A Lack of Information Cost Me $50,000 in Student Loan Repayments: Don’t Let it Happen to You!

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Today I’m excited to bring you a guest post from fellow-blogger Christa.  She’s going to talk to you all about her experience with student debt.  It’s a perspective I can’t bring you as dragged out my education in order to get a degree without taking out loans, graduating debt-free.  But it’s a serious problem that effects so many people.  Today she’s going to give you some insider tips so you don’t miss out on any potential loan forgiveness!

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Do you have student loan debt? If your answer is no, congratulations! I am supremely jealous. If your answer is yes, then I can commiserate and maybe help guide you in the right direction.

Student loan debt is a problem that plagues many of us. We work hard, get into a good college, research the right career and major – then blindly take out loans to pay for it. Our adult self is left with the financial consequences of repaying the loans a teenager took out for the next 10-30 years.

I have a love-hate relationship with my student loans. I love that they helped get me through undergrad and pharmacy school and into a fulfilling career that helps people. I hate that I am now trying to pay off about $220,000 in student loan debt.

What I really, truly hate is that I lacked certain information regarding student loans when I came out of school. All else being the same, not knowing this single piece of information cost me nearly $50,000. So what is this information? The Public Service Loan Forgiveness (PSLF) program

This is a program available by the federal government to help those working for the government and public service non-profit companies.

I have seen three big reasons why people don’t use this opportunity:
1) Lack of knowledge about the program
2) Difficulty level to get on the program
3) Procrastination

To qualify for the PSLF, you have to have the right kind of student loans under the right kind of repayment program and work full time at the right kind of job for 10 years. After 10 years of making on-time, scheduled monthly payments the remaining balance is forgiven.

When I originally found out about the program, I had:
~The right kind of student loans
~The wrong kind of repayment plan
~The right kind of job

Unfortunately for me, since I was under the wrong repayment plan, the first 3 years of work did not count. A little bit of math tells me that because I did not know about the PSLF program, I will have to pay an additional $48,000 worth of payments!

I quickly realized I was not the only person who did not know about the program and was, therefore, paying thousands more than they need to. It has become my mission to spread the word about this program in order to help as many people with their student loan debt as possible.

Some specifics about the program:

~What type of job do I need?

  • Those who work for the government (example: military, police officers)
  • Those who work for public service non-profit company with a tax exemption code of 501(c)(3). (example: public libraries, non-profit hospitals) Tip: You can call human resources or even check your company’s website for their tax exemption code.

~Which type of student loans qualify?

  • Federal loans that were received under the Federal Direct Loan Program.
  • If you have student loans under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, you can consolidate them into the Direct Loan program in order for those loans to be eligible.
  • Sorry, but private student loans are not eligible 🙁

~What repayment programs do I need to be on?

  • Income Based Repayment (IBR)
  • Income-Contingent Repayment (ICR)
  • Pay As You Earn Repayment Plan
  • 10 year repayment plan (this one is kind of silly since you would have nothing to forgive after 10 years)

~What qualifies as an on time, scheduled monthly payment?

  • On-time payments- paid no later than 15 days after the due date.
  • Scheduled monthly payments- you must be in active repayment status for the payments to count. You can’t be in a grace period, forbearance, deferment…

~Where can I find out more?

  • You can go to the Federal Student Aid website. They have a bunch of information regarding student loans.
  • You can also come visit me on my site where I talk about all things personal finance including my step-by-step guide to the Public Service Loan Forgiveness program.

This is a guest post from Christa, the founder of ObjectWealth.com, a blog on personal finance and her journey to go from massive debt to building financial independence. She is also a hospital pharmacist and enjoys eating bologna straight out of the container.

*Featured image: ©Raven/PhotoXpress

14 thoughts on “A Lack of Information Cost Me $50,000 in Student Loan Repayments: Don’t Let it Happen to You!

  1. daisyprairieecothrifter

    Yikes – I am sorry to hear this! I didn’t graduate from a program like pharmacy, but I graduated debt free because I worked full time throughout my education (something I likely wouldn’t have been able to do if I was going to school for something like pharmacy). I am glad you are spreading the word though!

    1. Christa@ObjectWealth

      Thanks! Yeah, in Pharmacy school it is tough working more than a shift or two. It was worth it in the end, but it was quite an expensive route to go. I just want more people coming out of school to know what options are out there for them.

  2. Andrew@livingrichcheaply

    Wow, $50,000! Sorry to hear that. I remember looking into public service loan forgiveness a few years ago, not sure if it was different back then. I had about $90,000 in loans and worked in public service. The problem was that based on the calculator online I made too much…well my wife and I (they counted both your income and your spouses unless you file separately). Combined we made just under $90,000 which would ultimately require me to pay an amount similar to the 10 year standard repayment program and thus no loan forgiveness…taken into account that we’d get raises. Though my wife later decided to go back to school and had very little income, but that’s another story.

  3. Christa@ObjectWealth

    Yeah, some of my married co-workers have that problem also. I am glad that I was able to get on the program but it is really frustrating just thinking about all the years of payments that I was making that didn’t count. Eventually, I will get them paid off though and I am sure that will be an amazing feeling

  4. Kalen

    Good post, Christa. I know many people who have taken advantage of the PSLF program. It’s great that it’s out there. We have a program for people who join the military to have their student loans forgiven as well. It’s really great for the ones who know about it.

  5. Suburban Finance

    It really sucks that you have to pay almost $50,000 — but good for you to find out about it eventually. I was so fortunate to be able to graduate debt free, but I know some people who didn’t and I think this information could come in handy for them!. Thanks for sharing 🙂

    1. Christa@ObjectWealth

      That’s awesome that you graduated debt free! I really wish schools were better about educating students about the programs that are out there. But until that happens, I am going to try to spread the word as much as possible

  6. Jessi Fearon (@thebudgetmama)

    Oh student loans….how I loathe thee! I only wish my student loans could be forgiven but alas, I don’t work in the areas required. Thankfully though, I did not take out more loans that was necessary so my loans have been pretty manageable. Working on getting them paid before the 10 year mark…fingers crossed.


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