Student Loan Hell
I have been paying on my student loans since 2012.
A bit of background first…
I graduated high school in 2002. I began college in August 2002, and graduated with my bachelors in December of 2007. I changed my major after my sophomore year of college, which is partially why it took 5.5 years for a 4 year degree.
Then, I was told and I quote “Have you considered graduate school? You are one of the smartest students I have ever have. You should apply to our graduate program here.” That was at EMU. I didn’t really have any plans or a job lined up, so I took that professors advice and did.
I was in graduate school from August 2008 until December 2011. I took 3 years for my 2-year M.A., in part due to lack of availability of faculty for grad students at the time (to sit on committees).
I never had any type of financial aid counseling. I still remember when I went to the financial aid department, they told me, “This is what you need.” So I listened and took out school loans.
I worked full-time, but at minimum wage, so it wasn’t enough for dorms/rent and utilities so a lot of my student loans went to simply living at school so I could attend school. This, I imagine, is typical of most college students. College towns are expensive to live in.
Work, Past/Present
Upon graduation, I accepted an adjunct sociology teaching position at a community college (August 2011). A year later, I accepted a second adjunct teaching position (August 2012). And a few months after that I accepted a part-time job (February 2013). I hold all three of these positions as of today. Combining all of those jobs/hours I, on average, work more than 40 hours a week. I will note that some weeks in the summer are lighter, but then I often teach 17-20 credits during the traditional school year.
Basic Loan Information.
As I mentioned at the beginning, I have been paying on my student loans since 2012. However, I will clarify that. All of my loans were strictly through school, Stafford loans, both subsidized and unsubsidized. I began paying back my Sallie Mae (now Navient) Stafford loans in 2012. Since then, I have made a total of 37 payments (out of 42 months). A couple times the loans automatically deferred as I enrolled in classes at work (fortunately, tuition was covered because I was an employee, so I was not adding to the loans). The total balance for this loan, when I began paying, was $37,553.
My second big loan was another Stafford through the government (Direct) and then they sold it to Great Lakes Loans. When they came to collect, I was already paying a large amount on the previously mentioned loan, so I deferred. Once deferment was up, I began paying on this particular loan in September of 2014, at the total balance of $46,688.51.
[The last loan I have been paying on loan that was directly through EMU the entire time, the total amount was for $2,500, plus interest. I have been paying on this since I graduated, but as the loan amount was low the payments of $40/month were affordable. This was another loan that automatically deferred every time I was enrolled in classes at work. This loan I have only paid off as of July 2015. At least I don’t have to think about THIS loan anymore.]
Payments and Options Given.
As my two big loans had a combine total balance (at the beginning) of $84,241.51, I had called both companies (Sallie Mae at the time and Great Lakes Loans) at the beginning of repayment asking for lower payment options. Sallie Mae offered the full payment or a graduated step-payment plan. Well, I took the step-payment because it was the one of the two options I could afford. Great Lakes Loans didn’t offer any options (full payment or defer or forbearance), which is why I had deferred them until I couldn’t continue to defer.
I called Navient, as well, once Sallie Mae split. In fact, I believe I called them twice. They lowered payments both times, but I was still paying around $180 a month for that loan alone. They never offered the income-based repayment plan, or any other options.
When Great Lakes Loans came to collect in 2014, I asked for a lowered payment and they said no.
I struggled and put up with the $400/month payment for Great Lakes Loans, on top of the $180 Navient payment, and the $40/month EMU payment. Since September of 2014, so for the past 10 months, I have been paying $620/month in student loans. This is more than my mortgage.
My adjusted gross income (AGI) for 2014 was $24,616. (FYI- 2014 was the most I have ever made in a year in my life, thus far.) For only 4 months, I paid 10% of my entire yearly AGI. If I had been paying at that rate for all of 2014, that would have been 40% of my entire AGI.
When I called Great Lakes Loans AGAIN asking for lowered payments, the women was not terribly helpful or polite and said, “Your options are deferment or forbearance. But either way, when those are up your payments will begin at $420 a month, versus the $385 you have right now.” Well, I told her I knew THAT wouldn’t work any better because I wasn’t expecting a pay increase, that I couldn’t afford the $385, but I guess it didn’t matter to them. She was completely indifferent and didn’t offer the IBR or any other options.
Fast-Forward to Now.
I am expecting a pay-cut this coming semester, as I wasn’t offered nearly as many hours as I have been in the past. After calling Great Lakes and getting no where, I finally googled, “what happens if I quit paying my student loans?” and discovered the linked article written by Allie Conte “I Asked an Expert What Would Happen if I Just Stopped Paying My Student Loans.” I googled this in July, and the article and any related articles were published in June, so I guess my timing of desperation was pretty good.
With the information from Conte’s article, I discovered the IBR plan, otherwise known as the income-based repayment plan for student loans. This seemed like the best option for me all along and NEVER ONCE was I offered this option by Sallie Mae, Navient, or Great Lakes Loans.
First, I called Great Lakes Loans. Of course, at $385/month and with no previously offered lower options, and anticipating a huge paycut, this was the loan I was figured on having to quit paying. Again, this loans’ payments started last September, with the balance of $46,688.51. I have paid a total of $3,822.45. My current Great Lakes loan balance, what I still owe, is $45,534.33. As of right now, on an IBR plan, my payments were stated that they should be around $70-80/month. Again, never once in the several phone calls asking for lower payments was I offered an IBR.
For my Navient loan, since I started payments on the total balance of $37,553, I have paid $10,583.15. My remaining balance on the bill is $35,745.36.
When I called with them asking for lower payments, twice in the past, they simply deferred them or only offered step payments. Again, Navient never once offered an IBR plan. As of right now, on an IBR plan, my payments would be around $10-20/month. That is instead of the $200/month I have been paying. I only discovered this after calling Navient and saying specifically, “I want an income-based repayment plan. I would like to know what those payment estimates would be.”
Now What Do I Do?
So after calling both lenders, it was Navient that gave me the most information. While they haven’t exactly been what I would call helpful, they were have all along been more helpful than Great Lakes Loans.
Navient’s rep, Larry, told me that I need to call the Federal Student Aid line, 1-800-557-7394, to find out how I consolidate my payments in to one single IBR at which point I will be paying Navient and Great Lakes separately but for the combined total, based on my 2014 AGI.
The IBR plans, it is worth noting here, are you pay on them for 300 months (or 25 years) and at the end the rest is ‘forgiven’. However, you still pay income taxes on the ‘forgiven’ amount, whatever it may be. This could be MASSIVE. So, looking at the payment options, the IBR would be incredible, but… it depends on what this taxable portion will be.
So, I guess at this point, it is TBD, as I plan on calling them tomorrow on my lunch break, and am not sure how quickly this process goes to find out what my total payments will be. So, as they say… “I’ll be back” with updates on how this all works out, if it works out, and the estimated numbers for those taxes at the end of 300 months.
Hopefully this made sense. At least it does to me in my head.
