You hear about the $1.2 trillion – and growing! – nationwide debt that’s held by individuals who took out loans for college. You may have also heard about how this will impact the overall economy: If people who are young adults now don’t get married, start families, and purchase homes until they are in their late 30’s or older, because the money that would be spent on these is used to service their student loan debt, it could well have a large negative impact on the overall economy.
But these are just statistics, forecasts, predictions: they don’t tell the stories behind this debt.
We will. Here are 3 stories of lives that could be transformed through student loan relief:
I worked part time for five years until I was offered a full-time position. I pay nine hundred dollars a month for my loans which leaves very little for anything else. If it wasn’t for my parents, I wouldn’t have a place to stay, food in my stomach, or even a car to go to work in. My life revolves around working to pay off my loans. I haven’t had any free time to enjoy life.
I’m 28 years old. I have 55,000 in federal loans and 15,000 in private student loans. I work for a non-profit organization that serves adults and children with disabilities. I barely make enough to pay my bills let alone wrap my head around paying off my student loans. The burden is absolutely crushing and makes me feel like I will never be able to progress or even own a home. It makes me wish I never got my Bachelor’s degree.
Valerie, who now works as a teacher, wrote:
I have $100,000 in student loans. And the number doesn’t seem to be getting any smaller. I pay both Fed loans and private loans every month totaling nearly $750. I am in my early 30’s wanting to start a family with my husband but instead we argue about what to do with the debt. My student loans are a burden on him. I feel like a burden.
It’s easy to hear the pain and the incredible stress in their lives. This debt will have a large detrimental impact on their futures for years to come.
Yet, without knowing their exact circumstances, Jaime, Sarah and Valerie all could see some hefty relief by way of different federal student loan forgiveness programs such as the government’s Public Service Loan Forgiveness (PSLF) program (Valerie and Sarah), or an Income-Driven Repayment Plan (Jaime).
However, there are strict requirements they’d have to meet in order to be eligible for these programs. Jaime for example may qualify, depending on how low her income is. In addition, her entire $100,000 debt load isn’t eligible for the federal income-driven plan because not all of her loans are government loans.
But one can imagine that even if she saved one-third of her monthly loan repayment: her monthly obligation would shrink to $600/month and she’d save $300 a month, or $3,600 a year. A $300 savings isn’t huge, but it’s not inconsiderable, either.
Both Sarah and Valerie appear to be eligible for the PSLF. Sarah works for a non-profit and thus will likely qualify. Valerie says she works as a teacher: so as long as she works for a public school, she may also be eligible.
As long as they pay their federal student loans on time each month for 10 years (120 payments) they could apply for the PSLF and have the remainder of the federal loans “forgiven.” In other words: their remaining federal loans could be eliminated!
Let’s say they both pay off half of their federal loans within the 10 years of regular payments as required by the PSLF program. Sarah, for example, could wave goodbye to $27,500 in loan payments (and their interest), while Valerie could happily forget about a big portion of her remaining $50,000 in loans (plus their interest). Both would still be liable for whatever is remaining of their private loans after that 10 years, but their savings are still incredibly significant.
In other words, all three of these individuals could see their lives transformed, improved, unburdened – you name it – via these loan forgiveness programs.
The key in each of these scenarios is understanding what they qualify for and what can be done to help them unburden themselves with student loan debt. If you’d like to learn more about how you may qualify for one or more of the federal student loan forgiveness programs, contact New Start Advisors. We look forward to helping you regain financial peace of mind.