Long Student Loan Repayment Period Can Still Mean Success, Says American Financial Benefits Center

EMERYVILLE, Calif., Jan. 29, 2018 /PRNewswire/ -- You might have seen the popular student loan stories where the headlines read: "This 30-Year-Old Couple Repaid $120,000 Of Student Loans In 3 Years" and "How this 28-year-old accountant paid off his $73K student loan debt in less than 4 years." Those can be inspiring stories for people who can emulate them. But for many people, it's not possible to copy those borrowers. And for some student loan borrowers, focusing solely on paying off their loans is not financially smart, either. American Financial Benefits Center (AFBC), a document preparation company that assists people in applying for and maintaining enrollment in federal repayment plans, wants to let their clients know that taking a longer time to pay off student loans or achieve loan forgiveness is nothing to be ashamed of.

"Some people may be able to pay off their loans quickly, but that's really not the case for everybody," said Sara Molina, Manager at AFBC. "Our clients find a lot of relief in staying in repayment plans that we help them enroll in, even if those make their student loan repayment longer. And there's nothing wrong with that."

Taking a longer time to pay off loans is not indicative of failure; instead, it just means the education was expensive. Consider former President Barack Obama. In 2012, the President revealed that he and then-First Lady Michelle Obama had only paid off their student loans eight years prior. Both the former President and First Lady could attribute their success in part to their education, first as undergraduates at Ivy League schools and then as Harvard Law students, which was made possible by their student loans. And while the Obamas are exceptional examples, they show that a lengthy repayment process does not mean a lack of success.

Some experts also say it makes more financial sense to not pay student loans off quickly. (This is dependent on individual borrowers' situations, so borrowers should be mindful to understand advice in the unique context of their own lives.) If a borrower is in good standing with his or her loan, taking any extra cash and putting it towards retirement or other investments can be more valuable than paying off student loans early. Alternatively, if a borrower has other kinds of higher-interest outstanding debt, like credit card debt, extra cash may be best used to pay that off first rather than getting ahead with student loan payments.

A longer repayment period may also allow federal student loan borrowers to maximize potential forgiveness amounts in income-driven repayment plans (IDRs), which end in forgiveness after a 20- or 25-year period. Plus, borrowers working in public service may receive forgiveness after only 10 years. Because payments on IDRs are calculated relative to a borrower's income and family size, they are often more affordable. AFBC assists clients in applying for and staying enrolled in IDRs and helps guide eligible clients through what some may feel are complicated Public Service Loan Forgiveness requirements. These types of repayment plans and forgiveness programs are long-term, but they provide opportunities for borrowers to stay in good standing with their loans, avoid default, and even work on other financial goals concurrently.

"Slow repayment may seem discouraging for some borrowers," said Molina. "But in reality, taking a long time to repay or get forgiveness means you're working on other important financial goals, or simply doing the best you can. At AFBC, our goal is to make student loans easier to manage, and sometimes that means longer repayment, which is worth it for so many borrowers."

About American Financial Benefits Center

American Financial Benefits Center is a document preparation company that helps clients apply for federal student loan repayment plans that fit their personal financial and student loan situation. They adhere to strict customer service guidelines and strive for the highest levels of honesty and integrity.

AFBC is a member of the Association for Student Loan Relief (AFSLR), and each representative on the phone has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Contact

To learn more about American Financial Benefits Center, please contact:

American Financial Benefits Center

1900 Powell Street #600

Emeryville, CA 94608

1-800-488-1490

Related Links

AFBC home page

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SOURCE American Financial Benefits Center