By Izabella Canales, Malak Makled, Rachel Alexandre, Anuva Wardah and Nerissa Martinez, who are a part of Stony Brook University’s Center for Civic Justice. Photo by STMDragons/Wikimedia Commons.
Since 2000, the United States national debt has increased by nearly $23 trillion, reaching $33 trillion in September of 2023. The accrual of national debt is similar to a person using a credit card for purchases and not paying off the full balance each month — the amount of money owed increases along with a monthly interest rate, which now stands at 2.97%. The national debt’s all-time high keeps the government from passing relief programs — like student loan forgiveness — as these programs would further the issue.
In recent years, student loan forgiveness has been a hot button issue. President Joe Biden made a campaign promise in 2020 to pass legislation that would forgive up to $20,000 for qualifying borrowers. This program was denied by the Supreme Court, claiming that the legislation exceeded the executive branch’s power and would’ve been far too expensive. The ruling left many Americans disappointed, leaving them with no choice but to attempt to pay off their loans.
According to the Education Data Initiative, “the average federal student loan debt is $37,338 per borrower.” Also according to the Initiative, 45.3 million borrowers have student loan debt. Such high student debts drastically increase the national debt. The cycle of federal student loan debt and repayment causes further debt for the U.S. This is because the amount of funding for new student loans often exceeds the amount of repayments from pre-existing loans, requiring the federal government to borrow the difference.
Policies that enable lower interest rates or student debt relief programs would then allow borrowers to spend in other areas, promoting economic prosperity for the country. And that is what most borrowers want. The goal for American students is to live a debt-free life. These hopes are not only limited to the students who are unable to pay off their loans, as Americans who are experiencing the underlying issues that fiscal budget and national debt are contributing to also want a solution for the problem.
Cindy Zuniga-Sanchez, a first-generation college student, graduated from Stony Brook University in 2012 and went on to attend Benjamin N. Cardozo Law School. Although she was able to secure a high-paying job right after graduating law school, she had also accumulated over $200,000 in student loan debt. With little to no financial literacy prior to graduating, Zuniga-Sanchez educated herself and tried to pay off her debt in the least amount of time possible. Once she learned about finances and created a “money plan,” she paid off her student loans and credit card debt in four years.
Growing up in a low-income, Latino household in The Bronx, finances were never discussed. During her financial journey, Zuniga-Sanchez turned to books and podcasts for answers to help tackle her debt. Shortly after, she started an Instagram account to keep herself accountable and on her debt-free track. However, she noticed very few books and podcasts were written and produced by women of color. In order to give back to her community and empower people through financial education, she wrote Overcoming Debt, Achieving Financial Freedom: 8 Pillars to Build Wealth — the book guide to financial freedom, no matter what that freedom looks like.
Her book is a guide for those who may not know where to start on their financial journeys. She refers to these steps as the “8 pillars to build wealth.” “I thought about what information I wanted younger me to know to create a financial foundation,” Zuniga-Sanchez said. She found that budgeting is the foundation to the start of any financial journey, and went on to start a coaching company named after the budgeting technique that helped her become debt free — “zero based budget.”
In her book, she shares personal experiences of her money habits in college, law school and career. She reminds the readers that it is important to acknowledge their own mistakes and learn from them rather than avoid them. She did the same with her own debt after having her “aha” moment in 2017.
“Student loans are a part of the national budget,” Zuniga-Sanchez stressed. “Government decisions are going to directly impact borrowers, because what kind of new interest rates and terms and conditions will they have?”
Zuniga- Sanchez shared her experiences with us by informing us on the partisan Public Service Loan Forgiveness (PSLF) plan that has allowed many of her friends within the public sector to be forgiven of their loans. She stated, “These intentional loan forgiveness programs benefit our larger economy because they put more money in borrowers’ pockets and that money in turn can be put towards buying a home, invest in our economy.” The government needs to decide to either create better forms of repayment or make these resources more known to the public. In recent months, the talks of a student forgiveness program provided a lot of hope for Americans who are struggling to pay off their loans. However, when the Supreme Court struck down the proposed program, it caused a huge let down. Zuniga-Sanchez is hopeful to see the previous PSLF being polished up for some of the qualifying borrowers that haven’t been able to obtain it.
Zuniga-Sanchez also explained how a lack of financial literacy contributes to the ever-increasing national student debt. During her time at Stony Brook, she received no education on fiscal policy. But, as an intern for Senator Chuck Schumer, she worked on the Dodd-Frank Act, a financial reform act to prevent the unrestricted risk-taking that led to the financial crisis of 2008. She was proud to say that, by working on that law, she could “see the positive effects that this type of legislation has had on economic policy.”
Being a student during the Great Recession exposed her to that type of federal legislation that helps to protect the everyday consumer. By paying attention to the acts being created, we can keep implementing policies that pertain to issues that are important to us like student loan debt.
Alongside her emphasis on the importance of financial literacy, Zuniga-Sanchez said that one of the main things people can do is “look into candidates that are looking into expanding the loan forgiveness program and vote.”
“We vote and advocate,” she said. By voting,“we tell the government how valuable education is to us, which can indirectly lead to student debt relief.”
To combat the issue of student loan debt onto the national debt, young voters in higher education are highly encouraged to advocate for education reform to secure their own financially-stable future. Zuniga-Sanchez stressed for young people to advocate for themselves and elect representatives into office that reflect their beliefs. Change does not only occur at the legislative level, but on a smaller scale too. Having open conversations on finances within communities can help take away the taboo that surrounds discussing money matters. Even small actions such as taking a few minutes out of the day to further your financial literacy and check up on ways to save can go a long way, and those actions can become stable habits.
“Financial freedom does not mean having a specific dollar amount in the bank,” Zuniga-Sanchez said. “Financial freedom is seeing money as a tool, rather than a burden.”