Not quite good bye

I posted earlier saying I was going to stop blogging, but have reconsidered.  I will keep blogging, just not as frequently as I started out doing.  I will blog when something comes up that I want to weigh in on.  I’ve spent many hours writing posts about why the system needs to change.  Little has improved, and it can get discouraging.  The blog hasn’t attracted the wide attention from readers that I was hoping for.  But perhaps readership will increase with time.  I’m a senior citizen with a full time job and a busy life.  I have to make choices about what to put my energy into.  So I won’t be blogging weekly or more often, as I was at first.  I encourage you to go back and read past posts.  You are welcome to share them, just please cite me as the source.

I will continue to advocate for change in the student loan laws.  If you want to keep up with what I’m doing, you can friend me on Facebook.  I’m on there under the name Keep Jessica Afloat.   And if what I’ve said has resonated with you, here are some things you can do.  Write or call your elected representatives.  Once helps, repeatedly is even better.  Write your newspaper.  And check out Student Loan Justice at studentloanjustice.org.  They are also on Facebook.  Thank you for reading.

News stories about “Student loan forgiveness”

Recently a variety of sources have run stories about how “student loan forgiveness” is going to cost so much more than previously thought.  They imply that student loans are being forgiven left and right.  Nothing could be farther from the truth.  With current laws, allowing paychecks and Social Security to be garnished without a court order, it isn’t easy to walk away from a student loan.  And bankruptcy isn’t an option.  Theoretically it could work rarely, but I’ve never heard of an actual case of someone getting a bankruptcy discharge of student loans since consumer protections were removed from these loans in 2005.

Some of the articles say things like “The payments are so low, they don’t cover the interest.”  This is partially true.  Many payment plans don’t cover the interest.  But that is not because the payments are so low, it’s because the interest charges are so high!  At one point my payment was set at $153 a month.  As a single parent,  I was dipping into savings each month to make that payment, plus pay rent and buy food.  But the interest was over  $300 a month!  So the debt kept growing, even though I was making payments.  Luckily my family was able to move in with a friend, and didn’t become homeless, which was a real possibility.  But not everyone has the option to share housing.

The powers that be seem to assume that no matter how old, or hard up financially someone is, they are still able to pay on their student loans.  Don’t be fooled by these articles hinting that people who have these nightmare loans are easily able to obtain loan forgiveness.  It’s just not true.  For example, the Public Service Loan Forgiveness program is often mentioned as a way to get out of student loan debt.  But the conditions that the payments must be made under are very limited.  You either have to be on an income based repayment plan while making ten years of qualifying payments, or be on the 10 year standard repayment plan.  When you’re on the 10 year plan, which has high payments, your loans would be paid off in 10 years.  You wouldn’t need forgiveness!  And the chances of staying on one of those income based plans a full ten years are small.  If your income goes up, you get married, a child leaves home, etc. you can be taken off the plan.  And there is no guarantee that the Public Service Loan Forgiveness Program will still be around long enough to make ten years of payments.  Here is a link and statement from the Department of Education website forgiveness page under Common Questions:

https://studentaid.ed.gov/sa/sites/default/files/public-service-loan-forgiveness-common-questions.pdf

5.Can I be certain that the PSLF Program will exist by the time I have made my 120 qualifying payments?

“We cannot make any guarantees about the future availability of PSLF. The PSLF Program was created by Congress, and Congress could change or end the PSLF Program.”

So even if you manage to stay on an income based repayment plan for 10 years (Student Loan Justice estimates 85% of borrowers won’t be able to do so), there is no guarantee the plan will still be there when you have completed ten years of payments.  And there is no guarantee of forgiveness, you have to apply and see what they say.

So there is not lots of “student loan forgiveness” out there.  It does get forgiven after you die, assuming you don’t have a co-signer, who would still be stuck for the loan. Forgiveness upon death isn’t much comfort for those of us who need relief now, while we’re alive!  And it sure isn’t right to expect taxpayers to take on these huge interest payments.  My larger loan account was originally $29,000.  Assuming I make the standard payments for 25 years, which I can’t afford to do, I would pay over $70,000!  The writers of these articles seem to think that if I managed to get forgiveness (I’ve already paid thousands, putting my retirement well being at risk) that the taxpayers would need to pay back the huge amount of interest.  That isn’t right.  There needs to be real student loan forgiveness for those who can’t afford to pay.