Kari Boudreau did everything by the book when it came to her student loans. She still couldn’t stay ahead of her debt.
A self-proclaimed rule follower, Boudreau was the first in her working-class Northfield, Minn., family to go to college, earning a degree from Iowa State University that led to her building a successful chiropractic business.
Getting there, though, meant taking on loans. What started out as $139,000 in federal student loans became $600,000. This happened because of a combination of loan consolidation, forbearance, having her loan sold from one servicer to another, interest capitalization — when a loan’s unpaid interest is added to the loan total, or principal — and moving to an income based repayment plan.
Boudreau, 53, is among a growing legion of people in Minnesota and across the nation now hoping President Joe Biden will take steps to ease what’s become a massive student debt problem. Supporters say that debt, more than $1.6 trillion currently, is holding back the American economy, keeping people from buying homes, getting married and otherwise taking their next steps in life — and affecting Black and brown borrowers in unequal ways.