(WGN) – With the country's student loan portfolio at $ 1.7 trillion, the hardship never seems to end.
One in four Americans has a college loan debt. While many of them are working to repay the loans, most are financially under water years later, even decades later. Laura Allen of Chicago is one of many to still have college bills as she nears retirement.
A married 1992 college graduate, the married mother of three graduated from National Louis University. But that success came with a $ 12,000 loan that grew to over $ 30,000.
Laura Allen of Chicago was in her early 30s when she graduated from college. Almost 30 years later, she tells WGN that she is still paying back her student loan. (Photo: Submitted)
Allen is now almost 60 years old.
"I actually added up my payments one day and almost wanted to cry because I paid back more than $ 12,000 on my student loan," Allen said.
Respect and forbearance played out, but she said she always paid the minimum. Even so, she still couldn't get out of her student loan debt. Allen says she is angry, hopeless, and frustrated.
"I may not be the only one in this situation, and I know even a loan shark would negotiate," she said.
Personal finance expert Terry Savage says the sad reality is that lenders don't bargain.
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"Student loans are the motel of finance," she said. "You get in and you're trapped."
Your idea of eradicating the problem is simple.
"Lower the rate to about what the government pays 1% and then just let people pay out the principal," she said. “A lot of people like Laura have already paid the headmaster. That's the fair way. Takedown the excess loan shark interest. Let people pay back the original loans. "
In 2020, then-Democratic presidential candidate Joe Biden, if elected, pledged to help financially troubled students by providing $ 10,000 in loans. Now Senate Majority Leader Chuck Schumer and Democratic Senator Elizabeth Warren want the student loan burden to be reduced by $ 50,000.
With Biden under pressure, Savage believes that Congress needs to formulate a better solution while taking into account those who have made their loan payments over the years.
"So unfair to people who have already paid back their loans made a big dent in them, or to parents who have saved and saved," said Savage.
Biden will ask the Justice Department to review his authority to pay off the student loan debt
For cases like Allen, several years after he retired, Savage says the government has different social security plans.
"If you don't pay back your student loan by the time it is time to collect your social security, they will garnish your social security benefits," she said. "In fact, it has happened to more than 115,000 retirees."
This is Allen's worst fear.
"We cannot destroy the entire lives of retired people after they pay back the principal on their loan," said Savage. "It's time to adjust."
The philosophy applies to aging students as well as parents and grandparents who have helped their children and grandchildren with student loans. Before the pandemic, slightly more than half (56%) of the federal government's outstanding student loan debt was actively repaid in the second quarter of 2019. All others were in default or in some form or forbearance.
Federal student loan payments and interest will continue through 2021
Another breakdown concludes that women hold two-thirds of all student loan debt in the United States. Additionally, 20 years into college, the middle black borrower owes 95% of their student debt, compared to just 6% for the middle white borrower.
Despite the financial crisis, Allen expects Congress to give her a lifesaver.
"I hope I can do something with Congress because I just can't pay back $ 30,000," she said. "I can not do it."