Struggling borrowers in Hawaii, along with millions across the country, are facing hardships as the payment suspension comes to an end.
Rewritten Article:
Brace yourselves, students! Federal loan collections, on hold since the pandemic, are about to kick back into gear next week. And it's leaving millions of American students - current and former - feeling a mix of doubt and dread.
This move by the U.S. Department of Education marks a substantial shift in the wind-down of COVID-19 relief efforts that began in March 2020. For Hawaii residents in particular, this decision brings on added worry, not just for those already in default on their student loans, but also for those counting on them to fund their education.
Since October 2023, monthly loan payments and interest have returned for most federal loan borrowers. Those in default, however, were given a reprieve until aggressive collection measures were restarted, a buffer that's about to expire. If borrowers haven't taken steps to address delinquencies, they could find themselves facing some ugly consequences, such as wage garnishment, tax refund seizure, and other enforcement actions.
With the lifting of the loan pause, students relying on federal loans for their education will no longer have the safety net that the collection moratorium provided.
During the 2024 academic year, 6,382 undergraduate students across the University of Hawaii System took out federal student loans, with 3,988 enrolled at UH Manoa. The typical loan amount for undergraduates at UH Manoa came in at $6,404. Additionally, 1,707 graduate students were awarded federal loans, averaging $19,143 per recipient.
Jen Kim, a Makiki resident and single mother of three, is feeling the strain. Her eldest son, who graduated from UH Manoa and then completed dental school at the University of Washington, still owes nearly $200,000 in federal student debt, having paid back approximately $12,000. With interest on those loans rekindled at an annual 6.5% rate, Kim is worried the balance will get out of control.
"He's done everything right. He studied here, moved on to dental school, and is now training to serve our people in Hawaii," Kim said. "But the interest is brutal. For every payment he makes, it feels like the total stays the same."
Nationally, dental school graduates tend to carry some of the heaviest student loan debt in the land. The American Dental Education Association estimates that the average debt for the class of 2024 stood at around $312,700.
While Kim's son's balance falls below the national average, it's still a daunting figure for the Kim family, given the high cost of living in Hawaii and the limited options for affordable housing.
"We've already chipped in for basic expenses like groceries and rent," she said. "Now we're covering the interest, too, and I'm dipping into my savings. I'm just thinking: He wants to be a dentist in Hawaii, not Vegas, but the system makes it tough for him to come home."
For Harvey Tagalicud, a junior at UH Manoa's Shidler College of Business, the financial burden of loans has been a persistent presence throughout his academic journey. Tagalicud, a first-generation college student, expects his debt to fall between $18,000 and $35,000, depending on emergencies that may crop up.
He's managed to avoid unsubsidized loans, thanks to financial literacy guidance from programs like Upward Bound.
"Student loans are like the most valuable way for me to navigate the last stages of college, in a way - almost like a necessary evil," he said. "It's a steep learning curve. We're making one of the biggest financial decisions, the first big financial decision of our lives, and sometimes, we can't even wrap our heads around it."
The emotional toll, he adds, is just as real as the financial one.
"In consumer psychology, when scarcity exists, it becomes this constant thing looming in the back of your head," Tagalicud said.
Tagalicud stresses that students aren't trying to shirk their obligations, and that the current system discourages genuine learning.
"We're not trying to avoid loan repayments. We're trying to learn with genuine passion and curiosity, but without being weighed down by the financial weight that's become one of the biggest decisions in our lives," he said. "It's crucial we create policies that encourage us to keep learning, not just digging out from debt."
Ava Song, a third-year medical student from New York, is preparing to transfer to UH Manoa's John A. Burns School of Medicine. Managing her education means juggling three part-time jobs while carrying over $180,000 in student loan debt.
Song hopes the unique opportunities and financial aid packages offered by JABSOM will alleviate her financial burden. In New York, she's worked as a high school tutor, a clinic assistant sterilizing instruments, and a weekend bartender - often putting in 14-hour days split between work, classes, and clinic rotations.
"It's exhausting, but I don't have much choice," Song said. "Every penny I take home means money I don't have to borrow and money that doesn't build up interest later."
Alicia Malia, a 37-year-old physical therapist who graduated from UH Hilo in 2011, pointed out that student loan debt doesn't always disappear once you've graduated or even when you've established a career.
"The system told us to get a good education so we could get good jobs and live a good life," Malia said. "But the reality is that to get that education, most of us had to borrow a shitload of money. We worked ourselves ragged in school just to afford living, and then we graduate into jobs where we still have to work our fingers to the bone - not just to live, but to pay back what we borrowed."
Malia still owes around $28,000 in student loans, despite having been employed in her field for over a decade. The pandemic-era break in payments, she said, was a much-needed reprieve that allowed her to catch up on other bills and finally build some savings.
"That break gave me some room to breathe. I could help my parents, fix my car, even take a trip for the first time in years," she said. "But now, with the payments resumed and collections looming for those in default, I'm really concerned about younger generations - including my niece, who just started at UH Manoa."
"They say it's the American dream, but it's just a dream - it's so hard to attain," she said. "We're all chasing this version of success that's linked to college, but the truth is, we were set up. If you don't go to college, it's hard to make a living. If you do, you're buried in debt. By the time we finally pay everything off, our lives have already passed us by."
Students and graduates unsure of their loan status can check their accounts at StudentAid.gov.
- As the U.S. Department of Education resumes federal loan collections in the near future, students and former students face a mixture of uncertainty and apprehension, especially those who rely on these loans for their education.
- In the academic year of 2024, a significant number of students across the University of Hawaii System took out federal student loans, with many deferring their payments until next year due to the pandemic moratorium.
- For individuals like Jen Kim, a single mother of three, the resumption of loan payments will put a heavy burden on her personal finances, as she tries to cover both basic expenses and her eldest son's mounting student debt.
- Ava Song, a medical student preparing to transfer to UH Manoa, juggles multiple part-time jobs while carrying a large student loan balance, hoping for financial aid that will help alleviate her debt burden.
- Alicia Malia, a physical therapist who graduated from UH Hilo, expressed concern for younger generations, including her niece at UH Manoa, as the resumption of loan payments and collections approaches, stating that the current system can leave individuals feeling as if they are chasing an unattainable version of the American dream which is associated with immense debt.
