I wish I knew then what I know now. Student loans, especially through financial institutions are not a good thing. I have been repaying my student loans back since 2006 and it seems that I will be repaying them back forever. Just when I think I have made a dent in my loan, I look at my remittance slip and I have so much more to go. So here is my question: when will I be finished repaying my student loan?
I blogged last month about my horrible ordeal with the Department of Education. They took my tax refund even though I have been paying my loan back on time each month. I was told that this was a “clerical error”, but that there was no way to reverse the mistake. I had plans for my refund and they all faded away upon that development. And even with that lump sum payment, I have a ways to go in terms of my financial obligation to the Department of Education and to Citibank, in which I obtained a private student loan.
Through President Obama’s new Overhaul of Student Loan Program that was included in the Health Care Reform Bill signed into law last month, there may be relief ahead. In this program, fees from private banks offering student loans will be eliminated, squeezing them out of the student loan process. This is good news since private banks usually charge a higher percentage rate for monies borrowed. And beginning in 2014, students borrowing money will have their payment capped at ten percent of income above a basic living allowance. Right now, it is at fifteen percent, which is taxing a lot of former students, including me. I am glad these new rules have been signed into law but for those of us that already have student loans, it is a little too late. There are programs for student loan forgiveness, but most people do not qualify for that option.
More money has also been earmarked for the GI Bill and for the Pell Grant.
One of my friends continues to take classes even though he has graduated with two degrees. As you know, in most instances, as long as you are an actual student, you are not forced to pay back student loan monies. Once you graduate, you are supposed to begin making loan payments, usually within the first year. But if you are still classified a student, even taking one class, can prevent your student loan from being in default.
I feel like I am stuck on an endless merry go round. Does anyone else feel that way?
Source- NY Times