Having student loan debt is a common issue for educated folks across America, especially among millennials. According to reports, student loan debt amounts to $1.53 trillion in the U.S. Owing back student loans negatively affects your credit and puts a damper on the idea of having a financially stable future. Senator Lamar Alexander believes he has a solution to this problem that is affecting 44 million borrowers.
FOX News reports that Sen. Alexander is trying to pass a bill that would have student loan payments deducted directly from your check. The amount that is paid back would be income-based and would not be more than 10 percent of your income.
I am very intrigued by this idea. However I am not too sure if it will help or hurt me. It is unclear whether this plan will only apply to federal government loans or loans from private lenders or both. For someone like me who pays divides $1,150 a month between Navient (formerly known as Sallie Mae), the federal government and Discover student loans, I am hoping it applies to private lenders and the federal loans because quite frankly, I’m tired of being financially drained. If all of my loans are consolidated and my payment is only 10 percent of my income, my monthly payments would be reduced by almost $700. Republicans are not our favorite people right now, however this payment plan could be the best thing I have heard from that side of the political party yet.
The financial burden of paying student loan debt wears on my mentally. I fear that I will never be able to buy a house because saving and vowing not to touch that money isn’t easy when you have New York City rent, living expenses and student loans hanging over your head. I would like to buy a car one day but because of my loans buying a car and paying car insurance can’t fit in my budget. The interest I am paying is a major killer, which amounts up to almost three times the principal amount that I owe.
I understand that I signed up for this when I decided to get a bachelor’s degree and two master’s degrees and that the idea is that graduates will get a job that can help pay back those loans. However, the issue is that that doesn’t happen. The jobs do not pay enough to help take care of other expenses along with a staggering amount of student loan debt. Furthermore, all of the loan providers do not provide income-based payment options. Though Navient and the federal government have income-based payment plans, Discover does not and their payments have continued to increase throughout the years.
Having this debt feels financially crippling and I’m confused about how the economy is supposed to flourish if 44 million people are having the same problem.