How Quickly $30K in Student Loans Grows to $96K.

March 14, 2022

There wasn't much pushback when we (Drew and Seth) founded Fundfly, but occasionally we've run into someone who seems...angry? distraught? about the idea of a portal to crowdsource student loan balances.

"I had to pay my student loans back, why should it be different for anyone else." 

When these conversations happen, we almost always discover two characteristics of the angry person: 

A). They went to college somewhere between the 1970's and early 1990's, when higher ed costs began to skyrocket.


B). Their parents paid for more than half of the costs.

If you graduated from college before the mid-1990's, you probably could pay off your student loans by scraping by on cheap rent & ramen noodles for the first couple of years.

Then, this happened: 

Keeping up with Modern Society: Rising Cost of Higher Education | by Noa  Maltzman | Medium
Source: Medium

"I paid my college back myself in 1988." 

You might not have been able to if you'd graduated 15 years later.

The costs dramatically increased, and many students (as young as 17 when they signed massive loans) were not properly educated on what repayment would look like.

Fundfly was founded because of stories like this one from Marketwatch

Question: I’d like to obtain advice on tackling student loan debt. I do not have private loans, and I owe approximately $96,000. I’m so confused because initially my loans were less than $30,000, but I think the rest of it comes from interest. I’m not sure what I am looking at with my loans. My loans have been in forbearance, and I want to investigate loan forgiveness options. I am a school nurse and support my family, so my income is limited. Can you provide direction? It would be greatly appreciated.

How can a student loan balance end up so high? Mark Kantrowitz, student loan expert and author of Who Graduates from College? Who Doesn’t?, says, for the student loan balance to triple requires an extended period of non-payment that usually requires at least two decades. “This is not just the interest and fees that accrued during the in-school and grace periods, but also long-term deferments, forbearances and delinquencies, as well as collection charges from defaults,” says Kantrowitz.

On the surface, it sounds like this is the fault of the borrower...but it's not difficult for a $30K loan to grow to $96K if: 

  • you're in a lower-paying career field (teacher, social worker)
  • that requires a graduate degree (which defers your loans) 
  • Face a layoff or two
  • and/or other financial hardships.

All of a sudden, that $30K loan to a $96K balance...looks like something other than laziness and sloth.

A person works hard their whole life, pays on time, and still winds up with decades of loan payments, due to predatory private loans.

Until now, there's never been an option, outside of dumb luck (i.e. you're injured at work, get a massive check and pay off your loans).

But stories like this are all too common...which is why we're working on a crowd-funded solution.

Stay tuned,

-Seth and Drew

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