I saw a post saying that two people left school 23 years ago with a combined debt of 70k. They paid 500 USD monthly for 23 years and still owe 60k.
I’m thoroughly confused. obligatory not from America.
In: Mathematics
Interest. Many loan repayment plans put most of your payment toward the interest charged, especially in the beginning when the principal is highest, so the actual loan balance decreases very little.
Add in income-contingent repayment plans and forbearance periods, and the interest charged could keep the balance quite high despite regular payment.
On the plus side, at 23 years, they’re quickly approaching the point at which federal loans would be discharged automatically. If those were private loans, however, they could be on the hook for the rest of their lives.
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