The pandemic payment pause on federal student loans ended this month.
According to the U.S. Department of Education, student loan debt across the country stands at a total of more than $1.7 trillion. 92% of it is owed in federal loans.
“Between the time I got these degrees and was actually able to put some of that knowledge to work, I got cancer,” said Cindy Nelson who is a breast cancer survivor. She also survived more than $100,000 in federal student loan debt. Much of it was accumulated from mounting interest over the years.
“I was blessed that I even had the opportunity to go to college,” Nelson said. “No matter what it took.”
It took a lot to complete her education. In her late thirties, Nelson became a single mother with two children to support after coming out as a lesbian led to her divorce .
Her truth brought her freedom and financial responsibilities. She hoped going to college would eventually provide security for herself and her two children, Ryan Elizabeth and Shawn.
“You’ve got to go to college to have the world open up to you. You’ll be with people you never imagined and you’ll see diversity like you’ve never seen,” she said.
Various grants helped pay for a portion of her bachelor’s degree in visual arts from UC San Diego. But federal loans paid for a master’s degree in education from San Diego State University in 1997.
She went on to a successful job at the SDSU School of Nursing which came with lifetime health benefits and a steady income when her loans came due.
“When times were rough, they would put me on income-contingent to pay as I go, and then when things got better I would pay more. Once I got cancer and couldn’t work …I just stopped paying them,” Nelson said.
Cindy’s story is like so many other stories of student borrowers who found themselves drowning in debt when life happened. There are millions of borrowers who are hoping for relief and loan forgiveness.
Dan Roccato is a clinical professor of finance at the University of San Diego with 20 years of investment banking experience. He said loan forgiveness has to come with reform to the system.
“We do have to provide relief to certain borrowers who simply are never going to be able to pay this back. At the same time, recognize that we have to tie the ribbon a little tighter between the value of a college education and how we pay for that education,” Roccato said.
“I started paying it back right away,” said Tim Barounis who had to pay off $200,000 in student loans for his medical school education.
“I’m fortunate in the sense that I make a physician-level salary and I was able to make those payments,” he said.
Consistent payments that included a few lump sums helped Barounis get his total down to $50,000. It did not help him find happiness practicing family medicine with 60-hour work weeks.
In 2018, after seven years as an attending physician at UC San Diego, he stopped practicing medicine.
Barounis found a much better life and work balance with a job working from home as a medical procedure consultant. The job allows him much more time with his family and children.
He also discovered a Biden administration program that gave him credit for consistent payments and his earlier work at non-profit hospitals. That eliminated his remaining balance.
“Being able to take advantage of this program, which I was sort of intended to qualify for I think, I feel really good about having been able to take advantage of that and not having those loans anymore,” he said.
“When I lost everything, it was tough but I made it through.”
Cindy Nelson, student loan borrower and cancer survivor
Cindy Nelson also discovered a forgiveness plan based on her limited income and payment history. She is now free of her student loan debt and cancer-free, too. “When I lost everything, it was tough but I made it through,” Nelson said.
USD finance expert, Roccato said there is hope for anyone who wants it.
“It’s become a center-stage issue and that’s important. It’s no longer this fringe issue that the guys in the Ivy Tower on campus will figure out.”
Roccato suggested the best first step for anyone feeling overwhelmed about student loan payments is to go to www.studentaid.gov
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