North Texans confront student debt as loan repayments are set to resume

North Texans are confronting the impact of student debt on their wallets, homes, dreams and peace of mind: They will soon be expected to make federal student loan repayments after a three-year pause due to the COVID-19 pandemic.

Many Dallas-Fort Worth residents plan on cutting back on unnecessary expenses. Others are postponing life’s milestones. For some, buying a home and starting a family no longer feel within reach.

Millions across the country are hoping for some relief through President Joe Biden’s student debt cancellation plan. But the move has been blocked by the U.S. Supreme Court months after a handful of Republican-led states challenged the administration’s ability to erase student debt through the Heroes Act.

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The Heroes Act of 2003 authorizes the U.S. Secretary of Education to “waive or modify” student financial assistance programs in the face of national emergencies.

Ginny Wheeler, 33, has about $147,000 in federal student loan debt after earning a bachelor’s degree at the University of North Texas and a master’s at Jacksonville University in Florida.

As a first-generation college student, she wanted to make something of herself. “It was my decision to go to school. It was my decision to pursue my dreams,” she said.

“But I also have other bills I have to pay,” Wheeler said. Now “I gotta face this mountain of debt.” Wheeler remains hopeful that qualifying borrowers like her will get some student debt relief.

One thing’s for certain: Borrowers are anxiously waiting for student loan interest to resume on Sept. 1 and their bills to arrive starting in October, according to the Department of Education’s timeline. Here are the stories of some other North Texas borrowers.

Financial strain

Before starting to teach world geography at Grand Prairie ISD, Joe Farkus was unemployed. He was struggling to pay his bills — including his private student loans, which have largely been unaffected by the pandemic.

“We’re living off of mac-and-cheese bowls,” Farkus said, recalling life at the time.

His new teaching position provided relief. But the financial strain hasn’t gone away. It felt dishonest to remain optimistic in front of his ninth grade students.

Farkus attended Dallas College for the first two years of his undergraduate career. Like thousands of other students who transfer to universities from community colleges, he wanted to cut costs.

After transferring to the University of Texas at Dallas, he studied political science with plans to teach history. It was the path he’d been told would lead to a good life.

In order to pay for school, he went into debt with a mix of federal and private student loans that totaled about $38,000. Applying for federal student aid yielded only a few hundred dollars in Pell Grants, which usually don’t have to be paid back.

Farkus, 28, and his husband fantasize about buying a home, moving out of their apartment of eight years and adopting children. They’d also like to go on the honeymoon they never took. Taking steps toward such dreams, however, has been “almost impossible,” he said.

“You don’t complain about it, but it’s definitely hard to plan for the future,” he said. “It just looks really bleak.”

A monthly bill for 50 years

David Resetar originally planned on leaning on his father to pay for college. But after his father died during Resetar’s sophomore year at UNT, he had to shift gears.

Resetar, 38, juggled multiple jobs and took out loans. He went to graduate school at the University of Denver to study international affairs, where he took out even more loans.

In total, with interest, he expects to pay more than $186,000 over nearly 12 years under his current repayment plan. But following that plan would mean paying more than $1,400 each month after the first year, according to its terms.

Instead, he’s signed up for an income-driven repayment plan — which he plans on reapplying for each year — that will allow him to pay about $300 a month. He’ll be receiving the monthly bill for the next 50 or so years.

“I don’t think about it actually ever ending,” Resetar said. “I don’t see that as a possibility anymore.” Thinking about it as another utility bill provides him some comfort.

Still, Resetar doesn’t blame his younger self for choosing experiences over economic freedom — even if that means resisting how long he can go without turning on the air conditioner in Texas’ summer heat.

If he wasn’t in such debt, he’d likely buy a house or condo, go back to graduate school to learn more marketable skills and pursue romantic relationships, which he tends to avoid out of fear of what people would think of his debt. “I think I have come to terms with that,” he said.

Feelings of regret

Damon Mitchell, who moved to Dallas last year, was two years younger than most of his peers when he graduated high school. The Detroit native felt lost. People kept telling him to go to college, but Mitchell wasn’t keen on continuing his education. He did it anyway, taking out his first loan at 16.

After two years at a community college and a stint in the military, he enrolled at Wayne State University, a public institution in Michigan. He changed majors four times. “I was just wandering,” Mitchell, 30, said. “I still didn’t know what I was doing there.”

What he now considers a “complete waste of time” stuck him with about $100,000 in federal and private student loan debt. With the three-year pause on federal student loan repayments — which make up most of his debt — he only had to worry about paying less than $200 a month toward his private loans.

The pause allowed Mitchell to move to Nashville, explore different career paths and make his way to Texas to work at a nonprofit. Now that federal loan repayments are set to resume, he’s considering enrolling part-time at a community college to continue deferring his payments.

Mitchell looks at the financial consequences of the decision he made before he was an adult. Now he only feels regret.

Getting ahead

When Allen Whitelock’s daughter, Alli, enrolled in college, she opted to attend the University of Tulsa. The private university in Oklahoma offered to cover half of her tuition, but she still needed to come up with the rest.

Whitelock, 52, and his wife took out $125,000 in federal loans designed for parents to help cover school costs. After Alli graduated, they began repaying. The bills were almost equivalent to their mortgage payments.

Then the pause on repayments began. But for the next couple of years the parents continued to pay off the debt, often paying more than the minimum requirement. The accrual of interest had temporarily stopped, after all, and they wanted to take advantage of that.

As of today, they’ve paid off more than 40% of their debt. Whitelock expects the debt to be cleared in less than five years.

“It’s an obligation. We signed up for it,” Whitelock said. “We want to get it over and done with it. We don’t want it looming over our heads when we get to retirement.”

CORRECTION, 10:07 a.m., June 30, 2023: An earlier version of this story inaccurately portrayed Joe Farkus’ current financial strains. He and his partner previously lived off of mac-and-cheese bowls while Farkus was unemployed.

The DMN Education Lab deepens the coverage and conversation about urgent education issues critical to the future of North Texas.

The DMN Education Lab is a community-funded journalism initiative, with support from Bobby and Lottye Lyle, Communities Foundation of Texas, The Dallas Foundation, Dallas Regional Chamber, Deedie Rose, Garrett and Cecilia Boone, The Meadows Foundation, The Murrell Foundation, Solutions Journalism Network, Southern Methodist University, Sydney Smith Hicks and the University of Texas at Dallas. The Dallas Morning News retains full editorial control of the Education Lab’s journalism.