Should I Default on My Student Loan?
Posted Under: All Categories, Educational Efforts, Finances, Letters/Stories, Political
I’ve received letters from students asking this question, so I would like to make a definitive statement about this:
That is such a wicked bad idea at this point in time.
At least wait until you have all the facts, and complete the “assigned reading:”
The Student Loan Scam: The Most Oppressive Debt in U.S. History and How We Can Fight Back
by Alan Collinge of StudentLoanJustice.org. He documents why your credit card lender won’t negotiate with you for your current loan: It is more profitable to them if you DO default.
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act also held a special surprise for students: student loans NOT guaranteed by the federal government cannot be discharged in bankruptcy. This became law on October 17, 2005.
Amendments to the Higher Education Act eliminated all statutes of limitations for the collection of student loan debt, so if you have old unpaid student loans from the 70’s and 80’s? Surprise! It’s again a collectible debt!
Student loans are exempted from coverage under the Truth in Lending Act (TILA). They were also specifically exempted from state usury laws…lending money at an unreasonably high interest rate. Can you spell “l.o.a.n S.h.a.r.k?” Most student loan guarantors do not have to adhere to a 1988 Federal Trade Commission legislation requiring an adherence to Fair Debt Collection and Practices in pursuing defaulted borrowers.
And if you don’t like the lender you chose when you were in college, because they were on the Preferred Lender list, or you found another lender who will offer cheaper terms? Tough. Legislation was passed that requires borrowers to consolidate their loans with the original lender only (if there was only one original lender). Even the tiny loophole that once existed in federal law whereby a borrower could transfer his/her loans through the Direct Lending program, and into the FFELP program with a different lender, has been closed in 2005 by (you guessed it!) Sallie Mae and other large banks.
In addition to having no consumer protection, “collection rates” of up to 25% can be applied on top of the debt. If you were unable to afford what you owed already, you will certainly not be able to afford a 25% “surcharge,” in addition to principle, interest, fees and penalties.
In 1976, there was a provision in the student loan law that set a 5-year time period, after which the loans could be discharged, and also a provision that permitted bankruptcy if the debtor could prove undue hardship, but that was removed. Even the mob can’t do half of what the banks can now do to collect your defaulted student loans without a court order. They can grab your wages, garnish your social security and disability payments, seizure tax refunds, and even suspend of state-issued professional licenses and termination your public employment. Hoping to practice as a psychologist/nurse/teacher/hairdresser etc? You can’t if you don’t have a license. Were you hoping to have your loan forgiven by working as a teacher in a “needy” neighborhood? Defaulters don’t qualify for loan forgiveness programs.
One million private student loans are estimated to be in default, with an equal number of private loans perilously close to defaulting. There are over 5 million publicly insured defaulted loans on record with the U.S. Department of Education. These borrowers are embarrassed, humiliated and intimidated when their loans spiral out of control, or when they are trapped in predatory lending situations, so they are less likely to be proactive on their own behalf. However, that’s exactly what needs to happen.
Here’s one of over 2000 case histories you can read at StudentLoanJustice.org:
There is David, a chiropractor in Texas, who originally borrowed $70,000 for college. After a period of unemployment in the mid 90s, David’s loans defaulted, and to date have escalated to about $400,000. The state of Texas has suspended his license to practice medicine, and he has been unable to negotiate a reasonable settlement of the debt. In David’s words, “It doesn’t make sense. It’s almost like the government doesn’t want me to practice medicine-never mind that it’s the only way I can reasonably even have a shot at paying this mountain of money back!” David is currently driving trucks in Amarillo to make ends meet.
So do you recommend students simply stay out of debt and save the cash ahead of time for college?
One writer put it this way:
“I certainly advise avoiding loans at all costs. It is frankly safer to put college costs on a credit card…At least there are bankruptcy protections (if something horrible happens) and the ability to refinance the debt under more competitive terms if the lender is treating them badly.) There is also a statutes of limitations, truth in lending requirements, and coverage under state usury laws in the use of credit cards, all of which are null and void for federally guaranteed student loans thanks to Congress.”
Don’t default on student loans, and if you are seriously considering it, at least read Collinge’s book and join StudentLoanJustice.org if you do.
I was completely blown away by learning about the student loan situation, which is why I put up a reminder about the Jokes, Humor, Ridiculous page on prior to this entry. I needed a laugh, so I though all of you student borrowers might, too.
Reader Comments
Sounds like you would be better off taking a cash advance on your credit cards to pay off the student loan and get out of the racket that is Sallie Mae. I’m so glad those days are over for my husband and I, these latest articles are the most terrifying I’ve seen lately.
Yes, and there is all this “confusion” and “misinformation” that lenders offer. We had experience with that, ourselves. “Oh sure, just put the loan with us, and we’ll let you finance it at x % over 12 months.” “Will that put me in default with my school?” “Oh, no, you’ll be on a payment plan…” School says “No, you can’t register, you are in default.” We paid it off using a credit card, but golly, what about the poor kids that actually believed the BS and didn’t HAVE any credit? We were savvy borrowers, and just had a hard time believing someone would OUTRIGHT LIE. They do. There is no law that prevents it.
I went to the website for studentloanjustice and posted my story. I felt empowered in doing so, actually.
I try to take a really long view of this–as in that this situation is the best 10,000 years of totalitarian agricultural-based thinking is getting us. Our best thinking got us into debt slavery and unhappy virtual enthrallment.
I’m not one of those people who thinks we’d be better off returning to hunter-gatherer tribes, though I do think that the model of the tribe as a going concern does have its uses in these trying times. Some people got through Katrina in Nawlins by “proverting” to that halcyon state. I think it’s an element of our future that we need to pay attention to, and we need to get past our ideological differences to see the value in others’ experiences, and “the work of ye other gods and goddesses” in this process.
The key words in this post were “at this point in time.” I’m a little behind on my student loan payments–$260 or so, and I’m like “screw ‘em.” They call me, I don’t answer the phone. I don’t return their calls. I give them the same khntsideration they give me. I’ll get current, but that’s partly because I have a feeling they are not long for this world, and I just need to hang in there for the time being. Things are spiraling so out-of-control, and I for one don’t believe that these CEOs and their henchpeople have anything resembling a coherent plan other than “lock ‘em all up.” That’s the most illegitimate and evilly stupid plan there is.
Is it good that I’m getting angry/enraged about this? Something’s gotta give, after all. I need to help this tower of babel tip over!
Richard
One thing that hasn’t been discussed is not default, but what I like to call ‘perpetual deferrment’. Most of the kids I went to undergraduate school with still haven’t started paying back their loans -mostly because they are working for $6 an hour at Starbucks. So, the lender gladly ‘defers’ payment on these loans, meanwhile adding thousands of interest to the prinicple.
I’ve heard my generation referred to as the Starbucks Generation. It’s true, but not because we drink there. We can’t afford the coffee.
Thanks for that, Rebecca. It is in the school of “the bills they don’t ask me to pay can’t hurt me.” And you are right, what a surprise if they ever get a “real” job!
I am defaulting as of now. There is no way I can pay off the amount of student loan debt that I’m in and it affects my entire life. I can’t negotiate with Sallie Mae to stop the mounting late fees and interest that will be piled on for years to come, this is madness. I will be forever in debt and feel that I will never be able to live a productive life or save for a home or retirement. The worst part is my Mother is the co-signer. Does Sallie Mae have the power to take all of her retirement money or to take her house? I’ve heard all they can do is garnish wages, but cannot tap into savings and retirement plans. Is this true?
I am in default as well. I took out $30,000 to pay for my nursing degree. I got sick and was unable to finish my last term of the program.
I defaulted. It has been three years. I now owe $106,000 total.
I’m unable to get a professional license until the balance is paid. I will never become a nurse now. All 4 years of hard work, studying, getting good grades, for absolutely nothing.
College is a huge scam. I think about suicide every day I’m awake.
Ryan,
I take people talking about suicide very very seriously. I want you to realize one thing:
The worst time to commit suicide is when you are suicidal. That sounds like a joke, but follow me here:
You say you got a nursing degree and excelled in it. You got sick. You are now in default.
You have many decisions to make about those facts, and this is probably not the state you want to be in when you are making them. You need a therapist and a med consult. You are a medical person, so you know this. Get the help you need to straighten out your head, then straighten out your finances. After that, you probably need a legal consultation.
Recently, a student of mine in a psychology oriented program told me she was a physician. She isn’t practicing as a physician because her education isn’t recognized in this country.
Years ago, a doctoral level psychologist friend of mine found out that because he was missing ONE 3 CREDIT COURSE, he was unable to get licensed in the state he wanted to settle in. Could he go back to take that course? No, he must repeat the entire doctoral program as the course must be taken WHILE he was matriculated.
I don’t tell you these stories to take away your own suffering. I tell them because each of these people have faced intense disappointment in their education, and went on to find a solution around it.
I pray that you will have the stamina and courage to figure a way around it, as well.
Renee, I totally feel your pain. I too have had thoughts about ending my life. I’m unemployed right now and I’ve tried desperately to speak with the lenders regarding my financial situation, but there not hearing it. What makes matters even worse is that the interest is growing like a viscous cancer. I don’t think I’ll ever be able to pay this loan off with the interest being the way it is. Now I’m faced with the possibilities of not being able to get a job due to the default status of the loan. I feel I have nothing left. I’m so desperate at this point. I have nothing.
I had a student loan back in the 80’s. I was hit by a drunk driver and had three surgeries in a year, having to exit school. The semester had just started and they were supposed to return a portion of the loan to the financial institution. I found out years later, when a collection agency contacted me. The original loan was 423.00 and my employment was garnished and I have paid back over 4 times that amount. I am now on unemployment, and suffered an heart attack. They are now coming after me for 2300.00 more. Is there any cap on what is legally collectible?
I thought I was the only one who is considering suicide as a way out of student loan hell. Luckily for me, I have kidney disease and can possibly speed up renal failure. Then, my family could use my life insurance policy to pay the student loan Nazis off. I have come to the harsh reality that I will never get married, have children, plan for retirement, own a house and more. My life is finished. No difference if I’m shackled to a prison cell or to student loans.
I’m not even bothering with licensure because I’m sure that our governing bodies will see to it that everyone ends up defaulting.
I’m sick of people commenting when they write, “Well you shouldn’t have taken money out that you knew you couldn’t pay back”. Up until 6 months ago, I could have gotten a $50,000 a year job. I would have been fine. Well, that amount of pay doesn’t exist anymore. When students took out these loans, we could find or had jobs to pay them back. And, our economy is not getting any better.
Hardened criminals aren’t even put through this kind of psychological torment and abuse. Would the U.S. government at least give us a swift death by firing squad?
There is little to no coverage played by the media regarding student loan hell. So, the only thing that we could do is spread the word and hope that 18 year old kids don’t set themselves up for a life of hell on earth.
No, no no. Suicide is a bad idea. Really, it is.
What you are required to pay is a social contract, that has been broken repeatedly by major corporations and banks. The government, freely and without too much hardship (to them, its our money they are getting), hands pieces of papers, just like the ones you owe, to these corporations, and that is IT! FREE!
Your life is worth much more than those pieces of paper. If you marry, your wife or husband has her income and you can share her/his life with them. About 40% of this economy is “under ground” in the US, and nobody collects taxes or anything else from that cash source. This is merely a fact, not a recommendation. My recommendation is to accept the things you cannot change, change the things you can, and keep things in the right order:
PEOPLE. THINGS. MONEY.
You have been caught in a whirlwind of change, my friend. Just like everyone else in the path, the Tsunami came in, and you got wet. You aren’t the only one.
It’s horrible. It’s an outrage (that’s why I wrote the piece). But it is not ’suicide’ serious. Believe me. It isn’t. Falling in love, and getting married is serious. Having a child is ‘heart attack” serious. But your student loans are one of those payment it doesn’t sound like YOU can pay, so you don’t. You aren’t alone. You are a tiny drop in an ocean of sadness. I’m sorry for your sadness and the losses you have already suffered. But stay alive.
We need you (and your outrage.)
I went to college in my 30s as a single parent. I did well but it was hard raising a child by myself and I was sick a lot. I graduated and received my RN license. I lived in a rural area so couldn’t find a job right away but was immediately hounded by the student loan departments. We lived in a drafty trailer with rain and snow coming in through the windows and holes in the floor but they wanted me to pay them first. I did find a job but as a new nurse didn’t make enough. I was sick a lot but they kept hounding me. I used up all my deferments and forebearances; it was easier than dealing with “them.” I suffered a stroke and lost my job but “they” still came after me. I found out I had Multiple Sclerosis but “they” still hounded me. I had an accident and was paralzyed but “they” still hounded me. “They” would call my neighbors and leave messages for them to give me.I lost my house and was homeless and told “them” I had no address but they still hounded me through my relatives. They hounded relatives I was not close to. They lied saying I had used them as a co-signer to try to track me down. I am the big fat loser. I am no longer welcome to family gatherings. I am no longer welcome. I owe money. I am a loser. I drift from one menial job, work for several months, don’t work for several months, and then try to get something else. I work minimum wage jobs because I feel like a loser. It is hard to look people in the eye. It is hard to pretend to be anything other than what I am; a big fat loser. I have no health insurance and I am sick a lot. I used to live in my car but I lost that. I now sponge off people for as long as they let me. I have nothing. I will never have nothing. I have tried, periodically, to call different places to see what I can do to try to get out of default. But, I am treated like the loser I am. I, too, think about suicide. I am hopeful I will get sick and not recover. No more student loan debt sucking the life out of me.
Anon,
That is one of the saddest stories I have read in a long time. I can’t tell you how badly I feel about the waste of human effort this student loan program has put you through.
But I want to reiterate that there is no such thing as debtor’s prisons (so far) in the USA. I agree, that student loans are a parasitic weed on our collective community gardens. But they should not kill the plant, girl. You are a survivor, I can tell that. You are tough and angry, so you keep that attitude, you hear? There is no point taking on an attitude “I’m a big fat loser.” That’s a waste of your time and energy. No, you successfully completed an RN program. Do you know how hard that is for most people? I couldn’t do it. I couldn’t. But you did. And, what you walked away with, that medical knowledge and know-how, that the can’t take away from you.
If you can’t shake that attitude yourself, I want you to get on the telephone and call around to the private “head shrinkers” in your area and offer them a chance to work with you, gratis. That’s right-at no charge. PRN. You’ll get a lot of no’s, but you tell your story, and you’ll eventually get a “yes,” and they’ll probably be glad they’ll have a chance to work with you.
I’d say it’s time for a new chapter in your life story. It’s due, don’t you think?
Serioiusly, I know that it is very hard, but if you can pay off your student loans using credit card checks, then you can declare bankrupcies. This plan may take a few years, but its worth it. Get a few credit cards and get the cash advance checks. Start using these to pay down the student loans. Keep paying minumums on credit cards so you are in good standing. Once your loan is payed off and the debt has been transfered to the Credit cards, then declare bankrupcy.
Another plan: if you are luck enough to have a house, try to get an equity loan to pay off the student loan. Once the loand is payed off, then you can declare bankrupcy or let the house go into foreclosure. You will lose the house, but hey, time for a new start anyway.
Okay, I am days from defaulting. I am a victim of Sallie Mae deferments and such. I started off with $19000. in 1990. I got a job which paid $9. bucks an hour, single parent, no child support from hubby etc. Every cent I made went to bills and food for myself and my daughter. I would write these letters pleading to either reduce the interest or work with me on payments, never got an answer other than a form letter to forebear or defer the loan. Present day that $19000. is now around $80000. I do have a home that I have lived in for 16 years and I just can’t see throwing it away on giving those evil people at Sallie Mae my money. I feel violated by them. So what does happen after a person defaults???
Ok, it seems that everybody in here is talking about how bad it is and that they can’t do nothing. We need answers, stop crying, if I ever decide to kill myself or take the person who gave me the loan in the first place, or just rob a bank, all this people that feel bad but do nothing to help don’t feel bad, give answers, solutions anything that can get someone out. Let’s talk about answers sad stories do no good.
So, I just graduated from a crappy law school that I thought would empower me to finally grow up and settle down somewhere. I’m 160k in debt and have no job. I imagine that that number will quickly reach the cool million mark if I allow it to go into default and were ever to attempt to pay it off. So I ask you, what is the solution? I’m currently waiting tables all days of the week and sending out resumes and going on interviews with my time off, but to no avail. I know of others who are treating “finding a job like a job” meaning they have all day everyday to search, and they too are still unemployed. Even if I find legal work, it’ll be the 30-40k range and will be at least 50-60 hrs. a week. Are there any mathemagicians out there that can help? I don’t think even moving back home could get me outta this mess. I know I’m not the only one in this mess either. What’s going to happen to all of us?
Seek higher education and employment in other countries. America is a “has been” country. I got caught in the same mess. I’m an engineer and graduated 5th in my class. College lending is a scam. If a debtor cannot default why the high rates? Isn’t default the risk? Well, I was never able to repay after default. I spent years on the phone. I live in another, better country and use exclusively U.S. flag toilet paper. And today I laugh at the broke America. THE UNITED STATES HAS NO FUTURE BECUASE IT HAS NO VISION.
I too am finding myself days away from default. In total, I am about $50,000 in debt to student loans from three sources: Sallie Mae, and 2 different federal sources. My federal loans are in good standing, on is half way paid off right now. However, in the three years since I graduated, I have only been able to make 12 payments on my Sallie Mae loans. I haven’t been able to make any for the last almost 6 months. I am an assistant manager making $8.05 an hour…of that $.65 is an attendance bonus. I have been late due to traffic accidents twice, thus dropping my wage the $7.40 an hour for the whole week. I barely have money to put food in my mouth. And as gas prices creep up, the less food I have to eat. I have lost 10 lbs in the last month because all I have to eat is cereal, PB&J and ramen. No fruits, no veggies, hardly any meat. I went to school for journalism (something I am very good at) only to graduate in an environment of closing newspapers…leaving me jobless. I bounce from job to job trying to find better wages. I work full time as it is and make less than $1,000 a month. I donate plasma to put gas in my car and food in my mouth. I’m looking for a second job so that MAYBE I can make some payments. I’m actually going to talk to an airforce recruiter, maybe I can be an officer with my degree. As my credit goes down, payments like my car insurance go up. Like everyone else, I feel like I’m never going to accomplish anything in life. I have found love but why would someone marry me when my credit will just drag them down. I would like to go back to school for a degree in biotechnology -genomics- The talk right now is that’s a career of the future and something I am very interested in…but I can’t pay the loans I have now, how could I justify getting more into debt just so I can pay back the debt I already have? I probably couldn’t even get any loans. I feel hopeless, worthless, and simply don’t see the point anymore. How can companies do this to us? I borrowed the money and I will pay it, but times are tough…why can’t anyone see that?
I got caught in all this, went to college as an adult with little knowledge of the loan industry, took private loans and now make less money than I ever have in my life. I do not even make enough for the loan payments if I gave them every last dollar. Needless to say I do not make enough to survive on my own. It is troubling that the thought of suicide can cross your mind in this case but the fact is that it does, I am not suicidal so don’t worry i will leave the country before that option. What I can say though is that some action needs to happen to save this current generation from this disaster as ruining the lives of these people will and does have a negative impact on society as a whole, increased crime and all. Desperate people will do desperate things, the words “let them eat cake.” keeps rinning in my ears.
I got caught in all this, went to college as an adult with little knowledge of the loan industry, took private loans and now make less money than I ever have in my life. I do not even make enough for the loan payments if I gave them every last dollar. Needless to say I do not make enough to survive on my own. If I start getting my pay garnished i will no longer be able to get to work as I now can hardly justify the transportation cost. It is troubling that the thought of suicide can cross your mind in this case but the fact is that it does, I am not suicidal so don’t worry i will leave the country before that option. What I can say though is that some action needs to happen to save this current generation from this disaster as ruining the lives of these people will and does have a negative impact on society as a whole, increased crime and all. Desperate people will do desperate things, the words “Let them eat cake.” keeps ringing in my ears. It seems we are in a class war where money is the new royalty.
I can’t believe how sad our country really is….. I have worked in the health care field for many years. I never could finish my degree in psych because I went to a small private college that was very expensive. I was given loan after loan and finally after 3 years I was told I was maxed out. I couldnt finish my degree and I was 50k in debt………for many years I just worked in group homes for the mentally handicapped and took out forbances and kept my student loans at bay. A few years ago I was given the chance to go and work on some humanitarian projects in Penn. I took out a economic hardship deferement that I was told would last for 3 years. Apparentlly only if I keep filling out the paper work each year…. because I went into default with out knowing. So I was told I had to pay 650$ amonth for 10 months or I would owe 100k after penaltys and such so I moved back into my folks at age 39 wooo hoooo! and started paying. After 5 months of payments I lost my job and they said I have to start all over!!!!!! So I decided to take all my credits and go back to school for my LPN so I could pay these ass holes off……..but NOPE I CANT EVEN GET MY LISCENCE!!!! IF IM IN DEFAULT…………….I figured if i got my lpn i could afford to get out of default then get my RN. Apparentlly I’m completely screwed…….No idea what to do now…….off my self or just leave the country and volunteer at a ashram or something……… I hate this country whats wrong with it…………way to much…….alll I do is help people, I dont care about money…. but apparently its all anyone cares about here. Whats a guy to do????????????
bECOME A TEACHER AND TEACH AT A POVERTY SCHOOL.
LOAN IS PAID OFF.
JOIN THE PEACE CORP.
LOAN IS PAID OFF.
GOOD LUCK.
YOUR FELLOW STUDENT WITH $15,000 OF SALLIE MAE LOANS
STARTING LOAN WAS $4,000.
20 YEARS LATER…ITS $15k.
IT WILL NEVER GO AWAY.
see if your lender has an income contingency plan. I know the federal lenders do. If you report no income (which would me file no “tax returns”) you can defer up to 30 years. Best of luck to all. I know it sucks!
MADD (Mothers Against Drunk Drivers) and people who put a stop to telemarketers calling had to start somewhere. If creditors are hassling you, hassle the regulators who can hassle them right back.
Get with the attorney general in your state; s/he could add student loan sharks to the To Do list. Ted Kennedy stated we have to decide who we are for: students or bankers.
Get your hassles in front of your US Senators, if they’re Democrats. Democrats have control of both houses in Congress. Hassle them into introducing corrective legislation. Make them dread seeing you coming. Write Letters to the Editor of every Democrat who is up for re-election in your state and in the state of the university you attended. Shine the light on student loan corruption.
Get yourself scheduled as a speaker for as many groups as possible. Parents of high school students need to hear you and need to see your letters to your Attorney General, and your Democrat leaders. Get yourself in front of high school student forums, in front of sororities, fraternities, YMCA, and embarrass the heck out of your legislators and the student loan morons. Names, contact names, and include stock market names.
Finally, get all of this in front of Republicans in your state or your university’s state who started the problem, but only AFTER you’ve got a mile-high stack of paper and track record to embarrass them and make them realize they are “late out of the starting gate.” Your hassles should translate into their hassles.
I graduated from college in 1997 with about $24,000 in student debt. As of right now, my loan has long since passed into default and has been referred to a collection agency. The debt itself has more than quadrupled to just over $100,000! Although I had low-wage jobs and plenty of financial setbacks in my first years out of college, I really can’t blame this situation on anyone but myself. The truth is I was simply irresponsible for many years. I never made payments, and never talked with my loan servicer to try and make alternate arrangements. During a period of unemployment in 2001-2002, I stopped even sending back the request-for-deferment forms they would send me. That was when my student debt got really out of control.
The good news is that I finally hit bottom (I don’t just mean financially) and have been working to turn my life around for the past several years. I have paid off almost all of my old debts, but have yet to face up to my student loan responsibility. My mountain of debt is so huge I’m literally frightened to begin. At this point, I live and work overseas. I almost feel like I’m living in exile. I’m afraid to come back and live in the United States permanently, for fear of having my wages attached, being harassed constantly, and all the other things already mentioned. I know I have to face it someday, but I don’t know how or where to begin.
I wrote the secretary of education a letter. It prolly won’t be seen, but at least I can say I tried something. I am pasting it below:
January 14, 2010
Dear Secretary Duncan,
I know that you are aware of the problem with private student loans, but
are you aware of the extent the lenders are actually going to force people
into default? When people are unemployed and lenders attempt to force
people out of their homes because they are wanting people to default, it
is going too far. They refuse to make any type of reasonable payment
arrangements with the previous students. I was browsing the net today
trying to determine if I should default on my loans or not because I was
unable to finish my degree program and I am unemployed and not able to
work all due to health issues for which there is no cure. I found this
website, where beleaguered people are penniless trying to pay back loans
that are triple any reasonable income per month.
http://www.peakoilblues.com/blog/?p=329 (regardless of blog name, this
post is about student loans.) Please look into this.
Big lenders don’t have any incentive to work with the people to pay back
their debt. Not every American is a “lazy good for nothing shouldn’t have
gone to college if ya weren’t gonna pay it back” type of person. We took
out the loans because we wanted an EDUCATION!!! This is not irresponsible
spending, this is EDUCATION!!! These loans were meant to help us improve
our lives as professionals, not ruin them leaving many suicidal and
homeless.
Many ex-students were defrauded into getting private loans. I attempted to
complete college twice as an older adult, both times forced to quit due to
health issues. On my second attempt, I was told I was not eligible for any
type of federal loans. Having never heard of private loans before, I
asked questions and I was told by the financial aid department at Brooks
Institute of Photography that I would have all the same repayment options
w/ private loans as I had with federal loans. That is not the case. I
have had none of the familiar repayment options.
Medical deferment or discharge is impossible to get. All I could do was
play the forbearance game until I ran out of them. I now have
insurmountable debt, I am unemployable due to the type of medical
condition I have, yet I don’t qualify for medical discharge. But my story
is nothing in comparison to some of the people posting on the fore
mentioned site. People who have graduated with medical degrees have been
stripped of their licenses to practice due to inability to repay their
loans. Why? Because lenders WANT people to default…it’s a win-win
situation for them. When you have people struggling so hard to pay
something back or else lose everything they went to college for only to
see them stripped of their jobs as a result of credit problems, that is a
sign that the education loan system is seriously flawed.
Please, look into this. And please, help us.
oh and it doesn’t help Americans when Sallie Mae outsources it’s telephone operators to India. Call Sallie Mae to talk about your loan…chances are you’ll be talking to India. What? Sallie Mae can’t even hire people trying to pay off their loans?
Of all the writings and painful tales I have come across while writing this blog, none are as painful to me as the comments you read here. These letters are the desperate cries of our future leaders, healers, scientists, and artists. They went into their learning with bright hopes and great aspiration. They’ve come here after searching the internet for the answer to one of their most important life questions: Should I default on my student loans?
They are grieved. They are embittered. Many feel emotionally crushed and overwhelmed. Others have left the country–the USA– where they planned to make a living and contribute as useful citizens, believing they can never return and assume a normal life. Some are questioning whether leaving or living an underground life, is their only option.
It is a horrendous shame and travesty. It is a willful destruction of our nation and of our future. The best I can offer them, as a psychologist, is the promise that there are no debtor’s prisons, and to hang and and have courage.
Restitution has to be made to these people. It isn’t enough to change things from here on out. We need to call an “amnesty” for so many of these folks, and start anew. Let’s hope there is political will. There was certainly political cooperation to craft this horrendous system.