Meet a student-loan borrower with $101,000 in debt who doesn't have 'any hope' with Biden's new plan for loan forgiveness: 'I'm never going to be able to pay it down'

• Jarrett, 38, has $101,000 in student debt and was hopeful for Joe Biden's loan forgiveness.
• But after the Supreme Court struck Biden's first plan down, he isn't feeling hopeful.
• He told Insider he didn't think Biden's new plan for relief would deliver for borrowers.

Jarrett, 38, isn't feeling too hot about President Joe Biden's new plan for student-loan forgiveness.

After graduating with an undergraduate degree during the 2008 financial crisis, Jarrett — who requested his last name be withheld for privacy but whose identity is known to Insider — was laid off from his job. He decided pursuing an MBA would make him more appealing to employers, so that's what he did, and he graduated with his advanced degree in 2012 with the help of student loans.

But Jarrett said the degree didn't pay off as intended. For years after graduating, he struggled to find steady employment and placed his initial student-loan balance of about $60,000 on forbearance. During that period when he was not making payments, interest was still growing, and it surged his balance to about $80,000.

Now, Jarrett's student-debt load is just over $101,000, according to documents reviewed by Insider — and he doesn't see himself ever paying it off.

"I'm never going to be able to pay it down," Jarrett told Insider. "The interest rates on them have put me in a trap where it is literally impossible to do. The interest is accumulating faster than I can put any money down on it, making it impossible to get out from under if you're not being compensated at a much higher level than I've had."

Jarrett now works in the federal government, which means he can qualify for the Public Service Loan Forgiveness program that forgives student debt for government and nonprofit workers after ten years of qualifying payments. He said he felt "fortunate" to be able to live reasonably on his salary during the student-loan payment pause — but now that federal payments resumed in October, he decided to hold off on making any payments for now and take advantage of the Education Department's 12-month "on-ramp" period, during which it will not report any missed payments to credit agencies. He wants to be able to put as much money as he can toward his savings, given, the Supreme Court struck down the president's plan to cancel up to $20,000 in student debt for federal borrowers at the end of June.

Shortly after the high court's ruling, Biden announced a new strategy: His Education Department would pursue using a 1965 law — the Higher Education Act — to try to get relief to millions of borrowers. The department said that this process would take a lot longer than the first time around.

"Once I start having to make payments again, that's going to eat into a considerable amount of my ability to save up or put money towards a car, or anything along those lines," Jarrett said. "I'm going to be heavily impacted, for sure."

And the uncertainty surrounding when — and if — borrowers will get broad student-debt relief only makes matters worse.

'I don't have any hope'

Biden has expressed confidence in the legality of using the Higher Education Act to cancel student debt, as the law's text says the education secretary can "enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand" related to federal student debt.

"This new path is legally sound," Biden said during remarks after the Supreme Court decision. "It's going to take longer, and in my view is the best path that remains in providing for as many borrowers possible. But I'm directing my team to move as quickly as possible on the law."

The law requires the administration go through a negotiated rulemaking process, during which it has to hold public hearings and solicit feedback on the plan — a process that could take months, at minimum. Jarrett isn't holding out hope that the plan will come to fruition anytime soon.

"I don't have any hope. I don't think it's enough," Jarrett said. "I don't think anyone in power really fully grasps what student debt is doing to the country in general. And some vague speech about how they're going to start exploring this new route, it just does nothing for me. It doesn't feel like he's being anywhere near as proactive as I think we need him to be on this issue."

Some Democratic lawmakers are also pushing Biden to go further on relief. Rep. Alexandria Ocasio-Cortez, for example, urged Biden on CNN to pause interest during the 12-month "on-ramp" period, and Rep. Ro Khanna has called on Biden to extend the student-loan payment pause until borrowers get broad relief, even though the debt-ceiling bill Biden recently signed into law codified the end of the payment pause.

Biden has yet to publicly comment on any of those requests, and the Education Department said "the Secretary has directed his staff to explore policy options for debt relief that will help as many people as possible." So far, the department has held two negotiation sessions with stakeholders to identify what the new relief should look like, and it's identified four groups of borrowers that it wants to prioritize for the next attempt at loan forgiveness.

Still, Jarrett said his confidence level was "extremely low" that he'd see relief in the near future.

"I think everything that Biden's shown in his actions is that he isn't really prepared or willing to make a major step to relieve people's issues," Jarrett said.

"The $10,000 or $20,000 initial debt forgiveness wasn't anywhere near enough for me," he added. "And I know it's not anywhere near enough for millions and millions of people. It just signals to me that he's not willing to actually address the issue because I don't think his previous plan adequately addressed the issue. And I certainly don't think that what he's doing now is going to address the issue either."