A couple with over $250,000 in student debt finally got their balance wiped out after nearly 3 decades of repayment: 'This is life-altering for us'

• Ron and Marcia Rizzardi just got their $250,000 student-debt balance wiped out.
• That's because of the one-time account adjustment for borrowers on income-driven repayment plans.
• The Rizzardis made payments for nearly three decades and paid back more than they borrowed.

After nearly three decades of repayment, Ron and Marcia Rizzardi are finally done paying off their student loans.

When Insider first spoke with the Rizzardis in 2021, they were managing a $130,000 student-debt load — and that was after making $140,000 worth of payments on an original balance of $54,000. That's because of interest capitalization, an issue many borrowers are familiar with in which unpaid interest builds onto a borrower's principal balance, which makes it difficult to stay on top of the original amount borrowed. 

The couple got married in 1992 and decided that consolidating their separate debt loads would be the best financial option for them, allowing them to pay off a single balance with one interest rate. However, once they started repayment, a series of layoffs and medical issues caused them to put their loans on deferment — meaning that they weren't making monthly payments, but their debt continued to grow because of interest.

"I fully expect this debt will follow me to the grave," Ron Rizzardi told Insider in 2021. "My only comfort is that it will go away when I die."

It looks like he will live to see the day that his balance is zeroed out. On August 15, the Rizzardis received a letter from their student-loan company, Aidvantage, with the header: "Congratulations! The Biden-Harris Administration has forgiven your federal student loan(s) listed below with Aidvantage in full." According to the letter, which Insider reviewed, the Rizzardis' original consolidated balance of $256,711 — which included a Parent Loan for Undergraduate Students, or PLUS, loans for their daughters — will be wiped out. 

"It's a little unbelievable — surreal, maybe," Ron Rizzardi told Insider after he received that letter. "That amount is no longer something that I have to pay. And so as long as our income stays where it is right now, that will have a cumulative effect over the next year, two years, and we'll finally have more money to put into our retirement accounts. The outlook with having money available to be put into retirement is better than it's been probably since I've been collecting my 401(k) over 30 years."

This relief can be credited to President Joe Biden's one-time account adjustment for borrowers on income-driven repayment plans. This adjustment allows the Education Department to evaluate which borrowers have completed the required 20 or 25 years on the plans to receive loan forgiveness but have yet to get that relief because of administrative errors that keep those borrowers in repayment.

Most recently, the department announced that 804,000 borrowers qualified for $39 billion in relief because of that adjustment — and that it would continue looking at borrowers' accounts every two months to identify more batches for loan forgiveness. Marcia Rizzardi said of the relief: "This is life-altering for us."

"I feel like somebody has finally listened that there really was something wrong with the system," she said. "We've made 25 years of solid payments, and this thing was only going to grow. It is a broken system. We'd already paid it three times over. It's not like we're trying to get out of the debt that we owe.

"We feel like we've paid that, and this administration has basically backed average people. All he's doing is correcting a system that was corrupt and broken and honoring people who had done their darnedest to do this and it was never going to end."

'The uncertainty was very disconcerting'

There's no doubt the Rizzardis are excited about their recent loan forgiveness, but getting to that point wasn't easy.

In the months leading up to that relief, Ron Rizzardi said he sought out the advice of a bankruptcy lawyer to assess alternate routes to get rid of their debt without relying on federal efforts. Their confidence waned because of the constant legal challenges to Biden's relief efforts — the Supreme Court struck down Biden's plan for broad student-loan forgiveness at the end of June, and conservative-backed groups filed a lawsuit to block the account adjustment for income-driven repayment plans.

In addition, Ron Rizzardi said that he called his student-loan company a few weeks before he was notified of the relief to get more information on repayment. He said it felt like the customer-service representatives were learning about changes to repayment in "real time."

"The agents were struggling to keep up on advising people who had loans on what their options are," he said. "And we were in constant contact with an ombudsman from the Education Department who was very helpful, but it was to a point where they didn't know anything more that they can tell us other than there was a lawsuit and they're still pressing forward. The uncertainty was very disconcerting."

A federal court ended up dismissing the lawsuit seeking to block the income-driven-repayment adjustment over a lack of standing, allowing the administration to continue discharging those loans.

Still, with the student-loan-payment pause ending in September, borrowers continue to experience issues with their balances. An Education Department spokesperson previously told Insider the department was in frequent contact with servicers to ensure they were communicating effectively to borrowers about their repayment options.

For the Rizzardis, their chapter of student-loan repayment is now closed.

"I had just gotten back from a meeting, and I sat down, and I just got into the habit of looking at my servicer's account every day," Ron Rizzardi said. "And I wasn't expecting anything, and I was kind of nervous about some lawsuits that were out there. But then I took a look at it, and I saw a change, a definite change. There was no payment, and the balance was zero. And I was like, wow, it finally happened."