- New Jersey
I can vividly remember sitting on my sunroom floor, with my newborn and my husband, signing the paperwork to consolidate my loans with my husband’s for Sallie Mae. We were called by a representative, who suggested that we consolidate our undergraduate and graduate Direct Loans together so that we would have one lump payment, and take advantage of a lower interest rate. It was September 2006, we had just purchased our first home, had a newborn, and had just started our first teaching jobs. We were confident that we had made the right decision based on everything the representative had told us. We began paying our loans anticipating paying for the 20 year term we chose for repayment. Had there been any inkling that the PSLF program would be created, and our new loan would be excluded, we never would have agreed to consolidate. At this point, our monthly payment was $421.69 and our student loan balance was $73,038. We have continued working as teachers, had three additional children. There came a point that I lost my job, and we were a one income family. We couldn’t pay our loans, and eventually Navient started garnishing my husbands pay. We had to short sell our house in 2010. We started renting and quickly got back on track repaying our loans in order to rebuild our credit. As we continued paying, our balance continued to grow, which, to creditors, was a red flag. Our student loan balance, which we had paid on since 2005, with the exception of the few months of hardship, was keeping us from being approved for a new mortgage. It took us until 2020 to purchase a home for our family. Our loans were not eligible for the Cares Act due to the loan title of FFEL, so we have been paying throughout COVID as well. Our current student loan balance, after paying our payments for over 16 years, is $78,487. After paying around $400 a month for SIXTEEN YEARS, our student loan balance is more than what we actually took out.
As it stands today, we see hundreds of thousands of borrowers receiving forgiveness for their student loans due to the newly created waiver and TEPSLF program. The premise of this program is amazing, and truly seeks to forgive loans that were paid for the ten year payment period. It has made accommodations for payment types and loan types. Borrowers taking advantage of this program held Direct Loans and FFEL loans and even managed to consolidate their Parent Plus loans, which aren’t even for their own education, but their child’s education, and receive forgiveness. Most of these borrowers are also receiving actual refunds for overpayment of months over the 10 year requirement. Borrowers who consolidated with their spouses and were the lucky recipients of Direct Joint Consolidation Loans instead of FFEL Joint Consolidation Loans, have had their loans separated into his/hers, and those who were public servants have had their loans forgiven. Yet there are hundreds of borrowers, who were convinced to enter a now defunct joint consolidation program, that are not eligible, solely due to the name of our loan. At the current rate, we will never, ever pay off our loans. We cannot afford the income based repayments, which will put us at a monthly payment of over $1100 a month. It is defeating to see all of these other public servants receive both forgiveness and refunds, knowing that we will never be eligible, solely due to the name of our loan. Is there a difference between a Direct Spousal Consolidation loan and an FFEL Spousal Consolidation loan? Why is it that the Direct version can be separated and forgiven as per the PSLF rules, but the FFEL loan cannot? Why are we being punished for a program that was found to be so defunct, that it was discontinued?