“ There is a real fear of dying in all of this ”
More than 8 million borrowers over the age of 50 hold 22% of federal student debt, or $ 336.1 billion.
Insider spoke to borrowers whose debt burden is that they fear they will not be paid in their lifetime.
A borrower started with a debt of $ 79,000, paid $ 175,000, but still has a balance of over $ 200,000.
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At 59, David Wise has $ 236,485 in outstanding student loans, according to documents reviewed by Insider. This is after making about $ 175,000 in payments over four decades.
He said when he graduated from law school with the goal of becoming a public interest lawyer, his debt was around $ 79,000 and he initially only took out $ 7,500 in loans. when he entered undergraduate school in 1981.
How is it possible?
“I feel responsible and have paid a considerable amount on my student loans,” Wise said. “But it really is a debtors prison.”
It’s not like Wise hasn’t found a job. He started in a legal career, but the low pay that comes with community service forced him to work in a restaurant to make ends meet, he said. He later moved to the restaurant service full time, but a divorce drastically changed his income.
In the end, he said his paycheck was garnished and he defaulted on his student loans, leading to a build-up of collection and penalty fees and an increase in interest, while s’ trying to get enough money to pay off his balance.
He said he was now earning a viable income, but not enough to pay off the accumulated debt, and he didn’t know what to do about it.
According to an estimate by the American Association of Retired Persons released in March, 8.4 million borrowers aged 50 and over hold 22%, or $ 336.1 billion, of total federal debt, with interest up to 10% per year, adding to the growing stack.
“Student debt doesn’t just crush young people: 6.3 million borrowers aged 50 to 64 and nearly a million people over 65 are still paying for the education of a loved one or theirs, ”Senator Elizabeth Warren of Massachusetts told Insider. “Student debt is also a major contributor to the increase in the amount of senior debt overall.
In a CNBC editorial that she co-wrote with Senate Majority Leader Chuck Schumer in February, Warren pointed out how the government will even be seizing Social Security benefits to offset what is owed in student loan payments. In 2015, she said, the government seized social security checks from nearly 114,000 borrowers aged 50 and over.
Like many of his peers, Wise does not expect his loans to be repaid until his death.
“I have no motivation to pay more than what I’ve already paid,” Wise said. “I have done my duty to the student loan program on several occasions.”
“ You are on a hamster wheel and you will not get off ”
Linda Navarro, 70, borrowed $ 20,000 in 1990 for her graduate studies, according to documents reviewed by Insider. She owes $ 145,000 and her recovery is estimated at $ 212,544.
“When student loans took over my life, I stopped waiting for anything,” she told Insider. “You’re on a hamster wheel, and you’re not going down. You know you’re never going down.”
Prior to attending graduate school, Navarro had served in the Navy, but was not eligible for loan remission under the GI Bill because she missed the 10-year window to use the student loan forgiveness bill benefits. Due to lost earnings while studying, she said she ended up losing her home and was not even able to complete her graduate program.
Navarro said she initially tried to pay off her monthly loans that she could afford, but as the bills increased she abstained. She later learned that her salary was being garnished, and now she is on an income-based repayment plan, which sets her monthly payment based on income.
“There is a real fear of dying in all of this,” Navarro said. “And the best part is that my family has to prove that I’m dead for the loan to die too.”
‘It’s a corrupt loan system’
The student loan system isn’t broken – it’s corrupt, Navarro said. She referred to her substantial loan balance and said she received a lack of help from her loan officers, government and elected officials.
“It is a corrupt loan system that has been authorized to cause excruciating agony and suffering,” Navarro said. “It’s enough. I want my life to come back.”
According to a Wall Street Journal report, Jeff Courtney, a former executive at JPMorgan, found that for more than three decades the government had made the student loan system look profitable when in fact growing borrowers were in default.
When examining the reasons why his findings did not meet the government’s profit expectations, Courtney found that Education Department budget officials did not examine borrowers’ credit histories to estimate the likelihood that ‘they would repay their loans, the Journal said. And when borrowers defaulted, the government continued to charge interest, he said.
The education department did not respond to Insider’s request for comment.
‘I just want to be represented’
Warren and Schumer’s CNBC editorial said the student debt crisis effectively punishes people pursuing higher education.
“Older Americans with student debt include people who may not have had the chance to graduate when they were younger because they had families to support, but who attempted the American dream and went to college later in life, ”lawmakers said. . “Now their student debt is eating away at the retirement security they’ve worked so hard for.”
Theresa Teders is one of those people.
Now 67, she graduated with a bachelor’s degree in 2004 and a master’s degree in 2008. She entered the social service industry after graduation, working with adults with special needs, just before let the Great Recession strike.
After Teders lost the job she attended school for, she started driving for Uber and Lyft, but the pandemic has also affected the odd-job economy job. Teders therefore lives off Social Security and unemployment benefits and carries a student debt of $ 46,000.
“I just want to be represented,” Teders said. “Everyone I talk to is like, ‘Yeah, seniors should get their debt forgiven too.’ But it’s never voiced, and if it’s not voiced, how do the government and federal lawmakers know we care here? “
Teders and millions of other Americans rely on Social Security to help them pay for their basic needs, and Warren and Schumer said removing those benefits left seniors in a “cycle of inescapable debt.”
Many Democratic lawmakers, foremost among them Warren, keep pressure on President Joe Biden to write off $ 50,000 in student debt for every American. Amid his calls to use his executive authority to get the job done, Biden asked the education and justice departments to verify if it was in his power.
There is a clear solution, according to Warren. She told Insider, “It’s time to write off student loan debt, and President Biden can do it using existing executive power.”
Teders said that any form of forgiveness would benefit her greatly and that she wanted to make sure older Americans were not left out of the conversation.
“When you’re older and you’ve spent years and years giving back to the community, there are very few people aged 65 and 70 or older who will be able to earn that kind of money to pay back. these loans, “Teders said.” We use what we have to survive and live.
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