Mary Jacob explaining the student loan she paid off. This is a loan which had high balances due to miscalculations, etc. If I felt up to it, I could probably figure out how she ended up paying $16,000 in the end. It appears she was paying interest only in the beginning, drove the loan down by 50% when she doubled up on payments.

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My final attempt to help those that don’t understand the student loan game.

Mortgage: At closing, you know exactly what you will pay back. Interest is calculated monthly. Extra payments pay down principal.

My Mortgage was $135k for a 30-year loan in 2004. Refinanced once for lower interest rates and terms. We made a couple of lump sum principal payments and the house was paid off in 2021. That’s 13 years early.

Student Loan: Interest is compounded daily. Extra payments go toward future payments, not to pay down the principal. If you don’t make a monthly payment because you are paid up in advance, your interest is still calculated daily.

I was told if I made my payments on time (I never missed a single payment nor paid late) loan would be paid off in 20 years. I won’t say the college financial aid rep lied to me. What I will say is she probably didn’t understand it herself.

I was also told about the Public Service Forgiveness. Make 10 years of payments and the rest is paid off. Well, when I applied, I was told my loans weren’t eligible.

I borrowed $45,000 in student loans

First 10 years I paid $275/month = $33,000

Next 15 years I paid $550/month = $99,000

1 final lump sum payment = $16,000

Total $148,000

Mortgage $135k paid off in 17 years for a total of $183,000.

Student Loan $45k paid off in 25 years after making a final $16k payment for a total of $148,000.

Yes, you can say everyone should know better, but chances are you wouldn’t have known any better either.

We are told over and over that your way out of poverty is through education. Yet, the poorest, most vulnerable, first-generation college students are just happy to be living their dream and trying their hardest to escape the cycle of poverty.

What the government should do is take every penny people have paid toward interest and apply it to the principal and preferably stop charging interest. This would probably pay off many loans. At the most, the loans should be set up like a mortgage.

Anyone who reads this and doesn’t understand the system is broken doesn’t want to understand.

How many read this on Facebook?

My answer was this to the author who portrayed this issue.

Long time no comment. Read this long story by Mary. I would say she is correct. I would also say, the naysayers never had a loan like this, and probably never signed a loan at 18 years of age.

Private loans, you need another and majority age signature. For Federal Loans (Direct, etc.) you do not. The same as you do not need mommies or daddies’ signature to enlist at 18.

She does not mention her servicer. They could have been one of the bad ones. It is very possible neither the school or the servicer explained exactly what she was paying. A school could have intentionally misguided her into signing because the loans monthly payback amount was so low. What eighteen year old would know this?

Student loan in a category called loansharking to which there are few avenues of escape. Public service forgiveness requires yearly certification. Maybe they told her and maybe they didn’t. You can’t just show up after 10 years and claim it. Many others have done the program and at the end found out they did not qualify under DeVos’s regime.

“Sadly, what she says is very true,” to coin a phrase.

The instigator of much of the student loan issue is Biden himself. Since 1980, he has done everything possible in Congress to deny forgiveness or relief under any program. The last being in 2005, when they changed the program to having to prove “undue hardship” for relief.

~ Eight percent of the student loans have balances as she details. The $10,000 Biden forgiveness will be applied to interest first. Of the age group 62 and older, they hold an average of $40,000. The likelihood of them paying it off is slim. I do not have the exact numbers; but it goes like this. At $250/ month at 2.5% interest, it would take 14 years to pay the loan off. Roughly 2.4 million people in this category.

Just another story about student loans.

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