- Joel Lambdin, 49, received $250,000 in student loan forgiveness in January.
- This is the result of occasional adjustments to the Ministry of Education’s accounts.
- Lambdin said the relief will allow him to save for retirement while looking ahead to his longer-term dreams.
Joel Lambdin completed his graduate studies in 1998 — but as a professional musician, he barely made enough money to pay off his student loans and other bills.
So Lambdin, now 49, said his only option to make ends meet was to put his student loans forbearance – in which he wasn’t making payments, but the interest was still accumulating.
“It was just so I could subsist, so I could survive,” Lambdin told Business Insider. “With the hope that at some point I would make enough money that I could get them out of forbearance and start paying them back.”
But he realized that the only way to significantly reduce his student loans was to change careers. Since he didn’t want to do this because he loved working in music, he decided to keep his larger student loan in forbearance and start paying off his smaller loan with a lower monthly payment.
He continued to make these payments until the pandemic pause in student loan payments, at which point he and his wife began developing an action plan to tackle the growing debt a once the break is over. This led them to learn about the Department of Education’s one-time account adjustment initiative, which allowed the department to evaluate borrowers’ accounts and update payment progress toward cancellation of repayment plans income-based and public service loan forgiveness, including any payments made during a forbearance period. .
That account adjustment led to a letter Lambdin received, reviewed by BI, from its student loan servicer Aidvantage on Jan. 31, stating, “Congratulations! The Biden-Harris Administration has completely canceled your federal student loan(s) listed below with Aidvantage. “
For Lambdin, this letter meant that his outstanding student loan balance of $249,255 had effectively been erased.
“I had begun to feel like my fate was being decided for me by the cold hand of finance,” Lambdin said. “and it was a weight I didn’t realize existed until it was no longer there.”
“It was a lot more like putting down a backpack that was really full of books that you’d gotten used to. And then you put it down, and you’re like, ‘Oh, man, this is so much better.’ It’s more like that than a jump-for-joy kind of situation,” he said.
While Lambdin is still working to determine what exactly the relief will mean for him and his wife, he said discussing retirement is “a much more present conversation now” because it’s viable to contribute to savings afterward. relief. He may also start considering buying a house.
The Department of Education continues to cancel student debt through one-time adjustments to its accounts, a process it plans to complete this summer. Most recently, the department erased $7.4 billion in student debt for 277,000 borrowers, some of whom benefited from the adjustments.
Beyond financial goals, Lambdin said this help also allows him to pursue some of his long-term dreams, including taking a sabbatical to study with his meditation teacher in India.
“It’s something I wouldn’t have even considered doing if we had to pay off our student loans, but without them it’s something I can definitely seriously consider doing,” he said. declared. “And so those are the kinds of things that I think really get lost in the monetary side of the debt relief conversation.”
“I was really lucky”
Although Lambdin said he feels like he’s earned the relief given his decades of payments, he also acknowledged that it’s not so easy for many other borrowers.
For example, as BI has previously reported, some borrowers who could qualify for relief through different repayment programs may not have yet received it due to paperwork backlogs and administrative errors. On top of that, funding for federal student loan servicing is strained, meaning many borrowers are facing hour-long wait times and can’t get clear answers about the progress of their payments to customer service.
“There are some real horror stories out there, and I’ve been very lucky that I haven’t experienced the kinds of shenanigans that other people have experienced,” Lambdin said. “So I feel really, really lucky that things worked out the way they did.”
Some of these horror stories include inaccurate payment projections and delayed billing statements. When it comes to having their student loans canceled, some borrowers told BI their servicer made a mistake during cancellation, reinstating their payments months later.
The Ministry of Education said it is aware of the challenges borrowers face and has established an accountability framework to punish agents when they fail to fulfill their contractual obligations.
The department is also developing its new student loan forgiveness plan – it recently released the draft text of the rules, which included relief for borrowers with outstanding interest and those who have been repaying for at least 20 years. years.
As for Lambdin, he is still figuring out how to approach life without having to rack up debt beyond his head. But he can now consider a whole host of options, and he can thank loan forgiveness for that freedom.
“There’s a certain amount of waiting for the other shoe to drop because it’s not that I don’t have confidence that it’s going to happen, it’s just that the debt has been with me for so long, and then she’s not here anymore,” Lambdin said. “And I think that’s something that really takes some getting used to.”
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