- Private student loans are not included in federal student debt forgiveness conversations.
- Insider spoke to Karla, a recent graduate with a student debt of $ 143,000, of which $ 91,000 is deprived.
- She’s falling behind on her payments and wants her student loan company to help her.
Karla graduated from Sam Houston State University in May 2020, and she continues to call her student loan company, Sallie Mae, due to the anxiety it causes.
She has a student debt of $ 143,000, of which $ 91,000 are private loans, the payments of which were not suspended during the pandemic. She’s falling behind.
“It’s really my private loans that are slowly killing me,” the 26-year-old said, demanding that her last name not be released because she feared legal repercussions.
Housing on campus was expensive and jobs on campus only allowed part-time work for minimum wage, so Karla turned to Sallie Mae to help fund her education and additional expenses on top of that. federal aid she had already received. But once she took out these private loans, her debt quickly piled up thanks to the high interest rates. Even though she kept up with her monthly payments, she didn’t even touch the amount she originally asked to borrow.
President Joe Biden extended the pandemic pause in student loan payments until the end of January, but most private student loans were not included, meaning people like Karla had to continue paying off student debt during a period of extreme financial uncertainty.
“There were times when I didn’t eat and I was very stressed to pay my payments,” said Karla. “Literally, I felt like I was working to pay off loans. I wasn’t working to live or have a life – I was working to pay off loans.”
“You have to pull tooth and nail to get help”
Insider has previously reported on the difficulty federal and private student loan borrowers have in getting help from companies collecting their debts, and the situation was no different for Karla. She said while in college she tried to educate herself as best she could about how to pay off her loans, but since graduating during a pandemic, her financial situation changed and she didn’t have the money to make the payments Sallie Mae requested.
“They initially asked me to pay $ 1,000 a month after I graduated,” Karla said, which she couldn’t afford. “So I called and they said I could pay $ 900 a month instead. If I can’t pay $ 1,000, what makes you think I’m going to be able to pay $ 900? “
Since she had other obligations besides her loans, like paying for food and gasoline, Karla fell behind on her debt and said she wanted the private student loan portfolio to receive the same. be careful with federal student loans, so she would have more options to pay off her debt and request a loan forgiveness. Private loans represent 7.89% of the total outstanding student loans.
“They are all for giving you a credit card, but you have to be sticking tooth and nail to get help paying off the loans,” Karla said.
Josh Mitchell of the Wall Street Journal reported on Sallie Mae’s origins in his book “The Debt Trap”, claiming that Congress created Sallie Mae in 1973 to help people get an education, but the company has grown to give the priority to “huge profits” from loans. to borrowers, “often leaving borrowers on the sidelines.”
Sallie Mae did not respond to Insider’s request for comment.
Even though private student loans make up the majority of Karla’s debt, she still has $ 52,000 in federal student loans and said “every amount counts” when it comes to loan forgiveness.
Biden has campaigned to write off $ 10,000 in student debt per borrower and Democrats are pushing to raise that amount to $ 50,000, and Karla is hoping Biden and Congress will see that the loan cancellation is something “that must happen “. But the president has yet to comment on the timeline on whether, or when, that forgiveness will occur.
“It’s about helping people live better lives, and if that means forgetting their student loan debt, then do it,” Karla said. “I’m hopeful, but I’ll believe it when I see it.”