A Gen Xer who got $250,000 in student loans forgiven said he can now finally start saving for retirement — and consider his dream of studying in India

• Joel Lambdin, 49, received $250,000 in student-loan forgiveness in January.
• It’s a result of the Education Department’s one-time account adjustments. 
• Lambdin said the relief will allow him to save for retirement while considering longer term dreams.

Joel Lambdin finished graduate school in 1998 — but as a professional musician, he was hardly making enough money to pay off his student loans and his other bills.

So Lambdin, now 49, said his only option to make ends meet was to put his student loans on forbearance — in which he was not making payments, but interest was still accumulating.

“It was just so that I could subsist, so that I could survive,” Lambdin told Business Insider. “With the hope that at some point, I would be making enough money that I would be able to take them out of forbearance and start paying them down.”

But he grew to realize that the only way he could make a significant dent in his student loans was by switching careers. Since he didn’t want to do that because he loved working in music, he decided to keep his larger student loan in forbearance and begin paying off his smaller loan with a lower monthly payment.

He continued making those payments until the pandemic student-loan payment pause, at which point he and his wife started making a plan of action to tackle the larger debt once the pause ended. That led them to discover the Education Department’s one-time account adjustment initiative, which allowed the department to evaluate borrowers’ accounts and update payment progress toward forgiveness on income-driven repayment plans and Public Service Loan Forgiveness, including any payments made during a forbearance period.

That account adjustment led to a letter Lambdin received, reviewed by BI, from his student-loan servicer Aidvantage on January 31 stating: “Congratulations! The Biden-Harris Administration has forgiven your federal student loan(s) listed below with Aidvantage in full.”

For Lambdin, that letter meant his $249,255 outstanding student-loan balance was effectively wiped out.

“It had started to feel like my fate was being decided for me by the cold hand of finance,” Lambdin said, “and that was a weight that I didn’t realize was there until it wasn’t there.”

“The feeling was much more like putting down a backpack that was really full of books that you got used to. And then you put it down, and you’re like, ‘Oh, man, that feels so much better.’ It’s more like that, rather than sort of a jump-for-joy kind of situation,” he said.

While Lambdin is still working to determine what exactly the relief will mean for him and his wife, he said that discussing retirement is “a much more present conversation now” because contributing to savings is viable after the relief. He can also begin to look into buying a home.

The Education Department continues to cancel student-debt through its one-time account adjustments, a process it plans to complete this summer. Most recently, the department wiped out $7.4 billion in student debt for 277,000 borrowers, some of whom benefited from the adjustments.

Beyond financial goals, Lambdin said the relief is also allowing him the freedom to pursue some of his long-term dreams, including taking a sabbatical to study with his meditation teacher in India.

“It’s something that I wouldn’t have been able to even consider doing if we had to pay off student loans, but without them, it’s something that I can really seriously consider doing,” he said. “And so those are the kinds of things that I think get really lost in the monetary side of the conversation about debt relief.”

‘I’ve been really lucky’

While Lambdin said he feels as though he earned the relief given his decades of payments, he also recognized that it’s not that easy for many other borrowers.

For example, as BI has previously reported, some borrowers who might qualify for relief through different repayment programs may not have gotten it yet due to paperwork backlogs and administrative errors. On top of that, funding for federal student-loan servicers is strained — meaning many borrowers face hourslong hold times and cannot get clear answers regarding their payment progress from customer service.

“There are some real horror stories out there, and I’ve been really lucky in that I haven’t experienced the kinds of shenanigans that other people have experienced,” Lambdin said. “So I actually feel very lucky that things have transpired the way they have.”

Some of those horror stories include inaccurate payment projections and delayed billing statements. When it comes to student-loan forgiveness, some borrowers told BI that their servicer made a mistake with the forgiveness, reinstating their payments months later.

The Education Department has said it’s aware of the challenges borrowers face and has established an accountability framework to punish servicers when they fail to fulfill their contractual obligations.

The department is also in the process of crafting its new student-loan forgiveness plan — it recently released the draft text of the rules, which included relief for borrowers with unpaid interest and those who have been in repayment for at least 20 years.

As for Lambdin, he’s still figuring out how to approach life without student debt hanging over his head. But now he can consider a range of options, and he can thank the loan forgiveness for that freedom.

“There’s a certain amount of waiting for the other shoe to drop because it’s not that I don’t trust that it’s happening, but just that the debt has been with me for so long, and then it’s not there,” Lambdin said. “And it’s something that I think really takes some getting used to.”