Student Loan Forgiveness

My   higher education cost me $66k (plus interest) .

I was happily under the impression that I was eligible for the public service loan forgiveness program passed in 2007 (forgiving loans after 10 years of consistent payments). The program provides loan forgiveness to public/non-profit/educators/health workers, knowing that these public service sectors pay far less than the private sector and yet society needs good teachers, etc.

Since I’ve only ever worked in the non-profit/public sectors, I was excited when I first learned that I may someday vanquish the financial burden of being educated. But now that I’ve been looking over requirements closer, I think  I’m ineligible because my loans are through the Federal Family Education Loans program, not the Federal Direct Loan program. Moreover, you can only consolidate once (without adding more student loans), and I only wish that I had read this fine print a few years ago when I learned of the program.

Here are my basic loan details. I finished graduate school in June 2005, and consolidated my undergraduate and grad school loans shortly thereafter. The total loan amount was $61k (down from the grand total of $66k), since I had been diligently making monthly payments since 2000. My payments for the first three years averaged $500, but after I went back to school I dropped down to the minimum $288 monthly installment.

The loan has a 3.25% fixed interest, which sounds reasonable but really adds up. In the past 25 months, I’ve paid $7,500 on my student loans. Only $2,603.55 was paid on principle, and $4896.45 on interest! So, today after over ten years, I still have a total of $44k in student loans.  This is obviously a financial bummer, because I was looking forward to  getting rid of my monthly student loan payment of $288  by 2017 (still an additional $20k in repayment).

On a side note, I found a site that proposes forgiving student loans to stimulate the economy. I couldn’t agree more.

Do you have student loans?

Sustainable Family Finances 
The story of a family creating an abundant and sustainable life.

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