Roughly one in five federal student loan borrowers who earn above the national median income are still behind on repayment or have never enrolled in an income-based plan, according to data tracked by the Federal Student Aid office. That number surprised me until I met Carlos Mendez.
I was covering a Medicare Part D open enrollment event at the ImaginOn library branch in Charlotte, North Carolina, last October — not exactly the crowd for a 28-year-old real estate agent. Carlos had wandered in, scanned the room, and spotted me taking notes near the exit. He asked if I was a reporter. When I said yes and mentioned I covered government benefits programs, he said, without much hesitation, “Then I need to talk to you.”
We stepped out to a pair of chairs near the children’s section, surrounded by foam letter blocks and low shelving. What followed was a two-hour conversation about debt, divorce, and the specific brand of financial panic that can grip someone who looks, on paper, like they’re doing just fine.
A Graduate Degree and a Mountain of Payments
Carlos Mendez graduated in May 2022 with an MBA from the University of North Carolina at Charlotte. The degree cost him — between tuition, fees, and living expenses — approximately $94,000 in federal student loan debt, split across six different loan types. He’d taken on the bulk of it during his second year, when he decided to go full-time instead of staying part-time while working.
“I told myself it was an investment,” Carlos told me, leaning forward with his elbows on his knees. “And it was, technically. But I did the math wrong on the back end.”
By late 2022 he had his real estate license and was building a client base in the fast-moving Charlotte market. His gross income in 2023 landed at roughly $88,000. In 2024 it climbed to $107,000. From the outside, this looks like a success story. From the inside, Carlos was watching money move through his accounts without sticking.
His divorce was finalized in March 2023. Carlos pays $1,340 a month in child support for his two children, ages four and six, plus an additional $910 a month in court-ordered childcare cost-sharing. That’s $2,250 a month leaving his account before he pays his own rent, car note, or grocery bill. He does not resent his kids — he was clear about that, emphatic even — but he described the combined weight as “a number I can’t think about too hard or I stop functioning.”
The Seven Months He Stopped Opening Emails
When federal student loan payments resumed in October 2023 after the pandemic-era pause ended, Carlos was automatically placed on the standard 10-year repayment plan by his servicer, MOHELA. His monthly bill came to $987.
He paid it twice. Then he stopped opening the emails.
By April 2024, he was officially in delinquency. His servicer had sent twelve emails, two paper notices, and placed two calls to a phone number he no longer monitored. He wasn’t being irresponsible by any simple definition — he was managing a divorce, a sales pipeline, and two young children while carrying a fixed monthly obligation that would stress most household budgets. But the avoidance made things worse.
When I spoke with Carlos about this period, he described it with a kind of clinical distance that felt like a coping mechanism. “I’d have a great week, close something, feel good, and then open my banking app and watch it disappear,” he said. “So I just stopped looking at certain things.”
What the Income-Driven Plans Actually Offered Him
When Carlos finally called MOHELA in May 2024, the representative walked him through income-driven repayment options. The SAVE plan — Saving on a Valuable Education — had been introduced as a replacement for REPAYE and was, at that point, still operational. Based on his adjusted gross income and family size, his estimated SAVE payment came to approximately $520 a month, nearly half his standard plan obligation.
There was a complication, though. Carlos’s income as a commission-based agent fluctuates significantly month to month. A strong quarter can show AGI that inflates his calculated payment, while slow months leave him cash-poor despite a strong annual number. He told me the servicer’s recertification process felt designed for salaried workers, not someone whose W-2 looks nothing like his bank statements.
Carlos enrolled in the SAVE plan in June 2024. His first reduced payment posted that July. But the legal challenges surrounding the SAVE plan — which had been blocked by federal courts in mid-2024 following lawsuits from multiple state attorneys general — meant that within months, his account was placed in an administrative forbearance. He stopped receiving bills. His payments were paused. And the uncertainty started all over again.
The Turning Point: Getting Someone on the Phone Who Actually Knew the Rules
Carlos told me that the moment things shifted wasn’t a program or a policy change — it was a single phone call in September 2024, when he reached a MOHELA representative who walked him through his full account history, explained the forbearance status clearly, and told him exactly what his options would be once the legal situation resolved.
He also connected with a nonprofit credit counselor through the National Foundation for Credit Counseling, which helped him map out his total monthly obligations. Seeing the full picture — child support, childcare, loans, rent, variable income — on one page was, by his account, both terrifying and clarifying.
Where Things Stand Now — and What Carlos Regrets
When I followed up with Carlos in February 2026, his student loans were still in administrative forbearance pending court resolution of the SAVE plan litigation. He had not missed a payment since re-engaging with his servicer, and his credit score — which had dropped 41 points during his delinquency period — had recovered to within 18 points of his pre-divorce high.
He had also, in his words, “stopped pretending the debt wasn’t there.” He now reviews his loan account monthly and keeps a separate savings line item specifically for loan-related expenses so the payments don’t compete directly with child support obligations in his mind.
The regret, though, is real. Carlos told me he wishes he had called his servicer the first month he felt overwhelmed, rather than waiting until delinquency forced his hand. He estimates the seven months of avoidance cost him roughly $6,900 in missed payments that capitalized as interest, plus the credit score damage that briefly raised his car insurance rate.
His kids are now five and seven. He coaches his older daughter’s Saturday soccer team. He closed 22 transactions in 2025. He still swings between confidence and dread with a rhythm that, as he described it, “comes with the job and probably always will.” But the pile on his desk is smaller. The emails get opened.
Sitting across from Carlos in that library in October 2024, surrounded by foam alphabet blocks, what struck me wasn’t the debt number or the child support figure or even the months of avoidance. It was how ordinary the whole situation was — a young professional with a graduate degree, a real career, and obligations that simply outpaced the assumptions he’d made about what the degree would deliver. He is not an outlier. According to the Federal Student Aid office, more than 7.5 million borrowers were in default or delinquency as of early 2025. Most of them, I’d wager, look perfectly fine from the outside.
Related: She Owed $47,000 in Student Loans and Faced a 30% Rent Hike. Then a Tax Clinic Changed Her Math.
Leave a Reply