From the outside, it may look like Alan Roseto is living the American dream.
He and his wife, Katie Gray, own a picturesque home in Catheys Valley with a rustic blue exterior and floor-to-ceiling windows in the rolling Sierra foothills just southwest of Mariposa.
“We got it right before prices boomed,” said 54-year-old Roseto.
They have a rambunctious 3- and 5-year-old. And on their 17 acre lot they even have a makeshift farm with more than 20 goats, chickens and a rescued pig named Rosie.
“Kids like them, they’re cute,” he said. “We like them, they’re cute.”
But the dream stops at a number hanging over his head that isn’t so cute: Roseto has $106,000 in student loan debt.
“I didn’t really think about trying to pay it while I was in college,” he said. “I just figured, once I got out of college, I’d start paying the tuition as I went.”
Roseto got his undergraduate degree in wildlife biology 20 years ago at Colorado State University. Later, he went back to school for an online master’s in environmental law and policy. Now, he’s working as an environmental scientist for the state.
If all went according to plan, the debt Roseto took on to get through and build a career would sort itself out if he had a way to pay as he can. But in February, a judge determined the income-based repayment plan he had enrolled in was unconstitutional.
Although the repayment plan had been held up in courts for years – prompted by a lawsuit filed by a handful of states during the administration of President Joe Biden – the judge who made the ruling ending the plan had been appointed during the first administration of President Donald Trump.
And just this month, the U.S. Department of Education was ordered to cut its staff by nearly half – a move that is poised to have an even bigger effect on federal student loan programs.
Just like millions of student loan borrowers, Roseto is left wondering what’s next for his debt.
“It’s out of my control,” Roseto said. “The unknowing is just really uneasy and I’m not sure what’s going to happen.”
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From Biden’s to Trump’s policies
For two decades, Roseto paid his monthly payments like clockwork. Then, two years ago he enrolled in the Saving on a Valuable Education (SAVE) repayment plan. The plan was created by the Biden administration.
It takes into consideration discretionary income and the size of a family to determine how much a monthly payment will be, just like all “income-driven” repayment plans.
But payments on the SAVE Plan are typically calculated to be a lower proportion of salaries than similar repayment plans. As a result, payments for many of the roughly eight million borrowers who signed up for the plan were halved. Some payments were even expected to be reduced to zero. The plan also offered debt cancellation for those borrowers who had paid for at least 10 years.
But, shortly after Biden signed the executive order, several states sued the government, alleging the plan was unconstitutional because it hadn’t been passed by Congress. In February, a Trump-appointed judge upheld the court ruling that determined the SAVE Plan was unconstitutional.
About a week after last month’s ruling, online applications for the SAVE Plan quietly disappeared, along with applications for three other income-driven repayment programs. The federal aid website states this is only temporary.
The remaining repayment plans are “fixed,” meaning the monthly payment is calculated based on the total student loan debt a borrower has to pay it off in 10 or 25 years. These plans are likely to cost more per month and provide no forgiveness than those based on income.
Adding to the confusion of student loan borrowers, Trump has also vowed to eliminate the Department of Education – which could make big changes to student loan programs. This is different from what Trump did last time he was in office.
Back then, “inaction was his way of action,” said Ronny Lau, the manager of government relations for the National Education Association. As the nation’s largest labor union, the association advocates for public education employees and educators. As for Trump’s record in his last term, Lau said “more than anything it was status quo and just moving things along.”
But during Trump’s most recent campaign, he criticized loan forgiveness.
“He doesn’t believe the federal government has a place to put folks out of their debt on this issue,” Lau added.
Consequences could be acute in the Valley
Changes to student loan repayment and forgiveness may especially affect borrowers in the San Joaquin Valley. Here, the percentage of residents with student loans is around the state average — about 12%.
But Valley salaries are far lower than the state median. In 2022, annual median salaries by county were anywhere from $15,000 to $27,000 less than the state’s median income of $91,551.
“We don’t have jobs that are as high income as in other places,” said Charlie Eaton, a sociology professor at UC Merced. “So people might be taking on loans without a guarantee that they’re going to make enough money to pay those loans back.”
Despite the president’s rhetoric, Eaton thinks one program likely won’t go away — the Public Service Loan Forgiveness plan. It forgives a borrower’s loans after they’ve worked for a government agency or non-profit for 10 years, or made 120 payments. Eaton said many in the Valley work public service-related jobs like teaching, law enforcement, and government work, and could benefit.
“That is a program that was established by Congress,” Eaton said. “So it can’t necessarily be just eliminated by executive action by President Trump.”
However, Trump is trying to narrow the amount of people who are eligible for it. Earlier this month, Trump signed an executive order that excludes people from the public service forgiveness program who work in organizations that perform “activities that advance illegal immigration, terrorism, child abuse, discrimination, and public disruptions.”
Borrowers affected by this order most likely work in the activism-based non-profit sector.
Roseto is enrolled in the Public Service Loan Forgiveness plan now. But he was only able to make six qualifying payments before his payments were paused by the COVID-19 pandemic emergency; and then the lawsuits against the SAVE plan. He’s still hoping that plan is his saving grace.
“I just feel like I’m never going to pay [my loans] off,” Roseto said. “I’m like, ‘why even make payments, unless the public loan forgiveness program actually does what it’s supposed to do?’”
Waiting for what’s next
In Catheys Valley on a recent day, the sun is going down and the rain patters on Roseto’s big windows.
The house is full of explosive laughter and giggles as the family stays in for a game of hide and seek.
These days, Roseto has an easier time finding his kids crouched in the princess castle or under the dining room table than finding out what’s next for his loans.
He said with every change in government administrations comes a new service provider, and new policies that affect what he’s paying and when. He said he’s only been able to make payments on the interest in the loan.
“The whole payment plan changes and then a year later they’re done and it goes to somebody else and the whole thing starts all over again,” Roseto said. “[My debt is] just sitting there at the same amount all the time.”
His confusion is not unique. Lau, the manager of government relations, agrees it’s hard to learn how to grapple with the whole system, no matter who you are.
“I think anybody who navigates the student loan system [knows it’s] a very complicated system,” Lau said. “Imagine somebody who’s rosy-eyed coming out of college at 22, who may not have a lot of financial literacy. It’s a daunting task.”
Still, Roseto is happy he at least doesn’t have to pay his loans right now. Once the payments start back up, he and his wife, Gray, fear they won’t be able to save much college money for their kids. “With the loan payment, that just cuts even more into our monthly income and then we don’t have any to put aside for a savings plan for the kids or our general savings, even,” Gray said.
