student loan debt

I hit rock bottom after racking up $125,000 in student loan debt

JOSIAH Poletta hit rock bottom after racking up $125,000 worth of student loan debt, leaving him with no money to buy food.

The 29-year-old history teacher graduated in December 2014 and five months later, he was asked to repay student loans of $1,200 a month.

 

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Teacher Josiah Polette, 29, said he hit rock bottom after getting into serious student loan debt
The loans were ruining the lives of Josiah and his wife Courtney, 25

 

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The loans were ruining the lives of Josiah and his wife Courtney, 25

As this was impossible for him and his wife Courtney, 25, Josiah changed his loan term from 15 to 30 years.

While this meant his monthly repayments dropped to $700, he’s since spent $19,000 on interest alone and just $21,000 towards the principal.

Featuring in a new documentary called Borrowed Future: How Student Loans Are Killing the American Dream, Josiah is one of many graduates who struggle with student debt.

Last year, 16million borrowers had defaulted, deferred or paused their repayments, according to the College Board.

With a combined household income of up to $60,000 and Josiah’s take-home pay of $1,800 each month, the Ohio couple had to live on pasta and watered down sauce to make their repayments.

And even so, it was a real struggle and Josiah felt he “had nothing”.

Sharing his story with The Sun, Josiah started donating plasma every Tuesday and Thursday in order to make enough to pay the bills.

He told The Sun: “Depending on if there were promotions, I earned between $70 and $120 every time I donated plasma.

“It took about two hours to do, and then I had a 30-minute drive there and a 30-minute drive back.”

Yet the money he earned made a “big difference” in his life, he added.

‘The loans were ruining our life’

Josiah said he took out student loans of $110,000, a majority by private lenders, when he started college as he thought there were no other options.

Within four years, the total had ballooned to $125,000 due to interest.

He said: “It was something I wasn’t prepared for, it was an avalanche coming down on me.”

“We didn’t have enough money to buy groceries. That’s with every credit card maxed out.

Josiah donates plasma every Tuesday and Thursday after football practice

 

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Josiah donates plasma every Tuesday and Thursday after football practice

“We were backed against the wall, pinned against it. We’d officially hit rock bottom. It was ruining our lives.”

“At one point, I was driving a car that had no heat in it.”

Since then, their situation has improved as Josiah and Courtney decided to get the debt within control.

When they had reduced the debt to around $90,000, the Ramsey Family Foundation paid it off for them and October is the first month without any repayments.

In May last year, they also welcomed their first child, a boy named Mathias, and are expecting another son in December.

How to avoid getting into serious student loan debt

Josiah’s first tip to future college students is to see loans as “the last resort”.

He told The Sun: “Every other option should be exhausted, like preparing or saving for college.”

It’s also worth taking the time to apply for scholarships, grants and other aid from FAFSA and to look into community colleges.

Lastly, he urged students to “never, ever” take out a private loan.

Josiah’s story comes as President Joe Biden this week revealed a revamp of the Public Service Loan Forgiveness Program (PSLF).

Around $2.8billion is set to be relaxed for 550,000 Americans, but this is only 1.2% of the 45million borrowers out there.

George Kamel, personal finance expert and host of The Fine Print and EntreLeadership podcasts on the Ramsey Network, told The Sun: “While this news is encouraging, it’s not exactly worthy of champagne popping.”

He added: We’ve got to fix the root problem instead of treating the symptom.

“We have to stop lending trillions of dollars to high schoolers who have no concept or understanding of what this loan and amount of money means for their adult life.”

He said graduates who are struggling can be “standing on solid ground in no time” with a plan and hard work.

We explain Dave Ramsey’s seven easy steps to paying off debt and getting finances on track.

Plus, here’s everything you need to know about student loan repayment.

The Borrowed Future documentary by Ramsey Solutions will be available from October 14 on Apple TV, Amazon Prime Video and Google Play.

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