65-Year-Old Celebrates After $119,500 Student Debt Forgiven, Plus $56,801 Refund

Marlon Fox, a 65-year-old chiropractor from Charleston, South Carolina, has been paying down his federal student debt since 1988. He simply had no idea when it would finally come to an end. However, on August 25, 2023, he got an email that said, "Your student loans have been forgiven!" On that day, his $119,500 balance was reset to zero. He also got a refund of $56,801.

"I couldn’t believe it," he told CNBC. "I’d been battling this for so long. I’ve been on cloud nine ever since," he added.

After the Supreme Court put an end to the Biden administration forgiving student loans in June 2023, it has looked at how the education debt can be lowered for people. One of those strategies has been to take a look at the accounts that have been paying their repayments for decades. Under the U.S. Department of Education's income-driven repayment plans, student loan borrowers can get their loan forgiveness after 20 to 25 years. However, many are yet to see their debt forgiven.

"This is due, in part, to strong financial disincentives for student loan servicers to inform consumers about the program and their ability to qualify for it," said Nadine Chabrier, a senior policy and litigation counsel at the Center for Responsible Lending.

The Education Department contracts with various companies to service its federal student loans. These companies include EdFinancial, Mohela, and Nelnet who are paying more than $1 billion a year.

Marlon Fox had been paying his debt for around 35 years and his accounts had been managed by at least three different companies in this time. "We are incentivized to meet the requirements that the government sets, which includes giving borrowers the benefits that the law provides," said Scott Buchanan, executive director of the Student Loan Servicing Alliance. "We are audited, and get business or lose it based on meeting those standards," he continued.

According to reports, the Education Department has forgiven debts worth $45 billion for about 930,000 people. Some people also got forgiveness after they overpaid their debts for years. Fox had originally borrowed $60,000 to attend Palmer College of Chiropractic. Shortly after he graduated, his monthly student loan bill was around $1,000. He was still settling into his new career and struggled quite a lot to get that sum every time.

He later became the main caregiver of his father after he had a stroke, which made things even harder for him. At the time, Fox even had to enroll in forbearances, which caused his balance to mushroom. This strategy helps borrowers keep loans on hold for three years, however, the interest only continues to build. Fox made payments, whenever he could and enrolled in an income-driven repayment in the mid1990s after Congress established the first one, that year. Time flew, and it was now time for Fox's children to attend college while Fox was still paying his student loan. He even wrote to his House representatives and senators however that never really helped.

Fox is extremely pleased with the Biden administration's work and said that no other administration before this was willing to correct the wrongs. "They say, ‘Hey, you got your school loans paid off? That’s unfair,'" Fox said. "But if they let me tell my full story, then they understand."

Over the decades, he has paid over $200,000 on his federal student loans. He says that these large bills have resulted in really low savings. "I’ll probably always work," he said. Now that he is loan-free, he and his wife have planned a trip to Maui. This will be the couple's first trip in years. As for the refund, he used it to pay for his children's student loans.