At 34, Janell Tryon has a student debt of $250,000.
She made just $150,000, including $100,000 for an undergraduate degree at New York University and $50,000 for a master’s in public health.
The rest is all interest.
“For years I couldn’t bring myself to look at the numbers and felt completely out of control,” she told Insider. “The only way to live with it was to pay a certain amount every month and not default. I never felt like I could get over it.”
In the 13 years since she graduated from NYU, Tryon has made repayments on her loans, while feeling unequipped to handle the burden of debt. After graduating, she earned $23,000 a year as the manager of a coffee shop and bookstore and paid $700 a month on her loans, the same amount as her rent. After grad school, she spent about six years doing research for the New York City Health Department, speaking to residents about their experiences with addiction and homelessness. Now she is a full-time doctoral student at the University of Massachusetts Amherst.
All the while, his monthly payments were generally allocated to interest, not the principal amount of the loan. It’s a vicious circle, as the loan keeps earning more interest, which has to be paid back that month.
Tryon’s story is similar to that of many Americans, 45 million of whom have student loan debt that accounts for one in eight, according to a NerdWallet analysis of May 2021 census data. People between the ages of 25 and 34 are the more likely to have student loan debt, and millennials owe an average of $40,000, according to data from a 2021 Experian study.
Since March 2020, borrowers who owe the federal government have not been required to make student loan payments and have not been charged new interest, but pressure is mounting for President Joe Biden to cancel all or part of it. of this debt. Biden is reportedly preparing to write off $10,000 for those earning less than $150,000 a year, The Washington Post reported this week, though the typical borrower owes nearly triple that, according to research by Experian.
“A lot of these students come from families like mine, who didn’t know how to deal with student debt because it’s its own beast,” Tryon told Insider.
“It’s a really insidious process”
Like many Americans, Tryon owes a mix of private and federal debt.
Its federal loans were managed by Navient before Aidvantage took over their portfolio. Tryon’s private debt is serviced by banks and other lending groups, and all of its loans have an interest rate range between 4.5% and 11.5%.
In January, Navient, formerly known as Sallie Mae, settled a lawsuit that alleged the company pushed student borrowers into more debt instead of helping them build affordable repayment plans. Navient denied any allegations of wrongdoing in the deal, but agreed to forgive $1.7 billion in student loan debt for 66,000 borrowers out of the $73 billion in student loans it serves.
Tryon’s debt was not eligible. To qualify, borrowers must have had seven consecutive months of past due payments or attended for-profit schools.
Tryon called the settlement a “major distraction,” for everyone still struggling with their debt.
She thought that by going to college, she would eventually earn enough money to pay off the debt she had incurred.
She said she spent years trying to negotiate a payment plan with Navient and eventually forbore, meaning she suspended payments on her original loan while not paying. than interest. With this setup, a borrower usually ends up paying more in the long run.
“It was never about ‘how much can we charge this reasonable person for what they earn?'” she said. “It was, ‘How much can we lower the rate so she can make an interest-based payment, not a principle-based payment?'”
That was one of Navient’s lawsuit claims in a statement Pennsylvania Attorney General Josh Shapiro said the company “engaged in deceptive and abusive practices, targeted students it knew were ‘they would struggle to repay their loans and placed an unfair burden on people trying to improve their lives through education.’
Student loan expert Mark Kantrowitz, founder of privatestudentloans.guru, a free website on borrowing to pay for college, told Insider he believed the most serious allegation in the lawsuit was that Navient had distributed loans that would trap borrowers in a cycle of debt. to earn interest.
Sallie Mae handed out “opportunity cost loans” before they were inherited by Navient, loans that “were made in the knowledge that the majority of borrowers would be unable to repay the debt”, he said. declared.
Navient has previously denied all claims and told Insider they offer several different options for borrowers looking to repay their loans.
“The company’s decision to resolve these issues, which were based on unsubstantiated claims, allows us to avoid the additional burden, expense, time and distraction that prevails in court,” said Mark Heleen, chief legal officer of Navient. “Navient is and has always been to help student borrowers understand and select payment options that suit their needs. In fact, we have increased enrollment in income-contingent repayment plans and reduces delinquency rates, and every year hundreds of thousands of borrowers we support successfully repay their student loans.”
Since graduating from college, Tryon says her debt has kept her from planning for her future. Since joining Debt Collective, a syndicate of debtors, she said she has met others like her who feel misled by lenders and schools.
“It took me years to realize how manipulated I was by lenders,” she said. “It’s a really insidious process.”
Tryon added that while a college degree often represents financial mobility for people who grew up in low-income households, the resulting debt cripples people for years.
“The system might want us to aspire to be in a different tax bracket,” she said, “but if we’re in debt, we’re so much worse off than our parents.”