Page 58 - FOP JUNE Newsletter

A student loan debt solution
Currently there is $1.2 trillion in outstand- ing student loan debt. If one of your children holds part of that total, you are feeling the pain. The reality is that some graduates face a near impossible task of beginning their career, starting a family and purchasing a home while paying off their current long-term debt.
Students in the most recent college grad- uating class will carry an average $33,000 in student loan debt. The average payment on this debt is
debt they cannot repay. It was an irresponsible and un- accountable arrangement between the government and educational institutions funding billion-dollar endow- ments while over expanding facilities. If students cannot afford the tuition and are denied loans they cannot afford to repay, enrollment will drop and, as a result, tuition will drop. It is simple supply and demand. With the emer- gence of online education competition and increasingly reluctant borrowers, that drop is happening now.
TOM TUOHY
$333 per month. Add credit card debt payments, an auto loan, insurance payments, rent, utilities and basic monthly living expenses, and it is hard for
a college graduate to make ends meet, much less be able to invest in real estate and start a family.
And that is just the average debt holder.
However, for the majority of those with current student loan debt they’re struggling to repay, the consequenc- es of this debt bubble bursting would be more dev- astating economically than the real estate crisis. According to the Department of Education, 43 percent of borrowers who currently hold federal student loans are either behind in their payments
or simply not making them at all.
This isn’t a problem that is going away. Unfortunate-
ly many people are ignoring its consequences. A recent Citizens Bank survey found that 45 percent of respon- dents do not know what percentage of their salary went to paying off their student debt, 37 percent were unaware of their interest rate and 15 percent don’t even know how much they owe. 45 percent do not know the difference between federal and private loans.
So what can you do now if you already face many years of student loan debt? You can reduce your monthly obli- gation and your long-term debt by refinancing your stu- dent loan or parents’ plus loan today.
The good news is you can do just that with your FOP benefits plan new provider, CommonBond, offering rates as low as 2.14 percent, with an average savings over the life of your loan of $14,581.
Even better, your benefit comes with these protections: no application fees, no origination fees and no prepay- ment penalties. And if there is a job loss, payment obli- gations will be paused. Additionally, the company is built on a culture of service, which can be sorely lacking in government-funded loan options.
Incidentally, if this is your student loan, make certain you check with the Department of Education to check for your eligibility, as a police officer, for the Public Service Student Loan Forgiveness program.
If student loan debt affects your family members, im- mediate or extended, they are covered under your ben- efits plan. Visit or call today to save on current student loan debt.
Registration for FOP members and family is free. Visit www.fopbenefitsplan.com or call 1-866-729-5454 for as- sistance with registering. d
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Benefits Plan. He has been a police lawyer for 34 years. His father was a CPD detective and his grandfather was CPD Chief of Major Crimes. Tom can be reached at 312-559-8400.
FOP
Benefits Plan
Slide up the scale, double or triple the undergrad- uate debt, add graduate school debt, and the student loan payment approaches $1,000 a month.
Much can be said about how we got here and why this crisis differs little with the real estate crisis of 10 years ago. Mirroring average mortgage loan applicants 10 years ago, who were given a loan they could not afford, for property that was overvalued, students today have been given loans for inflated tuition based on easy access to
58 CHICAGO LODGE 7 ■ JUNE 2016