I’ve been covering finance for nearly a decade, and I’ve written about some wild stuff, but there’s no issue I’ve covered that causes more stress in people’s lives than student loans. Some one in six American adults has a student loan. A quarter of them are having trouble paying it back, and it’s no wonder. It’s a horribly and needlessly complicated system. It’s not easy to make sense of your finances. I’m Shahien Nasiripour, and I want to meet people with an obsession to beat the system and never leave money on the table. Consider this. The Feds offer borrowers about six weeks to get their loans forgiven. One of the most prominent ways, taking a public service job after college has a 99% rejection rate. Licensed clinical social worker, Michael Mitchell, is part of the one percent. He’s one of the first to make it through the Federal Public Service Loan Forgiveness program, which started in 2007. I visited his office in Manhattan to find out how. By the time I got through this whole process and got the forgiveness, it was actually $170,000 at that point. Wow. I just remember seeing my net worth one day going from here to here. Did you call anyone? Did you tell anyone? I spoke with my best friend. We popped a bottle of champagne. Did you really? Yeah. In 2007, Congress created Public Service Loan Forgiveness. The pitch for borrowers was you spend 10 years as a nurse, police officer … Basically, work for a government agency or a non-profit, and after 12 on time payments a year for a decade, whatever’s left of your debt is wiped away. It’s a huge benefit available to about a quarter of all Americans with a job. I downloaded the law and I read it. I had been a proofreader before, so I’m just somebody who’s very detailed oriented. At this point, it was probably $130,000, $140,000 that I owed because it just kept growing, even though I was already paying loan payments at that point. Your balance was shooting up? My balance was continuing to creep up. Right. when filing these forms that they did work in eligible employment, and then maybe four years through the process- It didn’t count. Yeah. It didn’t count. They backtracked on that. It sounds simple when you just toss it off of like, “Oh yeah, you work 10 years in not for profit, and your loans are forgiven.” But, there’s a lot of nuance to it. How often did you call your loan servicer to talk about this? By the end, I was calling them probably every other day. Wow. But, public service isn’t the only way to get your student debt forgiven. You can die, for example. Sorry. It’s a bit grim, but it is true. Or, if you’re totally disabled or so destitute that you’ll never be able to afford your payments, the Feds will forgive your loans then, too. The other big way is to enroll in plans that tie your monthly payments to your income, like Michael did while he was in the public service plan. Here’s Bloomberg reporter, Janet Lorin, on how borrowers can pay less on their loans. Caution, there’s a warning coming. There are programs called Income-Based Repayment, and students could qualify based on what they’re making. You also have to be mindful that the interest is going to be accruing. There’s this scary term called negative amortization, and that means even though you may not be making a payment, or you’re making a small payment, the total balance of your loan is continuing to grow. Thanks, Janet. Let’s look at the scary math Janet just laid out. Imagine you make 45 grand a year, and you owe 50 grand at six percent interest. Now, you could try to pay it off over 10 years by making monthly payments of about $550.00, or you could opt into the income based plan, and pay as little as $220.00 a month, but consider this. Under the first option, your total payments, including interest, would come out to about 66 grand. Under the second, because of all that interest and because you’d be paying over about twice the amount of time, you pay more than 92 grand. Student loans can have really steep interest rates, and if you can afford it, you’d be better off paying a bit more than required because it’d be a smart way to avoid paying unnecessary interest. Remember, generally whatever interest you don’t pay just gets added to your total balance. A lot of people are paying interest on interest. It’s stressful, but meeting stress head on can feel good. Give it the old college try.