Kate Quick, 43, said her student loan debt causes stress and anxiety for her and her family.
Courtesy: Kate Quick
When Kate Quick, 43, finished her MFA at the University of Alaska Fairbanks 22 years ago, she had borrowed about $30,000.
Now, he owes nearly $48,000, even after years of making payments.
“I just can’t think straight every time I have to deal with student loans,” said Quick, who now works for the University of Alaska faculty union.
She, too, barely missed a chance for relief. Quick previously worked as a college professor, so she looked into Public Service Loan Forgiveness, or PSLF, a program that would forgive her debt because she worked in education.
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The program requires 120 qualifying payments, which takes about 10 years. However, the rules about what types of payments qualify are strict. Although Quick worked as an adjunct professor and then a full professor for 17 years, only the payments she made while employed full-time count toward the program.
You are missing the 120 payments you need to qualify and you no longer work for an eligible employer. Now, he is in a different career and sees few opportunities to return to teaching; she does not want to go back to college and is not certified to teach in elementary, middle, or high school.
In addition, Quick had to change his Federal Family Education Loans to direct loans when determining eligibility for PSLF. That added $17,000 to his capital.
Your monthly payments will also increase from $88 to $568 each month. If you follow the current payment plan set by your servicer, you’ll end up paying approximately $170,000 to eliminate your debt. Her husband, a jewelry artist who went back to school to become a computer scientist, also has student loans and has a payment of more than $500 each month.
“It makes me panic,” she said, adding that because of student loans, the family put off buying a house and saved for college for their three teenage children.
“It created some marital problems over the years because money is something that people fight over in relationships,” he said. “And, especially when you don’t have a lot of that, that was us.”
a common problem
Fast is not alone. More than 60% of borrowers say student loan debt has negatively affected their mental health, according to the CNBC+Acorns Invest In You student loan survey Made by Momentive. The online survey was conducted January 10-13 among a national sample of 5,162 adults.
“When people can’t pay their bills or their student loans as quickly as they should, there’s a level of shame and sometimes guilt,” said Aja Evans, a licensed mental health counselor who works with Laurel Road, a company of digital banking. platform. “That can quickly turn into feeling bad about yourself and not feeling like you can present who you really are to other people because you’re worried about financial stresses in your life.”
The survey also found that the less a person earns, the more their mental health suffers when it comes to student debt. Less than half of people earning more than $100,000 a year said that educational debt negatively affects their mental health, compared to 59% of those earning between $50,000 and $99,000 and 70% of those earning less than $50,000 a year.
Women and younger adults are more likely to report negative mental health effects of student loan debt, the survey showed. Still, more than half of baby boomers said their student debt had a negative impact on their mental state.
“People think student debt is a youth problem,” said Betsy Mayotte, president of The Institute of Student Loan Counselors, a nonprofit organization that helps student loan borrowers with free counseling and dispute resolution. But that’s not true, he said, pointing to millions of older borrowers who are struggling to pay off debt and save for retirement or are retired and still paying off loans.
Why Student Loan Debt Harms Mental Health
There are many reasons why having student loan debt affects the mental health of borrowers. Many Americans with debt end up putting off other financial milestones, like having a baby, buying a home, getting married, saving for retirement, or even going on vacation.
The system is also often confusing to navigate, and in addition to not understanding how their loans work, many borrowers have trouble understanding their repayment and relief options.
That confusion can lead to higher balances or other costly mistakes.
“A lot of people have income-driven repayment plans that lower what they have to pay each month,” said Bridget Haile, director of operations at Summer, which helps borrowers navigate the repayment process. “The problem is that for many people, even if you make full payments on time every month for years, you’ll often see your loan balance go up instead of down.”
A growing balance, even when you’re making payments, is psychologically difficult to deal with, he said. Also, if someone has defaulted or been unable to make consistent payments, it can hurt your credit score.
Whats Next
The moratorium on federal student loan interest and payments has helped millions of borrowers.
The Biden administration also relaxed the rules for PSLF, making it easier for some borrowers to get discharged, and eliminated all debt for some borrowers, such as those who were taken advantage of by for-profit institutions.
Still, many borrowers are unsure how they will resume payments and have difficulty navigating the systems that can provide relief. Currently, payments and interest accrual will begin again in May.
Quick and her husband aren’t sure how they’ll make their monthly payments when they finally restart.
“We’re both pulling our hair out and wondering what to do, because we can’t afford a $1,100 a month student loan,” she said. “It just makes our heads spin.”
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