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Years later, still paying student debt
ROTTERDAM -- Earlier this week we showed you the challenges facing students as they prepare to graduate college. Many of them are hit with steep student loan debt and some financial planners say it can cause an economic crisis. One man is on the hook for thousands in student loans years after he graduated.
You graduate college and you're lucky enough to get a job, your first priority may be paying off your loans. The experts say you have to try and do it as soon as you can. But, imagine having so much debt you may still be paying for college when you retire.
"I started two years ago on an income-based repayment plan, and if I continue with that it'll be 23 more years," said Jason Beck, 38, a teacher at Schalmont High School.
Beck already paid $27,000 in student loans. When he talks to kids at Schalmont, he thinks they understand how much student loans can cost them. "I use mine specifically," Beck said.
The loan is lofty, and it looms over Beck's degree from Cortland and graduate studies at Sage. Beck signed on to an income-based repayment plan and he says it's the worst one you could have.
"Every day they take what you owe, your principal balance, and multiply it by your interest rate, and on a daily basis that interest accrues," Beck said.
Student loans are like lifetime homework -- it's your assignment to pay it off, no excuses, not even bankruptcy. So where do you get extra help? Experts say if you own a home, look there.
"Families may not have that much equity in their house but those rates are historically low right now and the family can deduct the interest that they pay on that on next year's tax returns," said. Dr. Dean Skarlis, College Advisor of New York.
Beck tells students at school not to take a loan like his. Planners suggest federal loans if you can get them. There's no accruing interest on subsidized loans while a student is in school, and after, "the rates are a lot lower," Skarlis said. "Right now they're 3.4 percent which is a pretty good rate and the interest does not accrue while a student's in college."
Those loans go to students who receive financial aid -- with them the unsubsidized loans are capped at $5,500 for your freshman year. Options beck hopes kids consider before they find themselves with more expenses than just school.
"I want to pay off my debt but at this point I'd like to have a fighting chance," Beck said.
Beck wrote to Senators Gillibrand and Schumer asking for some kind of legislation to be considered in Washington. He has two kids now and upped his monthly payment to $600 a month -- in an effort to try and get it all paid up as fast as he can.
Also: Do high school grads consider the cost of college?