This Picture Will Make You Think Forgiving Student Debt Isn't So Crazy After All

[hughee99]

108. I'm not suggesting student loans are great, I just don't think the numbers add up

and there must be more to the story if these numbers are true. The sign would appear to indicate she's been paying student loans faithfully for 23 years, that she borrowed $26,400, she's already paid $32,700 and that in the remaining years of the loan, she will still owe $45,276.63.

If she's paid $32,700 already, then she's paying $118 a month for 23 years. I have no idea what the interest rate is, but most student loans I've seen have been structured so that a student makes equal payments each month (I paid off several myself, and this is how it was for all of them), but that can't possibly be the case here unless she has another 383+ years on that loan.

For her to pay off the remaining 45,276.63 in the remaining 7 years (assuming it's a 30 year, I've never heard of longer for a student loan), she'll need to pay $539 a month for the next 7 years, which would mean that either she's been grossly underpaying for the last 23 years, or she agreed to some sort of crippling balloon payment at the end of her loan.

Many of the statements I've seen in support seem to me to imply that this is "the norm" but, if this is accurate, I'll bet this situation is extremely rare, if not unique, and is the result of either from some very poor financial decisions or some very bad luck over the last two decades. I started paying back my student loans not too long after this person did. I took out far more than her $26K and at 15 years, paid back far less than the $77,976 than her sign would indicate (though mine were 15 year loans and I did pay more than $118 a month on them).

A 30 year loan for $32,700 at 9% interest would be about 76K to pay off and that's probably roughly where the rates were back then (maybe a little on the high side) but the monthly payments would have been $212.42 and after 23 years she'd have already paid off $58K of that and only have about 19K left on the loan. The same loan at the same rate for only 15 years would have been $267 a month and she'd have paid it off 8 years ago (at a total of $48K). And that's if she didn't get a better rate on the 15 year than the 30 year.