Student Loan Forgiveness

Student Loan Forgiveness

Student Loan Forgiveness Sucks.

Yeah. I said it.


I’ve been asked a few times since I started why I didn’t choose to have my loans forgiven, ESPECIALLY because I am a teacher. I usually come up with an artistically crafted response that politely dismisses the thought of having Obama ride down from the clouds on a golden chariot with a $40,000 forgiveness check for my past self. The straight-up, brutally honest answer is that I didn’t want a handout from the government, and more importantly…I didn’t need one. 

There is a ton of misconception among Millennials (or people of any age for that matter) regarding the “Obama Student Loan Forgiveness” program. The fact that it has a politician’s name attached to it on a regular basis should probably tip you off that there is some political rhetoric behind the 2009 re-birth of the original Direct Loan program. To me it looks like Obama made some tweaks to an existing program in an attempt to tell voters that he was forgiving young people’s loan debt and helping the country in a massive way. At least…that is the way that my super-skeptical mind works. And no, this is not going to turn into a political post. I also won’t allow angry political commenters below because this is America and I can do what I want with my website (I think). 

The Obama Student Loan Forgiveness program isn’t an easy way out of student loan debt. It’s incredibly hard to qualify, the repayment program is extremely strict, and it takes anywhere from 10-20 years to see any part of your principle balance forgiven.

The problem with young people hoping to take advantage of student loan forgiveness is that it adds to the stigma that Millennials are entitled. You don’t deserve to have your loans forgiven. You borrowed the money as an adult. Nobody forced you to go to college, and nobody forced you to take the money. On top of all of that, if you decided to get an $400,000 art degree with an emphasis in underwater basket weaving…you probably should have thought that through a little more when your future job will only pay $25,000 a year.

It’s just math people.


Before I go on, I understand that the loan forgiveness program could help a small percentage of people that fall on hard times or legitimately can’t afford to make minimum loan payments. If you feel like you have to use it, I think it should be a temporary tool until you can find a way to aggressively pay down your loans ON YOUR OWN. After I paid off my debt on a teacher’s salary, I realized that you can do some pretty incredible things on a lower salary if you are willing to sacrifice a little bit for your future.

Again, student loan forgiveness isn’t all that it’s cracked up to be. You could spend the same amount of energy finding ways to make extra money or streamline your finances as you could trying to figure out how to get your debt forgiven in your 40’s.

Here are some things about Direct Loan Forgiveness that you may not be aware of:

1) There are 5 different repayment plans associated with the student loan forgiveness program, and ALL of them have strict income and repayment requirements.

2) You have to pay your loans back for 20-25 years to have part or all of your loans forgiven (Sounds like 25 years of being trapped by debt to me).

3) 2 of the 5 repayment plans don’t forgive your principle balance at all, but forgive a portion of your interest payments.

4) You can have your debt forgiven after 120 monthly payments (10 years) if you are a government employee or work for a qualified 501(k) non-profit (10 years of having your soul crushed by the government WHILE being trapped in debt).

5) Some of the programs only forgive a portion of the interest that you pay on your loans every month.

6) If you make a late payment – you’re out homie.

7) A loan consolidation while you are participating in the student loan forgiveness program could reset your required payment countdown. For example, if I was on the 120 payment track, and I refinanced after 100 payments, I would have to make 120 more payments to qualify for the loan forgiveness. Ouch.

This program is oozing with fine print and red tape. You are MUCH better off to guarantee a return on your money with an investment in yourself and pay off your student loans. Every time. Every. Freaking. Time.


The teacher version of the student loan forgiveness program sucks too. Check it out:

1) The teacher student loan forgiveness program is completely separate from the Obama student loan forgiveness program. One of the requirements is that you work at a Title-1 (low socio-economic) school. My school isn’t, so I wouldn’t qualify unless I changed schools.

2) You have to work for 5 years before you can receive either $5,000 or $17,500 in student loan forgiveness (5 years of being trapped in debt).

3) If you want full forgiveness, you have to work full time as a teacher for 10 years. (10 years of being trapped in debt). I’d rather work 2 years and make it happen on my own terms, but what do I know…I’m just a teacher.

I could go on and on, but at the end of the day, I really felt that it was my responsibility to pay back the loans that I borrowed. I operate under the mantra that I don’t deserve anything in this world, and I will earn my keep. Paying back my student loans was a part of the learning process for me. I learned how to manage money, cut my expenses, and appreciate what I DO have while I paid back my student loans.

I took the 1.5 year plan instead of the 20 year plan for loan forgiveness, and I wouldn’t ever go back and do it any other way. Ever. 

Do you think that having your loans forgiven is the answer to the student loan debt crisis? Let me know in the comment section below.

 Live differently, your bank accounts will thank me later.

Don’t forget to like my Facebook page or follow @GenYMoneyman on Twitter!


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6 comments… add one
  • Peter D Apr 11, 2015, 12:12 pm

    Love this post and I am loving your blog posts!!

  • MoneyBaconGuy May 21, 2015, 8:20 pm

    Mrs. MBG worked in low-income schools for 5 years. Gvmt promised a $5k grant. It took her nine months chasing signatures, facing documents and talking to morons. I begged her to just pay off her loans. It worked out in the end. I also agree with everything Millennial Mney Man put on this page.

    • Millennial Money Man May 25, 2015, 11:58 am

      It’s almost a scam MBG. It’s basically just a smoke-screen to get people to work in low paying government jobs for an extended amount of time. The government recognizes that those jobs often suck, but are necessary for the country to run correctly. Glad it worked out though, thanks for reading!!

  • Paige Bombardier Aug 13, 2015, 11:38 am

    Bobby! I JUST got ambushed by someone INSISITING that since I will be coming out of school with $120k in debt that I should work at a non-profit and do this 10 year plan. He said “I deserve to take a break” and “I shouldn’t have to bust my ass” for the next 2 years. Made me think of you and how I DEFINITELY will be paying off my loans and busting my butt to get rid of them. Keep up the awesome work!!

    • Millennial Money Man Aug 13, 2015, 11:51 am

      Hahaha wow! I’m not worried about you at all, you’ll be debt free before you know it!!

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