Success, progress, innovation, and growth all require risk.
I am writing to urge your support for Congressman Hansen Clarke’s proposal HR4170, Student Loan Forgiveness. I would like to tell you why I am supporting this bill, which will help in healing the economy and help Americans put a foot forward.
Success, progress, innovation, and growth all require risk. I always thought that an Education would lead to a better standard of living, so I took that risk.
I entered college for the first time in 1985, and in 1994, I graduated with honors and a degree in Art History from the University of Cincinnati. At the time, Art History wasn’t considered a lucrative employment field, so after a year of retail management, I re-applied to school to pursue a degree in Interior Design from the College of Design, Architecture, Art, and Planning from the University of Cincinnati.
Unlike the first degree, it was impossible to work any amount of hours to amass any savings at a part-time job. So I was able to use some grants, credit cards, and eventually loans to finance my way through. Thankfully we had co-op, so I was able to work full time and gain experience every other quarter, however, it still wasn’t enough. Eventually I was able to find a decent job on campus that worked around my class and studio schedule. It helped, but not enough. As I progressed through the program, the projects started to cost more and more, so alas, I had to do additional loans and apply for additional credit. Long story short, I graduated with 65,000 in six different school loans that were each independently at 6.79%, I also had about 22,000 in Credit Card Debt. Doing what I thought was responsible; I placed my school loans into forbearance –after consolidating @ 8.125%, and paid off my credit cards. Much to my surprise, when I pulled the loans out of forbearance, my total had jumped almost 20k, through interest accrual and capitalization. Currently I have been paying 5 years, and after 42,000, my total, which doesn’t go down, hovers around 90,000+. Some months the 690.00 covers only interest, and other months, up to 1/3 goes toward principle, never more. I do understand and grasp the concept of amortization; however due to current financial issues, and a pay cut, the 690.00 obligation can’t be met some months, forcing me into further debts through loans etc...
I am now taking part in the Income Based Repayment Plan (IBR) that was presented as a temporary pause, and relief. My payment is now 380.81 and I need to re-apply yearly. Thankfully it’s forgiven after 25 years (I am unable to participate in the new Obama Plan), however, I will be taxed on that forgiveness at up to 20%, which at 71, will most likely mean yet another loan to pay the taxes on what is forgiven. Odd thing, I was told that the Government would cover the interest for the first three years, I see now that every payment goes to interest only and once more, NOTHING toward Principle, while interest still accrues and capitalizes DAILY. At this point I won’t have the loan repaid until I turn 71, at the same time I am saving close to nothing for retirement, and have wiped out my savings and exhausted a line of credit, to continue to stay current. The IBR, though helpful in some areas, to me serves as nothing more as yet another avenue for interest accrual and collection. Should I opt out of the IBR next year, I have the option to pay 1790.00 a month over 10 years, meaning I will pay an additional 136,000, which I know I won’t be able to do. My other option is to stretch the remaining amount out over 30 years, at approximately 715.00 a month, meaning I will pay an additional 252,000. I agree that interest should be paid; however repaying the original loan almost 4 times over is excessive and usurious. While my case isn’t as bad as others, it still requires a sizeable amount each month, and to add insult to injury, I can’t even claim the measly 2500.00 interest as a tax deduction anymore after this year.
Had this been any other conventional loan, I would have had many opportunities to take advantage of much more favorable interest rates, and options for quicker payback. However, my only option was to convert to a private loan at a lower rate, and due to my debt to income ratio, due solely to my Student Loan Debt, requires a co-signer, and at 41 I am not asking for a cosigner.
I want to repay my debt, it’s the honorable thing to do, however, with salaries being cut, and part –time work being hard to find, it’s difficult to maintain savings, and make t payments. I am not asking for a handout. I am asking for options that would be extended to any other consumer, on any other loan. I don’t feel that I should have to acquire additional expense or risks to take advantages of ‘savings’, the interest on the loan, and the inability to do close to nothing on it, other than take it, is ridiculous. Had I not wanted to repay this loan, would I have paid close to 2/3’s of it already? I know many people disagree with Hansen Clarke’s 10/10 plan; however I think it the best option, as opposed to some other I have heard, so offering full Bankruptcy, and others Full Forgiveness. This is the best option as it gives us a chance to repay, and to fix the broken system. I know my future would be better off, given my current situation as would so many others, allowing us to start businesses, hire and expand, purchase homes, and add to our retirement savings, in an effort to avoid another crisis in 30 years, when many of us start to retire with little to no savings.
Education should be affordable and accessible to everyone without shackling them for the remainder of their lives. We are not ‘dead beats’, we are not ‘skipping out on responsibility’, we only want the same assistance extended to us that was extended to banks that made bad investments, and companies that designed poor products. We stood behind Washington when they helped, now it would be nice for Washington to stand behind us.
It was John F. Kennedy who said, “there are costs and risks to a program of action, but they are far less than the long range risks and costs of comfortable inaction” I would want this bill’s not passing to be America’s response of comfortable inaction, because the costs of inaction, would far outweigh the action of passing this bill. Please Congressman Turner, endorse this bill, and help to place America back in the global prominence it once enjoyed as a place of opportunity, growth, innovation, invention, success, and the highest standards of living.
Remember it was risk that allowed two Dayton, Ohio Brothers to develop a plane and break free from the shackles of the earth, and that risk, also allowed an Ohioan to rocket into space and circle the earth, and it was also that risk that allowed another Ohioan to step foot on the moon an see the earth from a perspective it hadn’t been seen from prior. None of these successes were a result of no cost and comfortable inaction, however, had the action not been taken would have been a risk, I wouldn’t have wanted to take.
So in summation, please help support Congressman Hansen Clarke’s bill, HR4170.
Charlie Kent, Cincinnati born, and adopted Daytonian.