Student loans: a necessity for millions of Americans each year. The debt they're left with is now topping one-trillion-dollars. With Little Rock rounding out the top of the list for cities with the most student loan debt.
The study ranks Little Rock number six in cities with the most student loan debt, with a median balance of $21,031. It also found nine out of the top 10 cities are below the Mason Dixon line.
"That doesn't sound quite legitimate to me,” said Tony Williams, the Director of the Arkansas Student Loan Authority, a division of the Arkansas Development Finance Authority. "Arkansas overall is 31st in the country in average student loan debt for graduates, so for Little Rock to be sixth is a little questionable. But we don't know exactly where they receive all their data."
But for the 44 million Americans leaving college with student loan debt, the numbers aren't hard to imagine.
"There's so much out there. It's very confusing,” said Peggy Cosgrove, a registered dietician.
Johanna Thomas had a similar experience.
"It's what came after and the payback process that has just been a nightmare. They make it impossible to pay back,” Thomas said.
"Even when you catch all the breaks, it's still difficult because the system demands so much of you, and the interest rates are so high,” said local attorney Kate Fletcher. “The stakes are so high, and at some point, something's got to give."
The three women I spoke with all used scholarships and other means to pay for their undergrad educations but wound up with anywhere from $8,000 to nearly $100,000 in student loan debt after graduating with higher education degrees.
"Paying it off at an entry-level salary, you're paying the minimums because you don't know what else you're going to need money for,” Cosgrove said.
Fletcher had a similar experience between graduating from law school and passing the bar exam.
"The only loans available to me as a graduate student were all unsubsidized, meaning while I was in school before I even had a job,” she said.
Each of the three says they knew the debt would be with them for years after graduation, but things like mandatory deferments and their loans being bought and sold threw them for a loop.
"I got everything I asked for very quickly, at a pretty decent interest rate. However, later on, that increases. They sell your loan to somebody else. They sell your loan to somebody else. The more you try to negotiate it, you're continuously fighting to keep your interest rate low, which becomes more and more difficult,” Cosgrove said.
"I think that the Public Service Loan Forgiveness and how it's being handled is pretty ‘scammy,’" Thomas said.
She is a professor at The University of Arkansas. She got her doctorate planning to apply for public service loan forgiveness, a program that forgives debt of public servants after 120 payments.
"They make you take a six-month deferment right after you graduate, so you're not even allowed to make payments for six months," Thomas said. "Then once you start, it was probably about two years before we could actually get in the program, before we could find somebody to say, 'yes you're eligible, yes we have a program, yes, this is the program.' Because nobody knew. They kept handing it off to somebody else."
She says her loan has been bought and sold so many times, she's only been able to make four years’ worth of payments in the last seven years.
"A lot of people make life decisions, thinking their loans will be discharged in 120 months, so you plan kids around that, you plan housing around that, car payments, daycare," Thomas said. "While the debt is there, you never know what your payment is going to be. You never know when you're going to have a payment. We are willing to pay it back. That wasn't the issue. It was more that we just never knew when that was going to happen."
Hoping to get out from under debt, Fletcher and her husband have reorganized their financial plan to pay off student loans faster.
"There's always choices that are going to have to be made when you take out student loans, and sometimes it's really a lesser of two evils,” Fletcher said.
The ugly truth is: no matter what comes up or how long you put off the debt, it's always there.
"Eventually you will have to pay,” Williams said.
His office works with students and graduates each year to make sure they're getting a fair shake at student loans.
His advice:
- Look for employers that offer student loan forgiveness.
- Parents: invest in an Arkansas 529 plan at your child's birth to begin saving.
- And finally: don't put it off.
"Sometimes we just have to tell students it's time to write a check. The federal government will not forget you owe this debt,” Williams said.
If you’re looking for individualized help, Williams says you can always call the Arkansas Student Loan Authority. He says it's important to speak with your loan service provide yearly to make sure everyone's on the same page.
Recent budget talks in Washington have included chopping the Public Service Loan Forgiveness program altogether.
Lawsuits have begun rolling in alleging borrowers were forced to repay more than they owed.
All three women are hopeful there will be more federal regulation in the buying, selling, and deferment of loans.