Cindy came to the Financial Empowerment Center (FEC) by way of MomsWork, one of our community partners. She knew she needed help with her $100,000+ student loan debt, but she was discouraged and feeling hopeless. Unable to work due to a disability, her loan was in default and her social security benefits were being garnished.
First, her financial counselor Alicia helped her apply for pandemic-related administrative forbearance that allows a suspension of federal student loan payments. With this temporary relief, she was able to focus on improving her financial situation. Next, Alicia coached her into an Income-Based Repayment Plan to get out of default; this dropped her monthly payment to $5 but didn’t change the loan balance. After paying $5 for nine months, her loan was current, and she was able to reapply for a Total and Permanent Disability Discharge – something she’d tried in the past but had been unsuccessful. She didn’t believe anything would come of it, but Alicia encouraged her to be patient. She was rewarded in May 2022 with a discharge of her total student loan balance.
Cindy’s gratitude for Alicia and the FEC is inspiring.
As a bonus, getting her loan current also impacted Cindy’s credit score, which enabled her to buy a car at a good interest rate with no money down, replacing an old car that had become a money pit.
Cindy’s next goal is getting her credit cards paid down so she can reach her goal of achieving complete financial independence. Alicia couldn’t be prouder of what Cindy has accomplished.