Help grads manage student-loan debt
By Deanna Dungee A few years ago, I graduated with a business degree in sports management from Alvernia University. I left with $100,000 in federal and private student-loan debt held by my mom and me. Payments on my high-interest-rate loans through Sallie Mae and Nell Net are about $800 a month. Worse, my private loans are ineligible for income-based repayment and have interest rates as high as 8.125 percent.
By Deanna Dungee
A few years ago, I graduated with a business degree in sports management from Alvernia University. I left with $100,000 in federal and private student-loan debt held by my mom and me. Payments on my high-interest-rate loans through Sallie Mae and Nell Net are about $800 a month. Worse, my private loans are ineligible for income-based repayment and have interest rates as high as 8.125 percent.
Thankfully, there's a plan that could bring down my debt level and make repayment more manageable. This week, the U.S. Senate is expected to vote on the Bank on Students Emergency Loan Refinancing Act. This bill, which has bipartisan support, would enable federal and private student borrowers to refinance their loans at today's market rate, which is about half what I'm paying now. Thirty-eight senators, including Pennsylvania's Pat Toomey, kept the bill from coming up for debate earlier this summer.
College is supposed to be the key to getting a good job and earning a decent living, but my debt has left me with no other option than to put my life on hold. Despite having a full-time job, I am among the one in three young Americans who have moved from a dorm room back to my childhood bedroom. I am thankful my mom was willing to take me back in, because making ends meet while juggling rent and student-loan payments on my salary would be virtually impossible.
Paying back my loans is very important to me, and I feel awful that my mom is tapping into her 401(k) to help me with the payments. Without her help, I would probably join the one in eight student borrowers in default. If the Senate passes the student-loan bill, my family won't have to choose between defaulting and having the resources for Mom's retirement.
I'm not asking for a handout. I just want to pay down my debt, like millions of student borrowers living in uncertain times. The White House estimates that the Bank on Students bill would help up to 25 million borrowers save on average $2,000 over the life of their loans. And a recent report looking at what the proposal could mean for Pennsylvania found that nearly 60 percent of the state's two million student borrowers could benefit from being able to refinance.
I hope all U.S. senators will think about people like me and my mom when they consider this bill. They need to show that they can put politics and party loyalty aside and do what's right for the people of the commonwealth and the nation.