How does Having $20,000 of Student Loans Forgiven Affect Debt Payoff?
It was announced that student loans will be extended for the last time and a plan for forgiving loans for those who qualify for forgiveness. There are a ton of opinions on if forgiving loans is a good or bad thing. I am unsure how it will affect the economy in the long run. Even if I was not benefiting from the forgiveness I would still be happy for the people whose lives are improving with this help. However, for me, it only takes 13 months off my estimated payoff date for my student loans. Which will save me a couple of thousand in interest. I know for having that extra money will be helpful to pay off other debts and save for retirement.
I have $90,517 in federal student loan debt. Before this announcement, my estimated payoff date for my student loans was August 2030. Now with the forgiveness new estimated payoff date is September 2029 so just over a year would be taken off. Not a huge change but it will save a few thousand in interest. This is the estimated payoff date if I am able to stick to the plan for paying debt off. But things do not always go as planned.
Here is a brief history of how I ended up with $90,517 in student loans. My college journey was untraditional in ways. I attended a local two-year college right out of high school and paid for it out of pocket while working a full-time job while also working as a nanny. I then attended Black Hills State University (BHSU). That is when I started taking out student loans. I attended there for about 2 years before I dropped out to have children. I finally returned 15 years later to the University of Arizona Global Campus(UAGC). I graduated with a bachelor's degree in October 2021. I racked up $93,161 in student loans by the end. When I started taking out loans I was in my early 20s and naive. I took more money than I need to cover my tuition. I was uneducated on how loans work. UAGC required everyone taking out loans to complete a loan repayment e-course. You had to pass the e-course in order to be able to take out loans. I remember thinking; “really wish this was a requirement when I first started taking out loans”. I am unsure if I would have taken so many loans out if I fully understood. It is easy to be a young college student being given thousands of extra dollars to attend school and think oh I won’t have to worry about paying this back for a long time and I will have my dream job and it will be easy to pay off. Which does happen but sometimes life just happens and those student loans become extremely hard to pay off.
Forgiving student loans does not fix the problem of the cost of higher education and the high-interest rates. The high cost makes it hard for lower-income students to attend college or they rack up thousands of dollars in student loan debt upon graduation. High-interest rates make it hard for people to pay off debt quickly. It sorta makes it feel like a trap to keep people in their status. All federal student aid programs, which include student loans, Pell Grants, and work-study are funded by federal tax dollars paid by U.S. citizens. This means students are already attending college on taxpayer’s dollars. However, with interest rates and how overpriced college is paying these loans back is hard or even impossible for some. Our Government should help people in need.
