30-Year-Old With $110K Student Debt Wanted PSLF; Balance Keeps Growing

  • Kjerstin Line, 30, has more than $110,000 in student debt from her undergraduate and graduate programs.
  • Lane’s career in the nonprofit sector would, in theory, pave the way for forgiveness.
  • But the interest means he’s barely paid off, and Biden’s apology is just a drop in the bucket.

Like millions of student loan borrowers, Kjerstin Line is making loans easier.

For Lane, 30, who has more than $110,000 in student debt, the $20,000 in forgiveness he’s set to receive from President Joe Biden’s plan is just a drop in the bucket. As a first-generation college student whose debt shaped the trajectory of her career, she fears her balance will climb even higher once pandemic-era payments stop and interest starts to accumulate again.

“I never miss a payment, always on time, but my balance never goes down,” Lane told Insider. “I don’t understand how people can’t see that there’s something in this picture.”

Despite working through college and taking steps to cut costs, Lane graduated in 2014 with $98,000 in debt from her undergraduate and graduate studies. In the eight years since then, despite constant payments, compounding interest, his balance has reached today.

Lane chose her communications job for an education-advocacy nonprofit because it suited her skills and it set her up for Public Service Loan Forgiveness, which forgives student debt for public and nonprofit employees after 10 years of qualifying payments. .

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But the program has historically been riddled with flaws, and he recently abandoned that strategy to take a job as a marketing agency, which the federal government pays close to $90,000 and requires a year of work to pay it back. debt. He is also paying off medical debt.

“I also had to leave the nonprofit sector. “So it’s like a Catch-22.

Lane is one of millions of American borrowers in default. He’s grateful for the relief he’ll get, but the legality of Biden’s pardon is still under review, but he’s not sure he’ll be able to make the monthly payments when it resumes in January.

Her situation highlights the larger structural issues underlying the student debt crisis, where first-generation and low-income students take on large debt loads to supplement their incomes, but are still saddled with ever-growing balances. Many, like Lyne, have built their lives around the hope of help — and now that it’s in some form, it may not be enough.

“The hardest thing is that I believed in this system from a young age that I would have a path to prosperity or a decent life—no big deal—but a decent middle-class life that I could give back. It’s about the people who helped raise me and the educational programs, the nutrition the community that supports me through programs and things like that,” Lane said. “And it feels like a big promise right now.”

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Interest on student loans can go up, so balances can go up and down

As a college student in California, Lane worked several jobs in places like restaurants and grocery stores. He took classes at his local community college and university in the summer and winter to try to keep his expenses down. He graduated in 2012 with a total of about $18,000 in debt per semester for his bachelor’s degree in journalism to cut costs.

He went to his “dream school” for a master’s degree in journalism, still working part-time, and left in 2014 with an additional $80,000 in debt. At the end of his time at school, he admitted to the hospital for dehydration. torn.

Despite steady payments, Lane’s debt has grown in the years since graduation. This comes down to the issue of interest capitalization, which is when the accrued interest is added to the borrower’s principal balance and can result in debt loads far greater than originally charged.

The Biden administration has taken steps to prevent interest capitalization. In July, it issued a proposal to end the practice in all cases not required under the Higher Education Act, such as grace periods, but those changes will not be implemented until next year. And borrowers are still struggling to stay on top of their payments.

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For borrowers like Lane, the interest over a few years could negate the relief Biden received.

“Before the pandemic, I was paying $300. I think I was paying $300 a month for three or four years and my balance never went down,” he said. “They were always up.”

Government employees like Lane can get their debts forgiven, but many can’t get in touch with a loan servicer.

Although Lane is a big supporter of public service loan forgiveness, he said he was “troubled by his own problems.”

The company that manages the public service loan waiver portfolio — MOHELA — is not making light of the problem. After a number of loan companies ended their federal contracts last year, all borrowers enrolled in PSLF were transferred to MOHELA, and the process was not seamless.

Insider has already spoken to two borrowers who wanted answers to simple questions about their PSLF payments but spent hours on the phone and never got through to a representative who could answer their questions.

“I’m really concerned about MOHELA as a service provider in general,” Line said.

Student loan borrowers rallied to President Biden for student debt relief

Student loan borrowers are gathering near the White House to demand debt relief on May 12, 2020.

Paul Morigi/Getty Images for We, The 45 Million



While MOHELA has never commented on the hours-long hold time, Scott Buchanan, executive director of the Student Loan Service Alliance — a representative of federal loan servicers — previously told Insider that the Department of Education decides how much resources it gives loan companies. affect how many customer support staff they can hire.

But since the PSLF waiver expired Monday, allowing past payments, including those previously deemed ineligible, to count toward forgiveness progress, borrowers are running out of time to access the expanded relief. The department recently made permanent PSLF adjustments after the waiver expired, but that doesn’t eliminate the confusion some borrowers have with their payment history.

“I would love nothing more than to dedicate my entire career to serving this sector,” Lane said. “All of my career choices revolve around this debt, and it’s not really a tough, fun place to be.”

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