Mary Jo Gonzales borrowed about $90,000 to earn the graduate degrees that would allow her to pursue a career in higher education.
A year or so after she received her doctorate from Washington State University, in 2002, she consolidated those various loans and a decade’s worth of accumulated interest into one large lump sum – about $133,000 to be repaid over 33 years.
This year, after her retirement from a distinguished career serving first-generation and low-income students in higher education and after making payments for more than two decades, her remaining principal was $94,000.
“During those 20 years,” she wrote in a recent social media post, “I repaid more than two times the original loan balance.”
Gonzales, who retired for medical reasons as vice president of student affairs at Washington State University last November, recently was approved for the Biden administration’s expanded student loan forgiveness program.
She posted about it on LinkedIn, and her words went viral – the story of a university vice president whose student debt outlasted her career reached more than 10,000 people, she said last week. She’s heard from people all over the country who are carrying massive debt while making little progress on the hamster wheel of interest payments.
Gonzales knew she was taking on a long-term responsibility when she borrowed to get an education. She hadn’t realized at the front end, though, how high interest and lower income-based payments would combine to make it so she literally did not put a dent in the principal year after year.
“I knew I was mortgaging my future,” Gonzales said. “What I didn’t know was how that interest would escalate my loan payment. … I really thought I could pay it off sooner.”
Gonzales made a very good salary since 2017 at WSU – more than $270,000 in her final year. She understands that many people might look askance at her receiving loan forgiveness.
But her circumstances were complicated when she came down last year with sepsis, a serious blood infection from which she’s still recovering. And the loan forgiveness program is not intended as hardship relief, but a way of encouraging people to go into fields like education or nonprofit work and rewarding those who are diligent about repayment over at least a decade.
The repayment amount for her consolidated loan was based on earlier, much lower incomes, she said. During the past few years at WSU, she continued making those automatic payments while trying to eliminate other debts and pay for her daughter’s undergraduate education at WSU, she said.
At age 53, she planned to keep working and paying off the loan. But when she was forced to retire, her income vanished and future job prospects became uncertain.
“I didn’t make the decision to apply for federal loan forgiveness until I couldn’t work in my position anymore,” she said. “I was mortified that I couldn’t continue to pay it the way I had intended to.”
Her debt was erased under a temporary expansion of the Public Service Loan Forgiveness program, which forgives student loan debts for people in public-service jobs who have made payments for at least a decade, while meeting other conditions.
The program was temporarily expanded last year to allow people to seek waivers for exceptions – such as a missed payment or the forgiveness of a type of loan previously not included.
Before 2021, more than 460,000 people had their debt forgiven, which represents less than 3% of all applicants, according to the Education Data Initiative. In 2021, another 30,000 borrowers had their debts forgiven under the temporary expansion, with an average debt of more than $66,000.
Less than 7% of eligible borrowers apply. One reason Gonzales shared her experiences publicly was to let more people know they may qualify, she said. The expanded PSLF guidelines are set to expire later this year.
Gonzales received her approval on June 5, letting her know that her student loan balance had been reduced from more than $94,000 to zero.
“There had always been this backpack on my back,” Gonzales said. “It was amazing to be able to put it down after 20 years.”
Gonzales’ experience says a lot about the way our system of higher ed works – and doesn’t work – for young people without means or a family tradition of attending college.
After decades of declining state support for colleges, and a steep erosion of nonloan aid such as the federal Pell Grant, the educational pathway for first-generation, low-income students is simply littered with ways to accumulate debt – some of which are more expensive than others.
Gonzales grew up in Hollister, California, and her family worked in the area’s agriculture industry; she graduated with a bachelor’s degree from San Jose State University with relatively little debt – just $5,000.
But she wanted to go on to a career in academia, helping to support students of color, low-income students and others who struggled to succeed – students who faced some of the same challenges she had as a first-generation Mexican American student.
To do this, some of her borrowing was unsubsidized. Interest on those unsubsidized loans began accruing right away, and continued to do so over the course of the next nine years, as she worked toward a master’s and then a doctorate while raising her daughter as a single mom. This unpaid interest grew and grew, and was eventually tacked onto the principal.
She knew these loans would take a long time to repay. But, like many students who come from low-income, paycheck-to-paycheck backgrounds, she didn’t have a full understanding of the long-term consequences and the effects of high interest rates.
And college itself is simply loaded with costs that can take students with little support by surprise – extra materials for class, the expectation of working unpaid internships, even graduation itself is expensive. She felt compelled to go into a career helping those students.
“I saw my debt as a part of my investment in being able to do what I was called to do,” she said.
‘I’ve worked my whole career’
After graduating from Washington State with a Ph.D. in educational leadership in 2002, she got a job at Dickinson State University in Dickinson, N.D., as its director of TRIO programs to support disadvantaged students.
That was when she consolidated her loans, and set up the income-based payment. She had a total of $119,000 in loans; the unpaid interest from her unsubsidized loans was then capitalized and another $14,000 was added to the principal.
Full payments would have been impossible on her salary at that point; her 33-year repayment agreement called for monthly payments of $700 – 15% of her income.
Her career proceeded, and she took on bigger jobs with more responsibility. At Iowa State, she oversaw a campuswide program to help support and retain low-income, first-generation students and students of color. She became dean of students at the University of Rhode Island, and was temporarily vice president there.
Her payment was adjusted upward to $827 in 2008, which was 10% of her income at that point; it had not been adjusted since. She returned to WSU in 2017 as vice president of student services.
As a university administrator at different schools, she said, she often felt alone among decision-makers in understanding how casual, continual increases in tuition and fees affect students who come from poverty. While some of her colleagues minimized the impact of seemingly small cost increases, she knew about the long-term ramifications because she was still making monthly payments on hers.
Her background, and her continuing loan debt, served as a reminder of what she calls “one of the most fundamental leadership lessons about” college affordability – the enormity of the gap in experience between those who arrive from generational poverty versus those with generational wealth.
She said that she believes it’s important as a matter of principle to pay debts, and that she felt some guilt about seeking loan forgiveness. But as she noted, she has paid more than twice the original principal – while still owing essentially the same amount.
Gonzales’s loan was forgiven, but she also feels her debt was paid – through the huge interest payments, through her service to college students, through philanthropic work she has done.
“I had to rationalize in my head that it was OK,” she said. “People see ‘loan forgiveness’ and think it’s a gift. No, I’ve worked my whole career to pay off that loan.”
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