- Jeff O’Kelley, 57, has a student debt of $ 104,118 from loans he took out for his son’s college.
- He said he didn’t regret taking them out because he wanted to give his son the best possible future.
- O’Kelley isn’t sure he himself deserves the forgiveness of his student loan, but he says debt is a “hindrance to the economy.”
Jeff O’Kelley wants to be clear: he was not defrauded by the student loan system.
Looking back, however, he wishes it had been a little more difficult for him to take out such a large loan to pay for his son’s college, given his income at the time and soaring rates. interest since.
When O’Kelley’s son graduated from high school with honors and an International Baccalaureate in 2019, he had high hopes for college. At the time, the 57-year-old was self-employed as an entertainment photographer with an income of around $ 40,000, his finances were unrelated to those of his second wife and he didn’t want her son misses all the opportunities because of the money.
So he turned to Parent PLUS Loans to pay for his son’s education at George Washington University, and told Insider the process was “extraordinarily simple.”
“I go online, put in some info and hit submit, and 60 seconds later there’s an extra $ 30,000,” O’Kelley said. “I had very little information and very little confirmation and I think that’s the part that attracted me the most. It was too easy, and it shouldn’t have been.”
Now he has $ 104,118.60 in student debt with 360 monthly payments to be made – each payment being around $ 760 – which means he will be 88 when he’s finished paying off his debt, “it” ie if I live that long, ”O’Kelley said.
Parent PLUS loans, the type O’Kelley repays, are federal loans that allow parents to pay for their children’s education. The company that manages the loan does not take into account the parent’s income when granting the loan, but bases it on the student’s cost of attendance minus any financial assistance the child has already received. PLUS loans are the most expensive type of loan with the highest interest rate – 6.28% – compared to 3.73% for undergraduate loans, which allows parents to get into debt much faster .
O’Kelley said it would have made sense for Nelnet, the company that manages his loans, to turn him down given he had no verifiable income, but it didn’t occur to him at back then because his main goal was giving his son the best possible future.
Nelnet did not immediately respond to Insider’s request for comment.
“It was my obligation to do my best for him,” said O’Kelley. “It gave my son what he really wanted, and I felt like it was my obligation to do it as a parent.”
“It’s a horrible, horrible black hole to fall into”
There’s a Ferrari dealership a mile from O’Kelley’s Florida house, and he said if he walked into the dealership and asked to buy a car, they would never sell it to him on the spot – they would have. needed confirmation that he could afford it.
But with his PLUS loan, he said, he essentially got a Ferrari without verification.
“I got carried away and probably a lot of other people did the same,” O’Kelley said. “It’s a horrible, horrible black hole to fall into.”
O’Kelley isn’t the only parent to have fallen into the PLUS loan “black hole” without realizing how quickly debt would pile up. Insider previously spoke to two borrowers, one with $ 550,000 in debt for her five children and the other with $ 265,000 in debt for her two children, who said they wished the system hadn’t been so easy to contract.
“I wish there were more constraints, or something that could have made me think twice or make a different decision,” said O’Kelley. “I wish things would change because you don’t want to see other people in the same situation.”
The Texas Public Policy Foundation released a report last month showing that for every 100 student loan borrowers, there are 22 parent borrowers, and for every $ 100 in student loans, there are about $ 30 in parent loans.
O’Kelley’s wife earns a living wage, and combined with his, he’s not too worried about making monthly payments once the pandemic break is over in February. But his wife plans to retire in just a few years, and that’s when the monthly payments of $ 760 will become “a problem.”
Yet even with the financial burden it entails, O’Kelley isn’t sure if he deserves a student loan forgiveness, as it was his choice to take out the loans. But he said the huge debt that so many people hold is an “obstacle to the economy” and that increased surveillance would lessen its negative impact.
He said the loan cancellation is a “moral issue” for him because he knows he chose to spend money on his son’s education, “but somewhere in the back of my mind j ‘hope I hope Congress will do something. “
Do you have a story to share on student debt? Contact Ayelet Sheffey at [email protected]