Nov 8, 2024
In 2011, Shirin Tajani went back to school to get a nursing degree. Her education paid off, enabling her to get a job that paid six figures. Unfortunately, that's not the end of the story.
Despite her high income, the 46-year-old has been unable to make a dent in her debt.
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With $315,000 owed on credit cards and student loans, Tajani says she can't afford to buy a house and is working a second job. While she hoped the Saving on a Valuable Education (SAVE) Plan would provide some relief in paying off her federal student debt, the courts have stopped that plan from going into effect, leaving Tajani feeling hopeless.
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"I just feel like this country has failed us, having to come here, not even being born here, going to school, and then you get tied down to these loans," she told Business Insider in an article published Aug. 25.
Here's her story, along with some details on what happened with the SAVE Plan and some options for those facing similar struggles.
Multiple debts make payoff difficult
Tajani is from Pakistan, relocating to the U.S. with her parents at age 10. After earning a business degree and working in the corporate world, she decided to go to nursing school to explore new career opportunities. She used a mix of federal student loans and private loans to cover the cost of her schooling, and on top of that she has an undisclosed amount of credit card debt.
Now, despite earning a six-figure income from working, taking on a second job and attempting to reduce her living costs, she feels like she just can't make progress.
"I'm trying to get on a budget, trying to cut back on expenses, and it's been hard. It's been really hard," she said. "I have to have my second job to pay my loans because, without that, I wouldn't be able to make payments."
Tajani enjoyed some temporary relief when the Biden administration introduced a new student loan repayment plan, the SAVE Plan, that cut her monthly payments from $600 to around $250, according to Business Insider. However, the courts have blocked that plan, and the loans of those enrolled are in forbearance as the legal battle plays out.
The nurse says she still hopes for some type of government help but is frustrated about the stalled payment program.
"I just feel like seeing all these lawsuits blocking these programs for us is just not fair. And it's sad just to see a lot of us suffer believing that our country would help us out, and they're not doing anything for that," she said.
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Status of the SAVE Plan
The SAVE Plan is an income-driven student loan repayment plan. It was meant to be a replacement for the Revised Pay As You Earn Plan.
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SAVE changed the formula used to calculate payments by basing them on a smaller portion of your adjusted gross income. It introduced an interest subsidy so your balance didn't grow if your payments were too small to cover it. It also made forgiveness available after as few as 10 years of repayments for borrowers with low balances.
It was, however, put on hold by the U.S. Court of Appeals for the 8th Circuit following a pair of Republican-led lawsuits. At issue is whether the Biden administration had the authority to cancel student loans as part of the plan without approval from Congress.
The Supreme Court has declined to reinstate the blocked plan, kicking the can back down to the lower courts. This means enrolled borrowers are now left waiting for a final decision.
What should borrowers do?
With the SAVE Plan stalled for the foreseeable future, borrowers may want to explore other programs that are already in place. There are multiple income-driven repayment plans that cap payments at between 10% and 20% of income and that allow debt forgiveness within 20 to 25 years.
There are also career-specific relief programs. In the case of nurses like Tajani, for example, the Nurse Corps Loan Repayment Program could repay as much as 85% of unpaid education debt if she works for a health care facility with a critical shortage of nurses or works as a nurse faculty member in an eligible school.
The important thing is to be proactive, stay on top of legal developments and look into all opportunities for financial relief. A large student loan balance is a substantial burden, and it may not pay off to wait for further assistance from the federal government to escape it in the end. It might be incumbent on borrowers to make their own plans to become debt-free.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
