Fresno-area graduates haven’t had to pay student loans. What did they do with the money?

Bobbi Rocha owes $56,000 in student loans, but for the past two years, she has put the $800 a month that usually went to repayment toward her goal of buying her first home.

It’s helped her so much, she’s now ready to buy.

“I’ve been able to save money and pay off debts that were affecting my credit,” said Rocha, a registered nurse.

She said her husband also owes about $50,000 in student loans, and she believes canceling both their debts could be the difference between buying a home large enough for their family in their current school district or continuing to rent.

Rocha is one of about two dozen people who responded to The Education Lab’s survey asking how the payment pause on federally held student loans has helped them. The pause began with the Trump administration in March 2020 due to the COVID-19 pandemic and has been extended several times, most recently by President Joe Biden, who extended it to August.

Many are now hopeful Biden will forge ahead with a plan to forgive student debt.

The average student loan borrower in Fresno County owes $32,996 in either federal or private loan debt and pays $202 a month, according to data from Student Loan Hero. Over 45 million Americans currently have a federal student loan.

Most of those who responded to the Ed Lab’s survey said they had put the money toward paying down other debts.

Take Esteban Solis Loya, who has gotten a break from paying back his $60,000 loan from attending Loyola University Chicago. He has been able to pay off medical debt, and he also bought a bed frame.

“I’ve slept without a bed frame for about a decade before buying one,” he said.

Biden has been open to the idea before of forgiving $10,000 per person or making low- to middle-income graduates a priority, although that could be difficult without having borrowers prove their income, according to Politico. Biden said recently, however, that he is not open to forgiving $50,000 in debt for each person. A clearer answer will be revealed within weeks, the president said.

Student loan pause helpful amid inflation

Ashley Abrahamson, who attended UC Davis and then Fresno State for a master’s degree, said this is the first time in her life she’s had a safety net.

She’s paid down her $22,000 loan to $13,000 over the years, and with the amount she’s saved over the last two years, she’s built her first emergency fund.

“Instead of paying my loan, I’ve put my regular monthly payments into a high-yield savings account,” she said. “I have gotten to a point where I have about four to six months of savings if anything were to happen to my job or my life.”

Abrahamson, who works as a program coordinator for the Fresno State Foundation, isn’t sure how it’s going to work out if she has to resume her student loan payments in August, but inflation has her a little worried.

“I was thinking about my groceries that I always buy are $20 more than they used to be just a year ago,” she said, “and it takes like $20 more to fill my tank than it used to a year ago. And I’m not making any more money than I was when all this started — my income is not keeping up with how expensive things are.”

Students who will take out loans during the fall are also facing jumps in interest rates — the Treasury Department announced federal Stafford loans for undergraduates would go up to 4.99% from 3.73% on July 1.

Will President Biden forgive student debt?

Political science assistant professor Everett A. Vieira III holds a doctoral degree but also nearly $150,000 in student debt. The Fresno State instructor usually pays “several hundred dollars” in monthly payments toward his roughly $122,000 principal balance and $8,000 in accrued interest. He also pays down a separate loan of about $20,000 that helped fund his education.

The pause allowed Vieira to pay down his non-student loan debt and increase his credit score, which he must do to purchase a house.

“If my student loan debt were completely canceled, not only would it relieve a tremendous amount of anxiety and stress,” he said, “but it would also allow me to get into a house faster and likely, (in) a nicer home than I can currently afford with the black cloud of student loans hanging over my head.”

Many of those who answered the Ed Lab’s survey said they were planning to buy a home with the money they saved. Nicole Knod already has a home, but she’s using her extra $200 a month to fix it.

Knod said the money that was going to her $20,000 loan is now helping her maintain her home.

“Without this extra money, I would not be able to afford upgrades with my home that keep it in line with city code regulations,” she said.

Knod, a teacher, said she owes the most from returning to school for three years to get her teaching credential.

Now, if she wants to earn any more money, she has to go back again and pay for more classes.

“I feel like maintaining being a teacher is incredibly expensive,” she said. “Canceling my student debt would make teaching a livable profession.”

The Education Lab is a local journalism initiative that highlights education issues critical to the advancement of the San Joaquin Valley. It is funded by donors. Learn about The Bee’s Education Lab on our website.

This story was originally published May 19, 2022 at 5:00 AM.