Meet a 30-year-old woman with $110,000 in student debt who chose her job in hopes of public service loan forgiveness — but her balance continues to grow.

• Kjerstin Laine, 30, owes more than $110,000 in student debt from undergraduate and graduate programs.

• Laine’s career in the nonprofit sector, in theory, offers a path to forgiveness.

• But the interest means it just paid off, and Biden’s pardon is just a drop in the bucket.

Like millions of student loan borrowers, Kjerstin Laine is in debt limbo.

For Laine, a 30-year-old who has more than $110,000 in student debt, the $20,000 in forgiveness she is ready to take from President Joe Biden’s plan is just a drop in the bucket. As a first-generation college student whose debt shaped the trajectory of her career, she fears her balance will slip even further later. payment breaks in the pandemic era it ends and the interest begins again.

“I never miss a payment, always on time, and my balances never go down either,” Laine told Insider. “I don’t understand how people can’t see that there’s something wrong with that picture.”

Despite working through college and taking cost-cutting measures, Laine finished her degree in 2014 with a total of $98,000 in debt from her undergraduate and graduate studies. In the following eight years, accrued interest brought his balance to today’s amount, despite his consistent repayment.

Laine chose her job in communications for an education-advocacy non-profit because it was a good fit for her skills – and because she could apply for public service loan forgiveness, which forgives student debt for workers in the government and non-profit after 10 years of qualifying payments. .

But this program is historically fraught with flaws, and recently she paused this strategy to take a job at a marketing agency with a salary that brings her much closer to the $90,000 that the federal government estimated she needed to make a year to allows you to pay back. debt He also paid the medical debt.

“I also had to leave the non-profit sector to go near it, obviously,” he said. “So it’s like that Catch-22.”

The story continues

Laine is one of several million of American borrowers stuck in an unsustainable situation. She is grateful for the relief she will get – even if it is the legality of Biden’s pardon is still under scrutiny – but she is not sure she will be able to afford monthly payments when they restart in January.

Its situation points to the larger structural problems that supports the student debt crisis, where first-generation and lower-income students take on huge debt loads to get ahead and increase their earnings, but still find themselves buried under ever-increasing balances. Many, like Laine, have shaped their lives around the hope of assistance — now that it’s here in some form, it may not be enough.

“The hardest thing is that I trusted this system that I was told from a very young age that this was my path to prosperity or a decent – not something exorbitant – but a decent middle-class life where I could give back to the community that helped raise me and supported me through educational programs, meal programs, things like that,” Laine said. “And it feels like a big broken promise right now.”

Interest on student loans may go up, meaning balances won’t go down — and could go up

As a college student in California, Laine worked at various jobs in places like restaurants and grocery stores. He took classes at his local community college and at his university in the summer and winter to try to reduce his expenses. He graduated in 2012, a semester early to cut costs, racking up nearly $18,000 in total debt for his journalism degree.

She went to a “dream school” for a journalism degree, still working part-time and leaving with an additional $80,000 in debt in 2014. At the end of her time at the school, she was hospitalized for dehydration after she said she ran. tattered

Despite consistent payments, the years after graduation saw Laine’s debt grow. This is the problem of interest capitalization, which is when the accumulated interest is based on the principal balance of the loan and can lead to the burden of the debt being much greater than it was initially loan

The Biden administration has steps taken to prevent the capitalization of interests. In July, he published a proposal to end the practice in any case that is not required under the Higher Education Act, such as grace periods, but those changes will not be implemented until next year. And borrowers are still struggling to stay on top of their payments.

For borrowers like Laine, in a few years, the interest could cancel out any relief Biden received.

“I paid $300 until the pandemic. I paid $300 a month, I think, for three to four years, and my balances never went down,” he said. “They were always climbing.”

Public servants like Laine can have their debts forgiven – but many can’t even get in touch with their loan servicer.

While Laine is a big supporter of public service loan forgiveness, he said it “has been plagued by its own problems.”

The company that manages the entire portfolio of public service forgiveness – MOHELA – does not make things easier. After a number of loan companies ended their federal contracts last year, all borrowers enrolled in PSLF were transferred to MOHELAand the process was not perfect.

Insider he spoke first with two borrowers who wanted simple questions about their PSLF payments answered, but ended up spending hours on the phone and never even being connected to a representative who could answer their questions.

“I’m really worried about MOHELA as a servicer at all,” said Laine.

While MOHELA has never commented on the hourly wait times, Scott Buchanan, the executive director of the Student Loan Servicing Alliance — a group that represents federal loan servicers — previously told Insider that the Department of Education decided how many resources he gave loan companies, which influences how many customer support staff they can hire.

But with the PSLF waiver due date Monday, which allows the past payments, including those previously considered ineligible, to count towards the progress of the forgiveness, the borrowers are in a crunch of time to access the extended relief. The department recently introduced Permanent PSLF fix for after the expiration of the waiver, but that does not eliminate the confusion that some borrowers may experience with their payment history.

“I would love nothing more than to be able to dedicate my entire career to serving this sector,” Laine said. “All my career choices are kind of centered around this debt, and that’s a really tough, not fun place to be.”

Read the original article on Business Insider