After President Biden's announcement about student loan forgiveness my former college roommate posted on Facebook about her situation. I graduated from college back in 2000, I think she took a year or two longer to finish. She still has over $25k in student loans. I was shocked. I know that she came from a single parent home & they didn't have a lot of money, but I was surprised as I thought our college was pretty reasonable to attend back then. She said that she has paid more that she initially took out & then some. She has deferred when she was unable to pay.
I am very sympathetic for those that continue to be bogged down with student loan even though I was able to pay mine off. I had only $5k for my undergrad due to having scholarships, then $20k for grad school. I got some repayment funds from the federal governmentfor my grad school loans. I think something like $4k in exchange for committing to continue my employment for a few years. I had every intention of retiring from the VA & still do so it was a no brainer to commit at the time.
Back to my friend, her loans were largely from undergrad though she attended and didn't finish grad school. Her undergrad degree was in education, but she was never able to teach because she couldn't pass the exam. With the teaching shortage I think she would be able to get a job now, but I'm not sure she is interested after all these years. She is hoping, and I as well, that she'll get the $10k loan forgiveness.
September 4th, 2022 at 07:20 pm 1662315653
September 4th, 2022 at 08:23 pm 1662319392
The issue with student loans is that because they were often taken out by people who came from poor families, the student had no one to guide them who had financial experience.
Income based payment, where you paid less than the interest owed each month meant that even though you were paying 10% of your income, your balance increased each month. The 2008 recession and stagnant wages due to low inflation kept salaries low for many people. Even when interest rates were Los, student loans were still at 6-8%.
And no physical statements were sent, so people didn’t even know their balances were going up.
I never understood this until Amber explained what happened to her.
I see the loan forgiveness as making amends for predatory lending practices.
The new program won’t increase loan balances each month, and if increased Pell grants pass, students should need to borrow less.
Many people made bad decisions when they were young. This will give them a second chance.
September 4th, 2022 at 09:33 pm 1662323623
September 5th, 2022 at 07:02 pm 1662400968
I think we are responsible for paying what we borrow with interest however I think it’s disgusting that one can pay 10+ years and not see the loan decrease.
Like your friend, I’m hoping to have my loan remaining balance forgiven but in the meantime, I’m still making payments.
September 6th, 2022 at 12:29 am 1662420594