My private student loans are preventing me from accessing homeownership
- Reading the financial jargon at 18 was overwhelming, so I just signed off on everything I needed to start class.
- Unlike federal student loans, private loans are not covered by student loan forgiveness plans.
- I’m worried that I will never be able to own a home because of my student loans, but I remain optimistic and focus on solutions.
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When I was 18, I was already overwhelmed by the amount of choices I had to make.
What career path should I pursue? Which school will I choose? Do I go with the school that gave me the most scholarships, or the one that offers programs that interest me the most? How will I prepare myself mentally, emotionally and physically to leave my parents’ house for the first time?
With all of that to think about, finding student loans was the last thing I wanted to think about. All I wanted was to start building a career and a life that I was passionate about as soon as possible. According to my school, I was eligible for federal student loans, but they were not enough to cover tuition costs.
Fortunately, my mom helped me by co-signing my student loans. However, reading the financial jargon at 18 was really overwhelming and I just signed off on everything I needed to start class.
This is how signing a private student loan has changed my life.
I barely reduced the principal amount of the loan 10 years later
For a very long time, I was too ashamed and too guilty of my situation to even see on my Navient account. Once I finally checked it out, I realized that the principal balance had actually increased even though I had made regular payments.
Because I went through financial difficulties, I put my loans on hold for a few months. During this time, my loans were accumulating capitalized interest. To be fair, if my mom’s credit weren’t on the line, I would choose not to pay my Navient bill just to build up a healthy emergency savings fund.
I’m afraid I’ll never be able to save for big steps
Because my monthly payments are so high, I’m afraid that I will never be able to buy a house or start my own family. Whenever I make my monthly payments, I fantasize about how I can use that money for family planning instead, especially since fertility treatments for LGBTQIA + people are sometimes not covered by insurance. sickness.
Because I don’t have a lot of credit, I feel trapped in a cycle of paying debts and seeing my savings dwindle because I can’t afford to deal with emergencies. Unlike federal student loans, private loans are not covered by student loan forgiveness plans. Even if President Biden gave Americans nationwide student loan forgiveness, I would still pay for private loans.
Once I realized how predatory the student loan system was, I decided to focus on solutions.
Earlier this year, I learned that 89% of fully employed borrowers were not financially secure enough to repay their student loans. Seeing that number – 89% – helped me realize that I’m not the only one battling my student loan debt and the giant student loan companies don’t really care about our quality of life.
Once I stopped blaming myself for signing these papers without reading them, I was able to focus on the solutions. In 2022, I plan to start refinancing my student loans for a shorter repayment term and lower interest rates. I will also be working with a financial planner to build an emergency fund and start taking control of my finances.