I’m not quite sure where to start with advice on education and precisely how to help pay for your child’s education, but I will tell you my story. A few weeks back, I wrote about the financial issues related to borrowing money for school. https://beingkevin.com/2020/04/17/an-open-letter-to-the-congress-and-senate/ I think I have some excellent ideas. Given today’s environment, some laws have changed to help a bit along with the thoughts in my post. Unfortunately, they did not go far enough or help me.
I am not an advocate for free education, nor am I an advocate for forgiving the loans people took, and that includes me. However, it should never be a situation that becomes impossible to do the correct thing. When your child wants to get a better education, you do just about anything in your power to make that happen, which includes financing that education. There is something wrong with a system that becomes so costly that it makes it impossible ever to be debt-free.
I co-signed loans for my daughter to complete her undergrad. It was quite a bit of money. I have been paying those religiously for several years. As I am getting older, it has become apparent that I would never get these paid off; they had timelines of 20+ years, which would take me into my late 70’s working, something that is not a possibility.
These loans were both federal and private. Problem number one is the federal loans if these do not get paid it is likely the government with taking some of my social security. That income will be critical to me in retirement, and I could not have that. Fortunately for me, since they were considered parent plus loans, I was able to refinance these into a private loan with sofi (great company and experience) quickly. I was able to lower my interest rate and the duration, and that helps position me to pay these off by the time I retire.
Now the ugly and my warning. The private loans were with Navient; I strongly recommend you stay away from this company. Even today, with interest rates near zero, they had increased the rate to 12%. I have been paying for these for years and making no progress. Every time I pay more, it never covers the interest. Navient has been getting sued for years, and I did not know this when my daughter entered college. I also am not saying I’m blameless. https://www.nerdwallet.com/blog/loans/student-loans/navient-student-loan-lawsuit/ This is the latest story I can find on Navient and lawsuits but google for yourself.
This week I could not take it anymore. I took every penny I had in my savings account and tens of thousands from my retirement account and decided to pay Navient off. There was no other way. I called Navient and asked if we could negotiate a small discount, about 5%. I did this to allow me to have some liquid cash on hand, and the answer was no. Mind you; this would not be a loss to the company, I have been paying for years. I asked to speak to a manager, and the response was the same, no. I asked to talk to another manager, and the reply was no. They were not willing to help, not even a penny. I am not skirting my responsibility, I borrowed, and I will pay. However, there is legal, and there is morally disgusting. What they did is legal what they are doing is ethically horrible.
Here is my advice, share this and learn from it. Stay away from this company and never borrow money like this that could jeopardize your future. There are options. First, go to a two-year school, the education is just as good, everything is transferable to a four-year school, and you save a boatload of money. If you have to borrow, I would use a guide never to borrow more than you can pay back in 2 years. Finally, there are so many online options now, especially in technology. Check out udemy.com or codecademy.com. Even Harvard has 60+ classes free online. You do not need to enslave yourself because you have been sold a bill of goods you need a four-year degree, you don’t, and you certainly should never get in bed with a company like Naviaent. They are nothing more than a loan shark.
I will pay the money, it will hurt, but I have a few more years to work. I hate that I just parted with all that money, but I will get over it. I have a sense of relief that this monkey is off my back.