My Private Student Loans Are Keeping Me From Homeownership

  • Reading financial jargon at 18 was overwhelming, so I just signed whatever I had to sign to start class.
  • Unlike federal student loans, private loans are not covered by student loan forgiveness plans.
  • I’m afraid I’ll never own a home because of my student loans, but I remain optimistic and focused on solutions.
  • Read more stories from Personal Finance Insider.

By the time I was 18, I was already overwhelmed by the number of decisions I had to make.

Which career path should I take? Which school will I choose? Do I go to the school that gave me the most scholarships or the one that offers programs that interest me more? How do I prepare myself mentally, emotionally, and physically to move out of my parents’ house for the first time?

With all of this on my mind, researching student loans was the last thing on my mind. All I wanted to do was build a career and a life I was passionate about as quickly as possible. My school said I was eligible for government student loans, but they weren’t enough to cover the cost of my tuition.

Luckily, my mom helped me by co-signing my student loans. However, reading financial lingo at 18 was really overwhelming and I just signed everything I had to sign to start classes.

Here’s how signing a private student loan changed my life.

I have barely made a dent in the principal of the loan 10 years later

For the longest time I was too ashamed and guilty about my circumstances to make up for it search in my Navient account. When I finally checked it out, I found that despite making regular payments, the principal balance had actually increased.

Since I was having financial difficulties, I deferred my loans for a few months. During this time, my loans have cost capitalized interest. To be honest, if my mom’s loan wasn’t at stake, I would choose not to pay my Navient bill just to build a healthy emergency savings fund.

I’m afraid I’ll never be able to save for big milestones

Because my monthly payments are so high, I fear I will never be able to buy a house or raise a family of my own. Every time I make my monthly payments, I fantasize about how I can use that money for family planning instead, especially since fertility treatments for LGBTQIA+ people are sometimes not covered by health insurance.

Not having great credit, I feel trapped in a cycle of paying off debt and watching my savings dwindle because I can’t afford to deal with emergencies. Unlike federal student loans, private loans are not covered by student loan forgiveness plans. Even if President Biden gave Americans nationwide student loan forgiveness, I would still pay for personal loans.

Realizing how predatory the student loan system really is, I decided to focus on solutions

Earlier this year I learned that 89% of full-time borrowers are not financially secure enough to make their student loan payments. When I saw that number – 89% – I realized that I wasn’t the only one struggling with my student loan debt and that giant student loan companies don’t really care about our quality of life.

When I stopped blaming myself for signing those papers without reading them, I was able to focus on solutions. In 2022 I plan to start refinancing my student loans for a shorter repayment time and lower interest rates. I will also work with a financial planner to build an emergency fund and take control of my finances.

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