CHICAGO (WLS) — Nearly 2 million Illinois people are repaying student loans.
As the nation awaits a ruling from the Supreme Court on President Joe Biden's student debt relief program, our I-Team looks at how consumers can control that debt now. ABC7's I-Team spoke with a Chicago student focused on his future as he waited to see if some of his loan balance would be forgiven.
“I never thought I would have the opportunity to go to college in the first place. My parents didn't finish their first year of high school,” says Samer Hasan from Chicago.
But, that changed in just one generation. Hassan spent two years at community college Chicago, earned a full travel fellowship at Columbia University in New York and will soon earn a master's degree in public policy from the University of Chicago. Today, Hasan is tied up with more than $100,000 in student loans, despite working full time and receiving a scholarship.
“This country, they are trying hard to forgive PPP loans, they forgive big oil, they forgive big banks, but at the end of the day, don't you want to invest in the future of your country?” Hasan said.
However, others question fairness for people who have already paid off their student loans, or those who choose not to attend college at all because of cost. Ultimately, the US Supreme Court will determine whether Biden's loan pardon plan will be enforced or dropped. If it stays, low- and middle-income people could see up to $20,000 relief in federal student loans.
“This will bring down my monthly student loans from $13,000 per month to $950 per month, which is huge,” Hasan added.
The ABC7 Data Team found that there are 1.7 million student loan borrowers in Illinois. They average $38,000 in loans. Those figures total nearly $65 billion in Illinois student loan debt, making Illinois the ninth highest in the nation in terms of total loan amounts owed.
While students await the Supreme Court's decision, experts told Team-I that there are steps borrowers must take now.
“Move forward as if you had to pay off all your loans. Make a plan for it. Build your budget around those payments,” advises Amy Lins, vice president of customer success at Money Management, Inc. worst outcome and can then happily move on to a better outcome.”
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For now, you can keep that payment in a personal emergency fund. Then, it goes to the federal government loan simulator site to calculate your current payout and options.
“Use a payment calculator to find the lowest payment if that's what you need, or the shortest payment time if that's what you want to make. You know, the sooner you pay, the less interest you'll pay,” says Lins.
You can save money on your loan by qualifying for life changes, such as a lower income or having children since you last agreed to the loan.
And, if you default on a loan, the Biden administration New Start Program giving people a second chance to improve their credit by making their loans smooth.
“This gives them access back to things like eligibility for VA loans, eligibility for FHA loans, stopping payroll deductions and tax returns,” says Lins.
Since Hasan currently works for a non-profit organization, he may also qualify for other loan forgiveness programs in the future, but he is still hopeful that his $20,000 debt will be forgiven.
“This can be a life-changing decision. It's the difference between saving for a home, saving for the future in this country, or simply surviving,” he said.
There are more federal and state programs you can qualify for for help with your loan, if you are a teacher, attorney, or government employee.
Current student loan forgiveness programs:
- Teachers can qualify for either Illinois or federal Teacher Loan Forgiveness Program if they taught for five consecutive years at a low-income school or educational services institution.
- By working for the government, military, or non-profit organization, you can qualify for Public Service Loan Forgiveness Program. It takes 10 years of work to qualify but the years do not have to be consecutive.
- Another form of assistance is on the horizon, a proposal to change the federal student loan plan known as income-driven payment plans. The changes will allow those who borrow for their undergraduate education to pay only 5% of their income on their loan instead of 10%. A video on how to register can be found Here and fact sheets can be found Here.