures and for our retirement. In the more immediate future, we would also be able to make more ethical decisions with how we spend our money on a daily basis. We like to support local business as much as possible, but that usually also means spending more. We’re happy to do that when we can, so any amount of loan forgiveness would give us more money to put into the local economy, whether that’s food, products, entertainment or home renovations.”
Eric Sylvester, 31, teacher, Marion
“When imagining what life would be like in a world where my student loan debt were to be canceled, the first word that comes to mind is opportunity. I attended an in-state university to become a teacher. I worked the entire time I was in college and worked full-time during my summers. I sacrificed and saved everywhere I could. Despite doing all the ‘right things’ to make college as affordable as I could manage, my parents and I both had to take out a sizable amount of student loans to pay for my education.”
“It’s hard to not feel frustrated when older generations label our requests for student debt relief as a sign of ‘entitlement’ or a ‘lack of fiscal responsibility.’ It wasn’t that long ago that a four-year college tuition could largely be paid with the same part-time employment I had committed to during my time in school. And I’m incredibly fortunate; I have been continually employed as a teacher since my graduation in 2013. But the student loans I will continue to pay for the next decade have deferred my ability to adequately save for retirement, my children’s future education costs, and my family’s ability to truly build towards the ‘American Dream’ we were promised as children.”
“My family and I have built a wonderful life together. We are comfortable, happy and are deeply grateful to have a sense of financial stability that many do not get to enjoy even in the best of times. We’ll be okay, and we’ll pay off my debt over the next ten years. But to no longer have to think of saving for my future or my daughters’ futures as something that can begin in my late 30s? That’s what student debt forgiveness would make possible for me.”