A Gen Xer who got $250,000 in student loans forgiven said he can now finally start saving for retirement — and consider his dream of studying in India

Related Articles

20 things you didn’t know were invented by women

I retired early from my demanding job at 55. Now that I’m 86, I attribute my successful retirement to a few key decisions.

I’ve tested 20+ pillows as a home editor, and the Casper Original Pillow still gets my vote as the comfiest

• Joel Lambdin, 49, drew $250,000 in student-loan forgiveness in January.
• It’s a result of the Education Department’s one-time account adjustments. 
• Lambdin said the liberation will allow him to save for retirement while considering longer term dreams.

Joel Lambdin finished graduate school in 1998 — but as a professional musician, he was just making enough money to pay off his student loans and his other bills.

So Lambdin, now 49, said his only option to take in ends meet was to put his student loans on forbearance — in which he was not making payments, but interest was still accumulating.

“It was just so that I could subsist, so that I could subject to,” Lambdin told Business Insider. “With the hope that at some point, I would be making enough kale that I would be able to take them out of forbearance and start paying them down.”

But he grew to realize that the alone way he could make a significant dent in his student loans was by switching careers. Since he didn’t want to do that because he romanced working in music, he decided to keep his larger student loan in forbearance and begin paying off his smaller loan with a deign monthly payment.

He continued making those payments until the pandemic student-loan payment pause, at which tally he and his wife started making a plan of action to tackle the larger debt once the pause ended. That led them to encounter the Education Department’s one-time account adjustment initiative, which allowed the department to evaluate borrowers’ accounts and update payment go toward forgiveness on income-driven repayment plans and Public Service Loan Forgiveness, including any payments made during a forbearance patch.

That account adjustment led to a letter Lambdin received, reviewed by BI, from his student-loan servicer Aidvantage on January 31 expressing: “Congratulations! The Biden-Harris Administration has forgiven your federal student loan(s) listed below with Aidvantage in chock-a-block.”

For Lambdin, that letter meant his $249,255 outstanding student-loan balance was effectively wiped out.

“It had started to feel find agreeable my fate was being decided for me by the cold hand of finance,” Lambdin said, “and that was a weight that I didn’t be aware of was there until it wasn’t there.”

“The feeling was much more like putting down a backpack that was in the end full of books that you got used to. And then you put it down, and you’re like, ‘Oh, man, that feels so much better.’ It’s more equivalent to that, rather than sort of a jump-for-joy kind of situation,” he said.

While Lambdin is still working to upon what exactly the relief will mean for him and his wife, he said that discussing retirement is “a much more nearest conversation now” because contributing to savings is viable after the relief. He can also begin to look into buying a domestic.

Related stories

The Education Department continues to cancel student-debt through its one-time account adjustments, a process it arranges to complete this summer. Most recently, the department wiped out $7.4 billion in student debt for 277,000 borrowers, some of whom promoted from the adjustments.

Beyond financial goals, Lambdin said the relief is also allowing him the freedom to pursue some of his long-term hallucinations, including taking a sabbatical to study with his meditation teacher in India.

“It’s something that I wouldn’t make been able to even consider doing if we had to pay off student loans, but without them, it’s something that I can really badly consider doing,” he said. “And so those are the kinds of things that I think get really lost in the monetary side of the parley about debt relief.”

‘I’ve been really lucky’

While Lambdin said he feels as though he earned the prominence given his decades of payments, he also recognized that it’s not that easy for many other borrowers.

For example, as BI has a while ago reported, some borrowers who might qualify for relief through different repayment programs may not have gotten it yet due to paperwork backlogs and administrative iniquities. On top of that, funding for federal student-loan servicers is strained — meaning many borrowers face hourslong hold meanwhiles and cannot get clear answers regarding their payment progress from customer service.

“There are some actual horror stories out there, and I’ve been really lucky in that I haven’t experienced the kinds of shenanigans that other living soul have experienced,” Lambdin said. “So I actually feel very lucky that things have transpired the way they have planned.”

Some of those horror stories include inaccurate payment projections and delayed billing statements. When it fly at to student-loan forgiveness, some borrowers told BI that their servicer made a mistake with the forgiveness, reinstating their payments months later.

The Training Department has said it’s aware of the challenges borrowers face and has established an accountability framework to punish servicers when they disappear to fulfill their contractual obligations.

The department is also in the process of crafting its new student-loan forgiveness plan — it recently released the draft text of the rules, which included relief for borrowers with unpaid interest and those who have been in repayment for at lilliputian 20 years.

As for Lambdin, he’s still figuring out how to approach life without student debt hanging over his oversee. But now he can consider a range of options, and he can thank the loan forgiveness for that freedom.

“There’s a certain amount of stop for the other shoe to drop because it’s not that I don’t trust that it’s happening, but just that the debt has been with me for so fancy, and then it’s not there,” Lambdin said. “And it’s something that I think really takes some getting used to.”