That quote in the headline? That's from a woman named Sarah Pool from Staunton, VA. Sarah graduated with $60,000 worth of student loans when got her master's degree three years ago ... and now she owes $69,000, even though she never missed a payment.
Sarah's story was just featured on the front page of the Washington Post. Like many people, Sarah sought an advanced degree with the hopes that she could make more money. Unfortuately, that dream of a higher income came with a side of student loan debt that she didn't quite anticipate.
The blessing and curse of income-driven repayment
Keeping up with student loan payments is a challenge for a lot of people. Often, income-driven payments plans for federal student loans can help make those monthly payments more manageable.
In Sarah's case, she's able to make her monthly payments thanks to income-based repayment ... but unfortunately, the low monthly payment means she's not making any progress on chipping away at her loan principal. Meanwhile, interest continues to accrue, swelling the size of her loan.
She and her young son get by, but there's no money left over. As the Washington Post article points out, Sarah is just one car repair away from disaster.
Sarah claims that her massive debt has even driven away potential boyfriends.
Is there a better way?
Sarah is holding out hope that the Public Service Loan Forgiveness (PSLF) plan stays in place long enough that she can have her debt forgiven after 10 years of payments. Right now, she has seven years to go.
However, not everyone is eligible for loan forgiveness ... plus, PSLF has been put on and taken off the Congressional chopping block several times over the past few months. The program's future is far from certain.
So what is someone like Sarah to do?
Many people with student loan debt are unaware that they may able to refinance to a lower interest rate. In fact, people who refinance can reduce their payments by over $200 a month and save close to $20,000 over the life of their loans, on average.
If your student loans are keeping you from moving, changing jobs, buying a house, or being able to comfortably pay all your bills, student loan refinancing may be a smart strategy to pursue.
It takes (literally) 10 seconds to see if you're ReFi Ready. What are you waiting for?