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My Turn: An education in debt



For the Monitor
Thursday, November 09, 2017

I am on a mission to build public awareness around the student loan crisis many adults face. My overall objective is to see real, meaningful, far-reaching relief through effective legislation. I graduated from college 19 years ago. I have been teaching for 19 years. I have served three different local communities as a dedicated, hard-working professional with a master’s degree. I have been repaying my student loans since 2002.

Here is my loan scenario in numbers:

Total principal owed: $60,329

Total to be paid back: $106,090

Interest paid as of October 2016: $39,830

Interest rate: 6.75 percent

Original amount borrowed (pre-interest): $37,920.

Why haven’t I refinanced?

Refinancing continues to be unaffordable. Quotes I’ve received require a shorter repayment term, making my monthly payment unaffordable despite lowering my interest rate. Refinancing opportunities were not available initially when I graduated. Currently, my payments represent 11.5 percent of my net monthly income. Thirteen years ago, my loan payment represented nearly 20 percent of my monthly net income.

Why isn’t my interest rate lower?

My rate is fixed unless I refinance. In 2001 rates were lowered at the federal level just below 6 percent and in 2002 rates dropped to 4.06 percent. Each time I contacted my lender, my loan was excluded despite being a recent graduate because I was in the workforce and no longer a full-time student. I was a part-time student taking courses while working to complete some certification requirements, however I was still excluded. I started my career teaching in a rural New Hampshire district; my net pay was just over $17,000 in my first year with a master’s degree. It was a struggle to pay rent, utilities, other bills, and to feed myself in those days. Yet, my dedication to helping children and contributing to society was and is strong.

Why haven’t I applied or been approved for forgiveness as a public educator?

I have been rejected by each opportunity I have pursued. In the beginning of my career every forgiveness program had requirements I missed by a fraction – requirements included “high-need district,” low salary requirements (note: my net salary started at $17,000), Title I status (which my first school lost for a time due to a reduction in poverty), and simply having the wrong loan program. Programs that required me to travel across the country to teach still had a associated costs I could not absorb despite working two jobs for my first five years of teaching.

A few years ago, I became aware of the Public Service Loan Forgiveness Program, which began in 2007. I applied with full anticipation of finally gaining some financial relief. Again, I did not qualify because my loan was under the wrong program. The Federal Family Education Loan Program, which most students financed their Stafford loans through well up to the year 2000, was excluded from this benefit. Only students under the Direct Loan Program are able to receive this benefit. The Direct Loan Program was a new pilot program in 1992. This type of loan was phased into the congressional budget in 1993. Colleges and universities volunteered to promote this new loan program, however 10 years later more than half of student loans were not Direct Loans. The Direct Loan Program was not available to UNH students, initially. I had no rationale nor forethought that compelled me to switch programs or to investigate other programs with no known benefit. Therefore, the federal government’s decision to apply Public Service Loan Forgiveness strictly to Direct Loans appears arbitrary and unfair.

I contacted the Direct Loan program and inquired about refinancing with them. Unfortunately, under that program my payment would have more than doubled making repayment unaffordable.

How did pursuing an education degree add to my debt?

Education programs that are held in high regard often demand an unpaid year-long internship. I worked full-time as an intern while taking classes. During this time period, I could work only part time (for pay) on weekends. It was necessary for me to take on more debt that year to pay rent and to feed myself as a young student. I lived off campus to save money. (This program prepared me well and provided an invaluable experience.)

What have I done to help myself?

1) I consolidated my loans to make them more affordable.

2) I’ve been paying my loans despite many difficulties.

3) I have applied to every possible forgiveness and financing opportunity that could have helped.

4) I have used forbearance and deferment options when I could not make payments.

5) I have furthered my training, education and innovation in my career leading to new jobs, track changes and higher pay. I now work in one of the highest paying school districts in New Hampshire.

6) I pay an “income sensitive” payment despite my salary level.

7)I have written a dozen letters. In the spring of 2016 Jeanne Shaheen took a special interest and inquired on my behalf with the Department of Education. While I am eternally grateful that any public official has acknowledged my issue, her office discovered what I had already learned on my own. There’s no relief for someone in my particular situation.

8) I was interviewed by Jillian Berman, a journalist for Market Watch, in October 2016. I hoped to shed light on my and others’ student loan plight.

9) I am writing this letter that explicitly illustrates the financial dilemma I have faced.

How has carrying student loan debt affected me?

What I’ve learned is that debt begets debt. My student loan debt has been attached to my credit and debt ratio since my entry in fully independent adulthood. This debt has caused me to acquire higher interest rates for loans and credit cards. Saving money has been very challenging and nearly impossible most years. The first five years of my career I struggled to support myself.

When you lack a large savings buffer or a safety net, things can go awry quickly. Between emergency car repairs, medical bills, home repairs, my husband’s life-threatening work injury and income loss, we have not been able to improve our financial scenario. Neither of us come from families that have the means to rescue us. There have been no windfalls that have allowed us to click the “reset” button.

I am grateful for my education. I have never sought a “free ride.” I believe I have paid my fair share, however there’s no current legislation or loan programs to help thousands or possibly millions of people like me.

(Valerie Wolfson lives in Lee.)