Student loan payments squeeze Long Island borrowers
A commuter walks past the headquarters of the U.S. Department of Education, where a major shakeup by the Trump administration has many student loan borrowers concerned. Credit: AP/Mark Schiefelbein
Julie Charczuk never thought that paying for her graduate degree would mean giving up the chance to have a second child.
At 41, the speech pathologist lives with her husband in Southold, where they continue to pay down their $3,400 a month mortgage, even as she's spent years making payments on her student loans — at one point, more than $900 a month.
Even now, with payments down to $500 a month, she said at least $80,000 in student loan debt keeps her living paycheck-to-paycheck, unable to expand her family, build savings or plan for the future.
"I can't have more than one kid. I can't afford it," said Charczuk, who has a 12-year-old son and makes a little more than $92,000 a year. "There's no way we would be able to afford two."
Charczuk is one of millions across the country facing steep monthly student loan payments as the nation grapples with the end of pandemic-era pauses and confusion over how federal policy changes might impact borrowers amid the Trump administration's efforts to dismantle the Department of Education.
A new analysis published by the Federal Reserve Bank of New York estimates that more than 9 million borrowers could face significant drops in credit scores in the first half of 2025 as delinquent federal student loans begin reappearing on credit reports.
Starting in March 2020, the federal government suspended payments and interest accumulation for federal student loans, causing the delinquency rate to fall below 1% by November 2022, according to the bank.
Payments resumed in October 2023, with an on-ramp protecting student borrowers from negative credit reporting until September 2024. It takes at least 90 days of missed payments to be considered delinquent, which means adverse credit reporting is only now appearing for some, the New York Fed said.
“A lot of what I’m telling clients is, ‘Let’s not panic; we don’t know what the solutions are yet, because we haven’t been given any guidance on what those solutions will be yet,’” said Ryan Derousseau, a financial planner at Hauppauge-based United Financial Planning Group.
Some borrowers are experiencing sticker shock after returning to making monthly student loan payments, he said, adding that he has a number of clients — and their children — in income-based repayment plans who fear they’ll suddenly owe payments they can’t afford.
“Right now the unknown is what, I think, is creating more panic than anything else,” he said.
Student loan payments affect a significant number of Long Islanders given how many residents have college educations. On Long Island, approximately 1.3 million people have a bachelor's degree or higher, according to census data.
Across the state, more than 2.4 million borrowers held a cumulative $90.1 billion in federal student loan debt as of Sept. 30, according to federal data.
In 2018, nearly 18% of Long Islanders had student loan debt with an average balance of $35,100, according to the most recent data available from the New York Fed.
At least for now, New York State is below the national average when it comes to borrower delinquency. New York's delinquent rate was 0.9% at the end of last year compared to the 1% national average, according to an analysis of New York Fed data by Alex Young, assistant professor of accounting at Hofstra University.
Yamina Hashmi, student assistance program manager and counselor at United Way of Long Island, said her agency is unsure of how student loan policy will continue to shift in the future.
Her clients have been asking how changes to federal student loan policies will impact them, she said. She advises them to “ride the wave and see how everything plays out,” and seek counseling before making major decisions about loans, she said. Borrowers should also make sure they understand the details of the loans they’re taking, Young added.
Billy Riedel, 29, of East Northport, teaches at John Glenn High School. He said he tells his students to be mindful about how student loans could impact their financial future before they borrow.
“I like to talk to them about, yeah, it’s great, you could wear the U Miami sweatshirt, but when you leave there, you might have a little more debt” than attending a state school, he said.
Ayobami Adebowale, 28, a biomedical engineer, grew up on Long Island before moving to Washington, D.C., for a job with the Food and Drug Administration. She’s now moving to New Jersey as she starts a new position with Johnson & Johnson.
The federal approach to student loans right now is “confusing,” she said. Her recent application for an income-driven repayment plan was processed but has not taken effect. She’s currently paying nearly $600 per month toward her loans.
“It’s frustrating. I just want to know what to pay,” she said, and she’d like to pay the lowest amount, especially as the cost of living rises.
Besides student loan debt, Long Islanders are facing a “crisis of affordability right now,” said Matt Cohen, president of the Long Island Association, a leading regional business nonprofit.
“In our region, we have some of the highest costs in the country,” he added, citing rising price tags on housing, energy, transportation and child care.
Robert Riley, an economics professor at St. Joseph’s University, said that the return of student loan payments is coinciding with a general decline in savings and rising credit card balances for many people.
Combined with the uncertainty from Washington, “all that could combine to [reduce] consumer spending,” he said, which could be “problematic” for the economy.
The federal government needs to facilitate solutions to make it easier to pay off student loans while managing the growing cost of living across the nation, and especially on Long Island, Cohen said.
But, in the meantime, many borrowers paying down studentdebt continue to struggle.
“Everything is so expensive, truly too expensive, and everyone’s like, ‘You should be saving money,’” Adebowale said. “What money? ... I make good money but I still live paycheck to paycheck.”
Julie Charczuk never thought that paying for her graduate degree would mean giving up the chance to have a second child.
At 41, the speech pathologist lives with her husband in Southold, where they continue to pay down their $3,400 a month mortgage, even as she's spent years making payments on her student loans — at one point, more than $900 a month.
Even now, with payments down to $500 a month, she said at least $80,000 in student loan debt keeps her living paycheck-to-paycheck, unable to expand her family, build savings or plan for the future.
"I can't have more than one kid. I can't afford it," said Charczuk, who has a 12-year-old son and makes a little more than $92,000 a year. "There's no way we would be able to afford two."
WHAT NEWSDAY FOUND
- Many Long Island borrowers are struggling with student loan payments as they resume post-pandemic, exacerbated by rising living costs and federal policy confusion.
- The Federal Reserve Bank of New York warns of potential credit score impacts for millions due to delinquent student loans, while financial advisors urge borrowers to remain calm amid uncertainty.
- The return of student loan payments could reduce consumer spending, posing economic challenges.
Charczuk is one of millions across the country facing steep monthly student loan payments as the nation grapples with the end of pandemic-era pauses and confusion over how federal policy changes might impact borrowers amid the Trump administration's efforts to dismantle the Department of Education.
A new analysis published by the Federal Reserve Bank of New York estimates that more than 9 million borrowers could face significant drops in credit scores in the first half of 2025 as delinquent federal student loans begin reappearing on credit reports.
Starting in March 2020, the federal government suspended payments and interest accumulation for federal student loans, causing the delinquency rate to fall below 1% by November 2022, according to the bank.
Payments resumed in October 2023, with an on-ramp protecting student borrowers from negative credit reporting until September 2024. It takes at least 90 days of missed payments to be considered delinquent, which means adverse credit reporting is only now appearing for some, the New York Fed said.
“A lot of what I’m telling clients is, ‘Let’s not panic; we don’t know what the solutions are yet, because we haven’t been given any guidance on what those solutions will be yet,’” said Ryan Derousseau, a financial planner at Hauppauge-based United Financial Planning Group.
Some borrowers are experiencing sticker shock after returning to making monthly student loan payments, he said, adding that he has a number of clients — and their children — in income-based repayment plans who fear they’ll suddenly owe payments they can’t afford.
“Right now the unknown is what, I think, is creating more panic than anything else,” he said.
Borrowers face uncertainty
Student loan payments affect a significant number of Long Islanders given how many residents have college educations. On Long Island, approximately 1.3 million people have a bachelor's degree or higher, according to census data.
Across the state, more than 2.4 million borrowers held a cumulative $90.1 billion in federal student loan debt as of Sept. 30, according to federal data.
In 2018, nearly 18% of Long Islanders had student loan debt with an average balance of $35,100, according to the most recent data available from the New York Fed.
At least for now, New York State is below the national average when it comes to borrower delinquency. New York's delinquent rate was 0.9% at the end of last year compared to the 1% national average, according to an analysis of New York Fed data by Alex Young, assistant professor of accounting at Hofstra University.
Yamina Hashmi, student assistance program manager and counselor at United Way of Long Island, said her agency is unsure of how student loan policy will continue to shift in the future.
Her clients have been asking how changes to federal student loan policies will impact them, she said. She advises them to “ride the wave and see how everything plays out,” and seek counseling before making major decisions about loans, she said. Borrowers should also make sure they understand the details of the loans they’re taking, Young added.
Billy Riedel, 29, of East Northport, teaches at John Glenn High School. He said he tells his students to be mindful about how student loans could impact their financial future before they borrow.
“I like to talk to them about, yeah, it’s great, you could wear the U Miami sweatshirt, but when you leave there, you might have a little more debt” than attending a state school, he said.
Ayobami Adebowale, 28, a biomedical engineer, grew up on Long Island before moving to Washington, D.C., for a job with the Food and Drug Administration. She’s now moving to New Jersey as she starts a new position with Johnson & Johnson.
The federal approach to student loans right now is “confusing,” she said. Her recent application for an income-driven repayment plan was processed but has not taken effect. She’s currently paying nearly $600 per month toward her loans.
“It’s frustrating. I just want to know what to pay,” she said, and she’d like to pay the lowest amount, especially as the cost of living rises.
A 'crisis of affordability'
Besides student loan debt, Long Islanders are facing a “crisis of affordability right now,” said Matt Cohen, president of the Long Island Association, a leading regional business nonprofit.
“In our region, we have some of the highest costs in the country,” he added, citing rising price tags on housing, energy, transportation and child care.
Robert Riley, an economics professor at St. Joseph’s University, said that the return of student loan payments is coinciding with a general decline in savings and rising credit card balances for many people.
Combined with the uncertainty from Washington, “all that could combine to [reduce] consumer spending,” he said, which could be “problematic” for the economy.
The federal government needs to facilitate solutions to make it easier to pay off student loans while managing the growing cost of living across the nation, and especially on Long Island, Cohen said.
But, in the meantime, many borrowers paying down studentdebt continue to struggle.
“Everything is so expensive, truly too expensive, and everyone’s like, ‘You should be saving money,’” Adebowale said. “What money? ... I make good money but I still live paycheck to paycheck.”
Brianne Ledda covers personal finance and affordability for Newsday. She previously covered Southold and Greenport for The Suffolk Times and is a graduate of Stony Brook University.
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