• High interest rates on student loans prevent borrowers from repaying their original debt.
• Insider spoke to two borrowers struggling with “crippling” student debt, in large part because of interest.
• They have both paid off almost all of their original debts, but still owe thousands of dollars more.

Alexandria Mavin heard from her high school teachers that there was a path to the American Dream. If she went to college, graduated, and got a clerical job, she would get there. She graduated with $ 117,000 in student loan debt as a down payment for that dream.

Now 32 and a property manager, she has repaid $ 70,000, but still owes $ 98,000 from her undergraduate education, and says she “absolutely” regrets seeking an education.

“I’ve paid off almost all of my loans, but I still owe the full amount,” Mavin told Insider. “It’s a never-ending cycle.”

Mavin speaks of interest. This is why many borrowers find it difficult to keep their payments under control or eliminate their debts. Much of the $ 1.7 trillion student debt crisis is due to rising interest rates every year, so even borrowers who regularly pay off their debt face high interest rates that keep their debt level. what they initially borrowed – or more.

After President Lyndon B. Johnson passed the Higher Education Act of 1965, banks began to raise interest rates on student loans, and the system benefited lenders at the expense of debt and default. paying more and more borrowers, Insider reported. This has created a prison for many borrowers who think they will never escape.

Mavin’s student loans are owned by four service officers, and only one – FedLoan Servicing – was included in the federal pause on student loan payments and interest during the pandemic. But even so, Mavin said that being interest free on even one of her loans saved her $ 377 per month, which she invested in savings and helped her pay off. all of her hospital bills for giving birth during the pandemic.

“It just shows how without student loans I can afford a living,” Mavin said.

“I am financially crippled by crippling debt”

Daniel Tapia, 41, obtained a bachelor’s degree in dental hygiene ten years ago, the first in his family to do so. Since then, he told Insider, he drives used cars, lives in “rotten” apartments, and has returned to live with his mother thanks to the growing student debt he has been trying to pay off for 10 years.

“I am financially crippled with crippling debt and cannot move on in life,” Tapia said. “Murdered by the student loan industry.

To pay for her bachelor’s degree, Tapia borrowed $ 60,000 in private student loans with an interest rate of 9%, and her student debt currently stands at just under $ 86,000, of which $ 22,000 is government owned, even after making a decade of monthly payments.

“What I don’t get is if I withdraw a certain amount, and I’ve already paid that amount, and still owe more than I originally owed, it’s just crazy, ”Tapia said. “It’s mind-boggling to me that this total amount isn’t going down. It’s not going to go away.”

Insider recently reported that even though federal student loan payments were suspended during the pandemic, many borrowers who made at least one payment during the hiatus were “underwater,” meaning they didn’t even have to pay. not $ 1 less than their original balances, keeping some in an endless repayment cycle.

For many, canceling student debt is the only way out

Although President Joe Biden campaigned for the cancellation of $ 10,000 in student debt per borrower, Mavin said it wouldn’t even be “a drop in the bucket.” She said Massachusetts Senator Elizabeth Warren and Senate Majority Leader Chuck Schumer’s alternative plan to write off $ 50,000 per borrower would help “tremendously.”

Some colleges have used stimulus funds from Biden’s US bailout to write off institutional debt or student debt owed to schools, and Biden has even written off student debt for some groups of borrowers, but a student debt forgiveness large-scale has not yet taken place.

Biden has asked the Education and Justice Departments to review his executive authority to set aside $ 50,000, but months have passed and it is still unclear where these reviews stand.

“I got so much interest that I paid off the majority of my loan, but yet the banks benefit, not me,” Mavin said. “I’m afraid it’s a never-ending cycle where I can’t give my daughter the life I want to give her and I can’t give myself the life I want to give myself.”