Older people are giving up hope of paying off their student loans before they die

While commenting on Alan Collinge’s Student Loan Justice site about much of what is being revealed here, I pointed out the problem with interest, interest on top of interest, paying interest before principal, etc. .

It is a problem. You never touch principle. I am very happy to see the Student Loan Justice site and Alan get the attention it deserves with this article by the Insider.

It is unbelievable, people are accruing interest during forbearance and paying all of the interest before paying principle. This does not occur with regular loans. Late payments over a period of time are harshly penalized. Much of the interest accumulated is what students pay first before principle.

Most of the issues with Student Loans results from the efforts of one person who started the process of attacking students who were late. Joe Biden started the attack on students with their loans in the nineties. He has limited any type of forgiveness or escape from the loans and the oppressive penalties, the interest on the penalties, and the interest on the interest.

I can assure you former President Trump did not go through the same penalties with his many bankruptcies. Our young and older are.

Joe needs to fix the problem.

Older people are giving up hope of paying off their student loans before they die: ‘There’s a real fear in dying in this,” Insider, Ayelet Sheffey

Linda Navarro, 70, borrowed $20,000 in 1990 for graduate school, according to documents reviewed by Insider. She owes $145,000 and has an estimated payback of $212,544.

“When student loans took over my life, I stopped looking forward to anything,” she told Insider. “You are on a hamster wheel, and you will not get off. You know that you will never get off.”

Before attending graduate school, Navarro had served in the Navy but didn’t qualify for loan forgiveness under the GI Bill because she missed the 10-year window to use the bill’s student-loan-forgiveness benefits. Because of income losses during school, she said she ended up losing her home and was not even able to complete her graduate program. 

Navarro said she initially attempted to pay off her loans in monthly amounts she could afford, but as the bills grew, she went into forbearance. She later learned her salary was being garnished. Now she is on an income-driven repayment plan, which sets her monthly payment based on income.

“There’s a real fear in dying in this,” Navarro said. “And the best part is that my family has to prove that I died so the loan will die as well.”

‘It’s a corrupt lending system’

The student-loan system isn’t broken — it’s corrupt, Navarro said. She referenced her substantial loan balance and said she received a lack of help from her loan servicers, the government, and elected officials. 

“It is a corrupt lending system. It has been allowing unbearable agony and suffering,” Navarro said. “It’s enough. I want my life back.”

According to a Wall Street Journal report, a former JPMorgan executive, Jeff Courtney; found for over three decades, the government had been making the student-loan system look profitable when in reality more and more borrowers were going into default.

When examining why his findings did not align with the government’s profit expectations, Courtney found that Education Department budget officials weren’t looking into borrowers’ credit histories to estimate the likelihood that they would repay their loans, The Journal said. And when borrowers defaulted, the government kept charging interest, he found.

The Education Department did not respond to Insider’s request for comment.

‘I just want to be represented’

Warren and Schumer’s CNBC op-ed said the student-debt crisis was effectively punishing people pursuing higher education.

Lawmakers: “Older Americans with student debt include people who did not have a chance at a degree when they were younger because they had a family to support. They took a shot at the American dream and went to college later in life. Now their student debt eats away at the retirement security they worked so hard for.”

Theresa Teders is one of those people.

Now 67 years old, she got a bachelor’s degree in 2004 and a master’s degree in 2008. She entered the social-services industry after graduation, working with adults with special needs, just before the Great Recession hit.

After Teders lost the job she went to school for, she started driving for Uber and Lyft, but the pandemic affected gig-economy work, too. So Teders is living on Social Security and unemployment benefits and carries a student-debt load of $46,000.

Teders: “I just want to be represented. Everybody I talk to says, ‘Yeah, older people should have their debt forgiven.

If it is never expressed it is not expressed, how does the government and federal lawmakers know we care out here?”

Teders and millions of other Americans rely on Social Security to help them pay for basic needs, and Warren and Schumer said taking away those benefits left older people in a “cycle of inescapable debt.”

Many Democratic lawmakers, foremost among them Warren, are keeping pressure on President Joe Biden to cancel $50,000 in student debt for every American. Amid calls for the President to use executive authority to get the job done, Biden asked the Education and Justice departments to review whether it’s in his power.

There’s a clear solution, according to Warren. She told Insider: “It’s time to cancel student-loan debt, and President Biden can get it done using existing executive authority.”

Teders: any form of forgiveness would significantly benefit her and that she wanted to ensure that older Americans were not left out of the conversation.

“When you’re older and have spent years and years giving back to the community, there’s very little 65- and 70-year-olds or older are going to be able to do to make that kind of money to pay off these loans,” Teders said. “We use what we have to survive and to live.”