For some Alaska borrowers, federal student loan forgiveness is a major relief

Briar St. Clair, student debt, student loan forgiveness

Alaskans who hold federal student loan debt may soon feel some relief, based on a move from the federal government to forgive thousands of dollars in debt for eligible borrowers.

Alaskans interviewed for this story said the forgiveness plan would enable them to invest in their futures, from higher education to home building.

For Terelle Sterling, 38, the forgiveness means she’ll be able to put more money into her retirement savings. She’s still in school, studying to be a psychiatric nurse practitioner. Sterling, who lives in Wasilla, was in the military and used her G.I. bill benefits to pay for school but still had to take out loans on top of it, she said.

She knew that the pause on student loan payments was set to conclude soon, meaning she’d have to start up payments again. When the announcement came, it felt like a weight off her shoulders.

“I could feel it,” Sterling said. “Even though I haven’t received it yet, like, I can feel it.”

The Biden administration announced last month that borrowers who make under $125,000 as an individual or $250,000 as a household will be eligible for $10,000 in federal student loan relief, or $20,000 if they received a Pell Grant. The move will impact as many as 43 million people nationally, Biden officials said.

Roughly 67,300 Alaskans owe some amount of money in federal student loans. That includes 23,000 Alaska borrowers who owe $10,000 or less, according to federal data, meaning they could have their federal student loan debts erased entirely if they apply for loan forgiveness and meet the income requirements. The application is expected to be available in October.


There’s a lot of confusion around which loans the program applies to and who is eligible, said Sana Efird, executive director of the Alaska Commission on Postsecondary Education. The commission’s work includes helping with financial access to education and administering scholarships and the state student loan program.

[Who qualifies for Biden’s plan to cancel $10,000 in student debt?]

The government is only forgiving federal loans, which means the announcement won’t apply to Alaska state student loans or private student loans. She said that the commission is directing people to the federal student loan website, at, to get the most updated information and reach out with questions.

“I really would emphasize that this just came out,” Efird said. “It was just announced. There’s still details being worked out.”

Along with the announcement about loan relief, the Biden administration also said it was extending its pause on federal student loan payments through the end of the year. Additionally, some federal loan borrowers might be eligible for a new income-driven repayment plan.

The actions on student loan debt, which reflect a campaign promise from President Joe Biden and were announced just months before the midterm elections, elicited immediate pushback from some and roaring support from others. Republican opponents criticized the plan as being unfair to people who had already paid back their loans and to people who did not go to college. Some have also argued that the loan forgiveness program could add to already rapidly increasing inflation.

Kevin Berry, an associate professor of economics at the University of Alaska Anchorage, said that the concerns surrounding the new program being inflationary are overstated. No one has been required to make a federal student loan payment in two years, so the forgiveness isn’t changing certain people’s spending patterns, he said.

Student loans have held some people back, leading them to delay major financial commitments like buying a car or a house and getting married.

“This sort of relief might push some people to make some of those decisions,” Berry said. “And so we may see upticks in consumer spending, which could potentially lead to slightly higher inflation. But I think either way, that effect is probably close to a wash.”

Even with the relief, the plan won’t benefit everyone, and may only pay off a small share of what they owe.

For Karolina Pavic, 34, a public employee living in Anchorage who has two types of federal student loans she’s been paying off that continue to accrue interest, the forgiveness plan “feels like an insult.”

“It doesn’t feel like anything was forgiven,” she said. “It really does feel like this was a temporary Band-Aid to get votes.”

The new Biden plan will forgive a portion of her loans, but Pavic will still owe roughly $25,000 in various loans — including some, though not all, that could be forgiven later on if she continues to work in the public sector. And Pavic said she knows there are people with immensely higher loans than she took out.

“I think it’s important for different generations to realize just how significant our debt is,” Pavic said.

Briar St. Clair’s student debt will be entirely erased under the new forgiveness program. St. Clair, who works in the legal system and lives in Anchorage, graduated in May and said she plans to to go to law school soon, which she’ll be able to do without debt hanging over her.

“Nothing is final yet, but just thinking about not having to start up those payments and also trying to meet living expenses is really nice,” she said.

Briar St. Clair, student debt, student loan forgiveness

St. Clair didn’t initially plan on taking out loans. She worked full-time through undergrad and tried to pay for tuition out of pocket before she went through her savings.


“I feel like there’s this idea that people who take out loans are doing so just because they’re lazy, and they just want to be like, freeloaders or whatever,” St. Clair said. “But that’s totally not the case.”

She said she doesn’t want to get too excited about the plan, given the potential for legal challenges. But if it does go through, St. Clair said, not factoring in student loan payments means she can pursue a job that betters her community instead of pursuing a job with the highest salary.

Much like St. Clair, Sterling — the prospective nurse practitioner — said the debt relief will allow her to invest in her own future. She’s been putting the minimal amount into her 401(k), but her employer will match what she puts into it, and Sterling said with the loan relief she thinks she’ll able to take better advantage of that benefit.

“I really need to start focusing on older Terelle,” she said. “I’m definitely more focused on retirement. I don’t want to work forever. I definitely want to retire someday.”

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Morgan Krakow

Morgan Krakow is a general assignment reporter for the Anchorage Daily News. She is a 2019 graduate of the University of Oregon and spent the summer of 2019 as a reporting intern on the general assignment desk of The Washington Post. Contact her at