Student debt story: Dear Sallie Mae, I can’t afford you. You’re too high maintenance. And your cutesy name sucks
December 3, 2011I’ve been in a panic these last few months. Making minimum payments on my student loans serviced by Sallie Mae Inc. was no longer merely a challenge – it was getting impossible. After making some awful sacrifices to refrain from defaulting (see more on that below), I’m in a corner.
I am aware of the total lack of consumer protection associated with student debt. I knew that if I was unable to make my minimum payments, they would hit me with late fees, penalties, etc. They would harass me. In ruining my credit history, they would make it impossible for me to get access to basic services. Forget about taking out another loan – I’m talking about not being able to rent an apartment. And defaulting would not only mean a ruined credit history, it would mean that my debt would double, triple, quadruple, etc…I would be a slave (serf) forever.
But I took a long, hard look at the numbers, and I realized that I am already a slave (serf is an appropriate word, see comments below).
Here is a screenshot of the current status of my Sallie Mae loans as of November 27, 2011 (click to enlarge):
Notice anything?
Original balance: $37,099.00
Current balance: $35, 908. 41
I’ve been in repayment since 2006. I had to do one deferral – as to not default. I signed up for a program to minimize my payments that, I was told, was beneficial to someone who is going through financial difficulties – yet I regularly made payments over the minimum payment.
Because Sallie Mae helpfully provides a payment history, I was able to whip out a calculator and count up the exact amount I have paid over these last few years.
That amount is $23, 449.65
I was done before I even knew it. And applying for more deferrals will send me deeper and deeper into debt. Decades and decades of payments – as I grow old. There’s no end in sight. The system counts on this. The people setting it up knew that most of us would not be able to sustain payments over time.
Of course, the lending industry has its own arguments.
But you knew you’d have to pay out more under your current payment plan!
Like many recent graduates, I had the following two options: default or allow myself to get even more screwed over wrt interest rates. I thought that I was picking the lesser of the two evils. I regularly paid more than I owed in a current month. You can see how well that has worked out.
The whole point of the student loan industry has to do with applying interest rates to loans! Otherwise, it just wouldn’t be profitable! Nobody would lend students the money to go to college!
These interest rates are not just predatory – in this economy, they are unsustainable. This system is broken. I was helping sustain it with my payments – now even that option is gone.
You really should have thought about that before going to Duke!
Seems to me that circa junior year or so, I had to have a Duke dean call Sallie Mae on my behalf – because they were refusing me a loan at the time with no justification (actually, their actions were directly tied to my parents’ financial troubles at the time – that much was obvious). It was only because I was at Duke that I had that kind of assistance, based on the stories other people across the U.S. have told me.
Like most U.S. institutions of higher learning, Duke costs too much. The astronomical cost of tuition is an exact reflection of our values – not just as members of the Duke community, but as Americans. We Americans pride ourselves on the lack of a safety for people like me. We’re rugged individualists, dammit! But entrapment of students does not help our society in the long run – it defies financial logic.
Oh, so first you were begging us for loans – now you won’t pay them back! Hypocrite!
I was desperate to stay in school. That was the “responsible” thing to do – look at how much scorn is heaped on “the drop-outs.” And I was already in debt from previous years – so I correctly reasoned that dropping out, and ending up with debt + no degree would screw me in the long run. Whups – I’m still screwed!
There are major profits to be made from peasants who decided that they too are entitled to receive degrees – most often because that is the only way to get a good job in the U.S. (something that people are eager to forget when they get on their soapboxes about “the irresponsible poor”) And people in default are, in fact, even bigger cash cows, and not just for the feds. People are not just punished for falling behind on student loans – they are trapped for life. Professional licenses are revoked, wages garnished, friends, family and employers harassed. People are made examples of, so that others fall in line. And when they do fall in line – here is where they end up. Why is it that forbearance fees are legal again? Because, the system is stacked against borrowers? Gotcha.
Aren’t you ashamed of yourself? You’re a professional journalist, a wife, a mother!
Shame is one of the great tools of what is an all-out class war. The funny thing is, by all appearances, I’m an American success story: immigrant family, great education, international career, husband I adore, fantastic baby who wears little hats with ears. But, like many people, I am being suffocated by a screwed-up system.
You know what I am actually ashamed of? Gambling with my life and the life of my kid because of student debt. Check out this article I wrote for Foreign Policy about giving birth on the state’s dime in Russia. One detail I “forgot” to mention is that my husband and I had the money to pay for a private contract at a Moscow hospital – thing is, it was a lean summer, and I was terrified of defaulting. I was so brainwashed by the system that owned me that I wouldn’t touch the money meant for Sallie Mae. My father, who’s been struggling financially as well, wired me some cash – that was set aside for loans as well. I actually went against my husband’s wishes and put myself and my child at risk, because I was trying to be “financially responsible.”
My son’s face greets me every morning. It says, “I trust you, mother.” When he grows up, I’m going to have to explain the risks I took with him while he was at his most vulnerable, because I wanted to be a good little cash cow.
This wouldn’t have been the first time I skimmed on health care. Because I could not invest in decent preventative care while having dental problems, I lost two teeth at the ripe old age of 26, to give one example. I have literally been falling apart, all of the sake of letting people make a buck off of me. Except I can’t afford to do that anymore – I have to be able to take care of my child.
But you’re not even poor!
We have a myth of the “deserving poor” in our culture – it’s similar to the myth of the “good rape victim.” But like most people living real lives, I have my financial ups and downs. I’ve all sorts of things these last few years: walking people’s dogs for grocery money, sitting in a cafe in Chelsea, drinking a glass of moderately priced champagne and asking the readers of this blog for Paypal donations.
As a writer and journalist, I supplement my income with freelance writing gigs, much like my director husband supplements his with acting gigs. All of that together makes up our family budget. When the gigs dry up, so does the money going towards my loans. We’ve been chasing more work, but as the economy continues to suffer, and the cost of living goes up while jobs evaporate, people like us end up competing for jobs that barely exist. And I would rather have what little money I have left right now into paying down my government loans (at least the interest rates there are not ridiculous) and the modest amount I had to spend on credit cards while being between jobs.
Consequences will never be the same!*
Some people kill themselves after defaulting on student loans. Driving these folks to suicide is an essential component of the system, because, once again, it keeps the rest of us in line. I know the consequences are going to be devastating – it’s part of the reason why I’m so pissed off.
What are you even trying to accomplish here?
Besides making my situation clear for the loan sharks who will come a-callin’? I want to make a public promise that I am not going to put student debt ahead of my needs and the needs of my family anymore. I also want to once again point out the obvious – something is seriously wrong here.
Fox News can spin stories such as mine however it wants to, but at the end of the day, we’ve got people saying that student debt is hurting the economy as well as individuals. Maybe they’re right. I don’t know if there is a clear explanation for why we have ended up with this system in the first place. All I can tell you is that it is crushing people beneath its weight. I live abroad now – so people can say that I am one of the lucky ones, for now. I don’t know, maybe society will continue to deteriorate and eventually we’ll have debtors’ prisons – though then again, with the way the system is rigged, we don’t need debtors’ prisons. Awesome, ain’t it?
And who thought of names like “Sallie Mae” and “Fannie Mae”? I think J.K. Rowling may have written about this person:
uh huh
We all know how she ended up.
*-Yeah, that joke is kind of old. Whatever.
This. Oh my gods, this. I got my first email from Miss Sallie a week ago. I’m doing temp work now but it’s nowhere near regular and I can’t find a full-time position even as a freaking receptionist/admin assistant, despite the close to 100 applications I’ve sent out. When I don’t have temp work, I have $0 income. Just a couple of points I want to emphasize:
I was desperate to stay in school. That was the “responsible” thing to do – look at how much scorn is heaped on “the drop-outs.” And I was already in debt from previous years – so I correctly reasoned that dropping out, and ending up with debt + no degree would screw me in the long run. Whups – I’m still screwed!
Yeah. I dropped out briefly because my mother had (and still has) some serious health issues. Went back and finished my degree, lest I be one of those “irresponsible drop-outs”. The twin to that reasoning you mentioned are the people who think college is useless because “Look at Steve Jobs and Bill Gates and…” insert fabulously wealthy innovator who never went to college. The whole, “if they could do it, so can you”. No. The reason we know who those men are is because they are exceptional, not the rule. If that was the case, there should be hordes of wealthy college drop-outs and those who never went (not counting the entertainment industry).
We’re rugged individualists, dammit! But entrapment of students does not help our society in the long run – it defies financial logic.
That it does and suggesting an alternative that won’t consign people to living a mean existence gets the dreaded “socialist” label. It does defy all kinds of logic to maintain a system of easy-to-spring financial traps that most of the population will fall into. It never helps any society, much less one that wants to be a “shining beacon of civilization and democracy” to keep so many of its own citizens screwed over by the system. Stagnation and decline are the only actual results and all the wealth the elite accumulated won’t actually protect them when the entire bag of shit hits the fan.
Okay, I’m done ranting.
Oh yeah. I owe about double what I borrowed, because I had to use my forebearances due to my ill health. It was do that and get treatment or try to make the payments, let the Lupus kill me, all while being homeless. So, ya know. I’m only able to pay anything back now because I joined the Income Based Repayment plan. They wanted almost 500 a month, but they’re getting 90. Because I currently work for the government, my loans will disappear in 10 years. (Yay public service! If my governor doesn’t cut my job.) I don’t know what program you’re in, but IBR has helped me a lot. Otherwise, I’d have defaulted.
Thing is, we’ll be moving to Australia in a year or so. I won’t be able to work for at least a year, so my income will be nothing and I’ll owe nothing. If E makes enough month that I don’t have to work, then I won’t and I’ll never owe anything…which I find really funny, because you know, I SHOULD feel bad about that, about not having to make payments, but I don’t really, because with the way the loans are set up, I’ll NEVER be paid off. NEVER. If I wasn’t in IBR and made the payments they wanted, I’d be paying back almost 150k for a borrowed 45k. I mean…that’s insane.
You know, I didnt plan on being sick. I didnt plan on getting a disabling disease. I only borrowed what I had to. I didnt go insane with it. But because Im sick, but not too sick to work, I can’t get any help. It’s almost impossible to get your loans discharged. You have to be completely disabled…and those are really really strict guidelines. You’re bed bound but can talk on the phone? Well, then you can actually get a job! No break for you! I mean…its crazy.
I stopped feeling like i HAD to pay long ago. I realized how much I’d be paying for how long and I was like….no. Just no. I’ll owe money after I’m DEAD.
And really, how will Sallie Mae find us in other countries? *sigh* That’s horrible, isn’t it? In order to have a life without the oppressive debt, we have to leave the country. That seems counter productive to me.
I would suggest that one of the basic issues is the fact that the USA is not willing to invest the money necessary to attract, train, and retain high quality elementary and secondary teachers, especially in rural and urban areas.
If our high school students were graduating with basic competence in reading and writing, they wouldn’t need to prove their literacy by having a BA.
If we invested in reasonable vocational and professional certification programs (non-four-year) at the upper-high-school and community college levels, we could end up with a better trained workforce.
But no. Teachers are paid poorly, and the field does not consistently attract the best suited to inspire learning. And now, at the college level, teaching is more and more being outsourced to TAs and Adjuncts who are paid very little and are then faced with huge educational gaps to fill.
Invest more in teachers and schools from a younger age, and this problem will begin to balance out.
Plus, of course, if students were not allowed to take out these kinds of loans, colleges might not raise tuition quite so quickly. . .
It’s particularly hilarious to recall being told that, “but student loans will help you build your credit! Without them, you’ll have a hard time!”
Ahahaha. Ahahahahahahaha.
$24K in payments and you’ve only paid down $1K? Are you quite sure about that? Your pic says you’ve only been hit with $9K in additional interest from forbearances.
I don’t doubt your financial situation is difficult…. a lot of people are facing tough times… but with numbers like those that don’t make sense, it’s hard not to take Sallie Mae’s side.
Maybe you should post your full payment history…. or at least get a cpa friend to look it over and vet it.
Those numbers that “don’t make sense”? That’s the repayment plan I’m in! It’s all part of how they screw you – and I’m neither the first nor the last.
A (sadly) awesome insight, Natalia. I feel your pain. And THANK GOD for this post. I was almost shamed into believing I was the only one.
I spent all last summer tussling with the bank (I was in-between contracts) and the pound-lust is unnerving. A choice quote was ‘I don’t care what you have to do to pay us, just do it. Or we’ll send the bailiffs.’
I know my copy of Lord of the Rings is precious, but I doubt it’d make a dent in the student debts…
That is the most f’d up payment system I’ve ever heard of. Living in Canada I acquired about 10, 000 in debt for one year at a top school which I repaid by moving back home and working a minimum wage job ($8/hour). Then I had a nervous breakdown and failed out of school, and it took me four years to complete my fourth year, one or two classes at a time.
The difference of course is that Canadian schools give you nowhere near the prestige of American schools (my current university department wouldn’t consider hiring anyone trained at a Canadian university). Looking at my professors I would say that the quality of intellect those schools attract, also reflected also in one’s colleagues and the overall education you get almost justifies their position. You could easily outdo my thinking any day of the week. My professors all had scholarships, though. That otherwise earning that prestige goes so heavily punished in the land of ‘rugged individualism’ … just, wow.
The student loan bubble is going to burst. You’re right to pay for things that you and Lyovochka actually need. Elie Mystal, a writer at Above the Law, a blog for the legal profession, has been writing about the fucked-up state of borrowing for legal education for a while. Here’s his column on his own student loan default.
http://abovethelaw.com/2011/06/student-loan-debt-whats-the-worst-that-could-happen/
Also, @guest: The numbers Natalia is quoting are, in fact, completely believable. The interest just keeps accruing and accruing, so one can indeed pay $23K and still wind up barely below the original principal.
What?! That’s insane! Canada has some fantastic schools, what the hell is that all about?
@joy: I’m sure it’s possible one could pay $23K and have $22K of that go to interest and penalties. I’m just saying that that doesn’t seem to jive with the screenshot. Like I said, that screenshot seems to suggest $9K.
That, in conjunction with statements like “I regularly paid more than the minimum payment,” would suggest to me that perhaps Natalia did not understand the details of the loan restructuring or forbearance that Sallie Mae was offering to her. Such statements suggest that she expected the extra payments to pay down the principal. That they did not points to a disconnect between her expectations and those of Sallie Mae, which were knowable up front.
I agree that Sallie Mae probably didn’t go out of its way at the time (or later) to grab her by the shoulders and say, “do you really understand how this is going to change things over the lifetime of your loan?”
I also agree that there are arguments in favor of being able to discharge student loan debt through bankruptcy. There needs to be a way to recognize when an individual will never be able to pay off a student loan.
Still, I haven’t yet read anything here that indicates that Sallie Mae did something illegal or unethical.
Thank you for sharing your difficult story. I’m so happy that you chose to protect your baby in the end. The bankers literally hate the reproduction of life!
Your intuition is correct: the system is rigged. Bond traders who speculate on these risk-free loans assume lifetime default rates at nearly 40%! This is well above the statistical manupulation of about 8% reported by the US government.
http://online.wsj.com/article/SB10001424052970204224604577030562170562088.html
Sadly, your story has become more and more common these days. This interesting account echos many of your experiences, but obviously from a different angle:
http://queerurbanecologies.wordpress.com/2011/11/29/it-is-not-my-future-at-risk-its-everybodys/
At least there are extensive conversations starting to reach a wider audience, such as these on a recent New York radio show:
http://www.wnyc.org/shows/bl/2011/dec/01/ows-and-student-loans/
But this has hardly penetrated the major political parties, who want to keep the status quo. Instead of fully funding higher education, along with other social services, and immediately cancelling these outrageous student debts, politicians from both parties protect the banks. This leads to terrible pressure on people along with economic stagnation.
Since you seem to be in Russia, you also know that economic collapse can bring all kinds of changes. With global depression and the possible collapse of the eurozone, it will be a terrible mess in 2012. Good luck collecting Sallie Mae!
This is a terrible time we are living in, and I don’t think we have begun to see the worst of it. You need to take care of the most important things and leave the rest to take care of themselves. There comes a time when you have to accept that there is something you can’t do, you can’t pay it back. What can’t be done can’t be done. You can only do what you can for those who are the most important.
Of course! Sallie Mae and the student debt industry do nothing illegal! Their right to abuse their customers is enshrined in law – that’s the whole point of my post.
Setting up a payment plan with them, I was told that I would have the chance to hit at the principal – no problem. In reality, that has not turned out to be the case, and looking back on it, I’m not even sure that their representative knew what she was talking about. I was told how much I’d pay out over time with minimum payments, that’s not a problem, it was all right there in the payment plan. And there were no penalties. None.
Actually, ironically enough, my husband actually *did* have to take out a small ($5000) student loan for graduate school for the sole purpose of building a credit history.
He’d won full scholarship to college (lucky, lucky, man) and didn’t use credit cards. He had NO credit history, which could have been a big problem getting an apartment or buying a coop (as we are doing now). The only reason he had any credit at all was his father’d gotten him a card on his own account because he couldn’t get a credit card on his own. He’d saved too much money from his work during high school & college, bought a car with cash, and had no college loans. Therefore no one would give him credit!
Now his credit history predates his birth.
Isn’t it a screwed up system that actively punishes people for saving money and paying upfront? Or for winning merit scholarships?
They really don’t care if you ever pay back the principal. They make their living on the interest and fees. They wanted you to borrow, made it easy and attractive, and they did it as a trap. This is what makes it immoral. All you did was have confidence in the future, a future which they have wrecked for you, and now you are in their “payment plan” trap. They lied and cheated and deceived which makes the situation no longer a moral obligation for you, but just a practical one in which you have the right to decide in your own self interest.
As for the legal obligations, I don’t see how they are ever going to make good on their threats to take people’s wages and social security. There will be a real middle-class uprising, and the doctors and lawyers will be carrying the flags. Threatening to collect and collecting are two separate things. Just keep their letters in a shoe box and screen your calls with an answering machine.
The credit industry considers their great genius the guy who invented the low minimum monthly payment. Convention lenders said it makes no sense to make the payment so low that debtors would never pay the loan back. He said, “That’s the point! We don’t want them to pay it back. We want them to pay the interest forever.”
My brother recently told me he came out of school $6000 in student loans. Two years later, after making all payments and making all on time, his student loan bill was $8000. What a racket!
As a footnote, we do now have debtors prison, particularly for the poor and people of color.
…works like this: you can’t pay debt. Company X sues you. Court grants judgement against you. Orders you to pay X amount. If you’d had the money you would have paid it in the first place. So you still don’t pay….back to court. Now you are found in contempt of court and that carries a 30-90 day sentence, depending on which side of bed the judge got up on that morning.
Guest, do you really see nothing unethical about Sallie Mae and the whole student loan industry? Really?
@joy
‘Guest’ is just mansplaining how she couldn’t possibly be right. To agree with Natalia you have to first believe that she’s an intelligent and truthful person. He has insinuated she’s a liar but he is flat out telling her she can’t possibly understand her own financial situation even as she thoroughly explains it. The screen shot fits perfectly with her explanation.
My life has been been ruined by my inability to repay my student loans. I went to school to get an education to make my life better and found soon after graduation that I’d be saddled with a long term virtually unpayable debt. I defaulted when I lost my job (layoff) because it simply came down to a choice between eating and paying on the loan interest (I’d already gone through a period of forbearance).
To be honest, I’d contemplated suicide on many occasions. The only thing that really prevented me was the thought of how much it would hurt my family.
The choice to get an education when I was young, idealistic, and optimistic has turned into a total nightmare.
I’ve been contacted by a number of people now, who all say the same thing: suicide seems to be the only way out to them.
How is this OK? Holy hell.
I’ve had my student loans in deferment since I graduated six years ago. The minimum monthly payment they want from me is $250.00, which just isn’t possible with my wages and supporting a family of four on my own. I don’t foresee a future in which this is ever possible, much less the future where my payment increases to $500 a month for the last ten years of repayment.
Yeah, thirty years of repayment for an undergraduate degree. Today I owe more than $10,000 more than I did the day I graduated. I’m hard-pressed to see myself voluntarily taking on this payment ever.
No one made you sign the loan contract–for a DUKE education in JOURNALISM. You knew what you were signing, and now you blame “the system.” Looks like that ivy league education didn’t take.
Tell me more, pumpkin. How’s the system treating you, these days?
Thank you for posting this on alternet. I don’t think that I will be participating in the conversation there, because I have an allergy to contentious issues and flame wars (they really do upset me, and all day long when I get into one) but I think your post is very, very important and should go viral.
I am going to promote it again, both on my facebook page and on twitter, etc. I wish it would reach the ears that need to hear it. I’m trying to follow the conversation you’ve generated there so far. Very curious.
That’s insane. I had no idea. In the UK we can get student loans. They are run by one govt sponsored agency. Interest tracks inflation rates and nothing more. And you don’t start/need to pay it back until you are earning a certain amount, which is a fairly decent graduate wage. Plus, I think if your income dips below that again, you can stop paying. Without paying a default fee or whatever. And there are limits on how much you can take out.
I thought the US was the same, albeit with the need to pay the full tuition fees, which we don’t. Yet. Although we are getting there. Good grief, that’s a screwed up system.
Do you know what with that and the totally nutjob health insurance nonsense, Russia, of all places, looks considerably better to live in than the US. And I think I am going to have to stop moaning about the UK.
I read this on Feministe and thought “oh my god this is my story.” I went to college, went on to get a Master’s degree, and now I’m lucky enough to have my dream job…BUT…I work for a non profit, public interest group. I’m doing everything I was supposed to, I’m giving back, but at the end of the day, I’m so worried about my finances it’s suffocating. And by the time I finish paying off my loans I will have paid something like $80,000. Double what I paid for my education. It’s a sad state of affairs.
I know the system is crazy, but I don’t get your numbers. You paid $9K in interest, $2K in in principal and…$13K in what? Fees?
Or is that further $13K also interest, and the $9K listed is what’s actually been added to the loan?
I believe that SM has got you completely snookered here, I’m just having trouble with the math…
http://signon.org/sign/eliminate-interest-on.fb1?source=c.fb&r_by=1370201
Sign On!
It’s the way they apply payments. Interest accrues faster than you can pay it off, but it’s hard to tell from that screenshot alone.
What’s the annual interest rate on your loans? It looked to me like 5%, but I’m not sure I interpreted the screenshot correctly.
Aigh, gotcha. I was under the impression that it’s illegal to create a payment plan under which interest accrues faster than payments, but that may be limited to the consumer credit/credit card industry.
My wife is staring at 6 figures of student debt by the time she leaves secondary education and goes into medicine. It’s truly a terrifying behemoth – my sympathy to you.
The interest rate varies by loans. And it’s also variable in general. Like, in 2008, when the economy tanked, my minimum payments shrunk by a bit.
Let’s kill the behemoth. Kill it with fire.
Can you give me an idea of the average?
Anyway, I think you should default. Don’t look at is as a shameful failure in life, look at it as you doing your part to help blow a giant fucking hole in Sallie Mae’s books and bring it to ruin.
I’m really scared about the consequences, but right now, I don’t have a choice. It’s either that or not make payments on my consolidated government loans – which actually do go back to the community, in some fashion.
Right now it’s between roughly 5 & 8. Was as high as 14 at first.
” I don’t know if there is a clear explanation for why we have ended up with this system in the first place.”
It’s really perfectly clear. The GI Bill led to the mass-marketing of higher education. In the decades that followed, politicians (at the behest of various activist groups, businesses and constituencies) plowed enormous amounts of easy money into the higher ed system. It came to be a virtual entitlement to the middle class. (Gloss over for the moment the problem of mistaking the markers of middle-classness for it’s causes). Higher ed is good! So more money! Nobody wanted be the meanie bear who cuts spending for aid to college students. So you have a situation where huge amounts of easy money are available for the purchase of a good, and relatively little of the cost is being borne by the purchaser of said good at the time of the sale. This is a recipe for rampant price inflation in ANY market. The prices skyrocket, which is used as justification for more easy money in order to make it more “affordable.” This easy money pushes prices up again. Rinse, repeat. It’s not unlike what happened in the housing market.
Original: $37,443.57
Paid: $15,145.52
Current: $32,659.39
*not including a Perkins which is unavailable electronically
Freaking. Hell.
[...] Perhaps the most worrying part of this burgenoing crisis is that it’s now understood that many, perhaps most, current students won’t be able to pay down their loans. Making the rounds of the blogosphere today is a post [...]
The system is so messed up! Thank you for sharing your story with us. You are NOT the only one. I am $46,000k in debt and will never pay it off because the economy is such a piece of shit and there are no jobs. I’ve thought about killing myself many times because of my student loan debt; sadly, it will most likely happen as well. FUCK YOU SALIE MAE!!! FUCK YOU!!!!!!!
Remember – “If I quit now, they will win.”
[...] Perhaps the most worrying part of this burgenoing crisis is that it’s now understood that many, perhaps most, current students won’t be able to pay down their loans. Making the rounds of the blogosphere today is a post [...]
I recently left my job (I was miserable, HATED what I was doing) and decided to live off of my savings for a few months and find a new position.. something I saw a future in and in an environment I was both proud of and enthusiastic about. I recently landed something new, thank god, but was hitting a rough patch and called Sallie to see what my options were for a sort of deferral. They kindly told me that for 150$ I could give me self a three month break, and not pay anything. Then the lady on the phone told me casually that the interest that would accrue on my account in that time period was nearly 1,700$. I thought I had misheard her, so I asked her to repeat it. She confirmed that, oh yes, in the three coming months I will accrue 1,700$ in interest. I asked her why the rate was so high, if I was freezing my account, and taking a three month ‘breather’. this is when I realized just how totally f*&ked I am. Somehow for the first time ever, I realized that that was the normal amount of interest for a quarter.. and that I am paying over 5 grand a year in interest alone. Divided by 12 months.. thats the minimum payment I’ve been making — one that does not indicate it is an interest only payment. Now I understand I should have realized this before, but somehow I was under the impression that I was making my minimum payments, plus a bit, and that eventually I was going to take some serious money off my balance. NOT TRUE. As I do not see myself making upwards of 5 or 6 grand a month anytime soon, I am going to be paying this until I am in my mid 30′s, at the very least. I hate this system, I hate the people who led us to believe this was good for us, and I most of all hate myself for having gone along with it when I was young and naive. I find it horrifying that the only advice I have for people who are graduating from high school (and i’m only 24!) is think twice about getting an education, really. Its not all its cracked up to be, and hey, you may end up crying yourself to sleep and having a bank account balance of 0 at an age when you should be enjoying life and loving being young and free.
America is broken, and I dont know if we can fix it.
I feel guilty all the time that I chose to get an art degree with some student loans. I thought my internships and volunteer work would lead to an administrative job in the art industry, was told that I had an excellent resume, but nobody has the money to hire me. Now I find myself torn between enjoying the intellectual and technical benefits of my education and wishing I had chosen something that would have led more directly to a regularly-paying career. This even though I know no-one is getting hired and I’d likely be in the same boat regardless of my degree. I’m terrified of what is going to happen when I can’t make my payments.
It’s funny how public or smaller colleges and universities can’t afford to give us decent educations, cutting classes and whole programs right and left, but students still can’t afford to go to school without assistance of some variety–be it scholarships, loans, or parental. My Dad remembers being able to pay for his university tuition with summer jobs. It seems obvious that money is bleeding out of this system but as long as Washington and the financial sector are holding hands, policy makers won’t be concerned with ethics or even efficiency.
And entry-level jobs don’t take into account that someone may have huge student debt payments to keep up with. It’s just ridiculous – salaries have not gone up by much, yet the entire system has shifted beneath people’s feet in the meantime.
As much as I understand your frustration with the injustice in the education/financial system, I have to say that I find the now common comparison of debt to enslavement really offensive. Comparing the debt you are in to the history of slavery and the suffering people had to endure is just wrong.
[...] Perhaps the most worrying part of this burgenoing crisis is that it’s now understood that many, perhaps most, current students won’t be able to pay down their loans. Making the rounds of the blogosphere today is a post [...]
JR, you’re right. Slavery takes on many forms throughout history – indentured serfs in Russia spring to mind immediately. A lot of them had homes and property and yet they were also bound to their overlords – which is what I think about when I think of the current debt problem and health care problem in the U.S. . The phrase “slave to the system” has been around for a long time, however, and I don’t know about that – on one hand, it clearly dilutes the historic meaning of slavery.
This is idiotic a person from Duke should have no trouble paying back $37k in student loans. You should of been able to pay that back 1 year out of school if you really wanted to. Its not that hard to get a $50k/year job out of duke or more. Live frugally for a year or two and you would easily have that paid back.
Its your life decisions that put you in that predicament. Sometimes we have to make decisions in life for financial reasons and not what we want.
My sympathy really goes out you. In my understanding, student loans are financed like revolving debt: interest accrues on the unpaid balance until this balance is paid in full. So unlike a mortgage, you can easily pay thousands of dollars without decreasing the principal.
It’s a racket and you are a victim of exploitation and bad luck. I hope something changes so that you don’t need to default, as the consequences are very damaging. But like you said, you can’t pay what you don’t have, and I for one don’t believe you should have acted any differently based on your expectations at the time you incurred these loands.
I’m not going to respond to Sean’s comment. I am just going to bask in its specialness.
Also, student debt IS a racket. Higher ed is kind of headed in that direction in general, sadly. And I say that as someone who has, once again, had a good career coming out of Duke.
It IS our decision. But the decision is made with few legitimate alternatives. Any office career requires a 4 year degree. These degrees are very expensive. We took out loans expecting to make enough to pay them back. And many of us don’t.
And honestly, 37k for *DUKE* is d*mn good. I have friends who owe twice that for much less prestigious schools. The more we fear our own success is due to luck, the more we blame the unlucky for their fate.
@Sean
In the current economy, a degree from an elite school does not necessarily guarantee any employment at all. Natalia Antonova has actually risen very quickly on her career track and paid over $23,000 to reduce her student loan debt. So Natalia has achieved probably more than most recent graduates in reducing her debt.
But, as others in this thread have noted, the student loan industry is a predatory operation working hand-in-glove with college financial advisers. College advisers who should be dissuading students from taking on non-dischargeable debt are instead colluding with lenders to ensure an income stream for colleges.
Prospective student borrowers needed to be warned that non-dischargeable debt can last a lifetime, especially in the current economy. Alternatives need to be found for funding tuition.
Natalia, you are brave and awesome for talking about this so publicly and purposefully. The system is deeply fucked up, but you have your priorities straight, and you seem upbeat. My heart goes out to those who have come to feel suicide is the only way out. Take care of you and yours as best you can, keep talking about this, and hang in there. ((internet hugs))
No one forced you to take the money.
No one forced you to go to college.
You made those decisions, you pay the money back.
Be an adult.
Oh, I’d love to! Except for a tiny detail – I don’t have it. And all of the money I have paid back apparently doesn’t count either. Hmmmm. Interesting, how that works.
It’s also idiotic to suggest that college is this thing one just chooses on a whim, out of a myriad options available. Considering the fact that the wage gap between those who do go to college and those who do not is only getting huger. I guess “being an adult” means living in a fantasy world that may have been slightly more relevant decades ago. You know, before the economy was run into the ground.
Worst mistake I ever made was listening to a high-school guidance counselor pushing college on every student. $99,000 left to be paid, $30,000 in interest so far, high point was $103,000, 10 years after leaving school I just started to get it going in the right direction.
18 year old’s can’t legally drink because they are not smart enough yet. Why would they be smart enough to be able to judge whether they can take on $100,000 in debt responsibly. Noone knows as a first year what they will be doing when they graduate, much less how much they will be making. It is absurd to think an adult could make this decision properly all the time (they don’t), so why allow kids to screw themselves before their financial lives really start.
If you’re looking for sympathy it’s not a good start to mislead people about how you got into your situation. The sad thing about your story is actually not about your situation in particular but actually it’s how few people are financially literate enough to call B.S. on your story. A few people did but that apparently was “mansplaining”. It seems that it’s a bad thing to be financially literate and to explain finances and loan repayment schedules.
My GF fell into a similar trap with student loans by not being financially aware. Before she met me she consolidated her loans and ended up with a 20yr repayment plan instead of the original 10yr she thought she had. After many years of paying the 20yr schedule she wondered why the balance was not coming down. Very much to her credit she decided to educated herself and realized her mistake. She started with about 30k and just recently finished paying it off.
What? As I said – the payment plan is kind of part of the problem here. You’re encouraged to bring down your lower monthly payments – after all, it’s responsible, should you not have enough cash in a given month. But you’re also told that overpaying on them every month is a solid plan. Except not!
I don’t need “sympathy” from some asshole like you anyway – I need more people to realize that consumer protection for these loans needs to be brought back.
Then we can start rethinking higher ed.
Let me guess… the person who gave you this advice:
“You’re encouraged to bring down your lower monthly payments – after all, it’s responsible, should you not have enough cash in a given month.”
also must have been the one who told you to defer payments which is why you ended up adding 9k to your debt.
I’m totally with you as far as the ridiculous price of higher education but your story is not an example of the need for consumer protection for student loans.
Interest on these loans begins accruing while you are still in school – and work-study is not enough to pay them off.
And I don’t give a crap if someone doesn’t think I’m the perfect poster girl for why this is a problem. It’s a problem a lot of different people are stuck with – the common denominator is an abusive system that has gotten way out of control. I’m sure that if my life is ruined by student debt, a bunch of people will sit back and say, “Bitch deserved it. Went to Duke and then had the temerity to get sick while in repayment. Well, screw her” – but that just goes to show how fucked up our society is in general in regards to lending and financial solvency. People are “tainted” by bad debt, so we scramble to explain why they’re really at fault until a more “deserving” victim comes along.
The truth is, it’s not up to anyone else to judge who “deserves” what.
Natalia,
You are blaming everyone for your predicament except for yourself.
You made the poor decision of going to a school that you couldn’t afford. That is called “living beyond your means”. What’s the difference between going to Duke, when you can’t afford it, and buying an expensive car that you also can’t afford? It certainly wasn’t Sallie Mae that pushed you into going to Duke, that was you and the mistaken belief that going to Duke would be worth the money. You were the one that made the choice, and you were wrong.
The next mistake you made was choosing a career that wouldn’t pay you enough to pay for your student loan. Again, this is a mistake that you made. Sallie Mae didn’t force you to choose your career.
The third mistake you made was burying your head in the sand when it came down to figuring out how much you would have to pay over the course of your student loan. Again, this is a mistake that you made. The numbers are all spelled out for you. It’s basic math. There’s no fine print. If you’re given a loan amount, an interest rate, and a term, you know exactly how much you will be paying. You could easily do the calculations yourself to figure out, “is this something I can afford?” Either you deluded yourself into thinking you could, or you didn’t bother to do the math. This is your fault.
Basically your predicament is based on a series of mistakes you have made. You are everyone else but yourself for choosing to go to Duke, even though you and your family couldn’t afford it, for choosing a career that wouldn’t pay the bills, and for not fully understanding the consequences of taking on a student loan that you couldn’t afford.
Actually, when I got into Duke, my parents’ finances were more than fine.
And I have a great career. Probably way better than yours. As I’ve pointed out, if it wasn’t for the costs of health care, I’d probably continue being Sallie Mae’s little cash cow.
If you think that state schools are some sort of panacea for lower-income people, or people whose finances go south, you really ought to think again. In general, trying to ghettoize lower-income people by segregating them in state schools, while only the rich go to the top schools is only going to perpetuate the continually growing gap between rich and poor. If you think our society needs *more* inequality, so that uppity students don’t get ahead of themselves – you’ve really lost the plot.
Boy, for someone who can’t afford to pay back a $40k student loan, it doesn’t sound like your career is that great.
I grew up in a middle-middle class household, and I’ve *never* lived beyond my means, ever. This includes going to a state college my family could afford, even though I had the marks to go to Stanford or Caltech. I worked throughout college, got summer intern jobs, and left school with no debt. I’ve never had any substantial debt since graduating from college.
Despite me going to a “ghettoized” state college, I currently make in the low 6 figures and my after-tax savings every year (not including 401k) is more than your entire student loan. So, now that I think about it, no, your career isn’t way better than mine.
Natalia, you need to come to grips with the fact that you yourself made a series of poor decisions. It’s okay, no one is infallible. Once you have accepted this fact, maybe you can stop blaming other people for your poor decisions.
Stage college guy, you can go fuck yourself, you self-righteous ass. Most of my relatives went to state schools and guess what, student debt is a huge problem for most of them. Entry-level jobs are not designed for people entering the workforce with student debt — just face it, dipshit.
In general the commenters on this thread just don’t want to admit that in this country, in this point in time, most people are one misstep or one serious illness away from total financial ruin. Trust me, I see it happen up close and personal.
My stepfather was just like you people. The “you can work hard and have a good living in this country, no problem” kind of guy. The guy who thought that bad debt only happened to bad people. He co-signed a relatively small loan for his youngest (at a state school! Of course). They were planning to sell their house at that point, move into a smaller place, real think-ahead type people, now that the kids have all grown up. Guess what? The property turned out to have issues that rendered it pretty much worthless. They took it to court. Imagine the lawyer fees, and this is right around the time my aging mother started developing health problems that insurance didn’t want to pay for.
Long story short – by the time my stepfather died of a heart attack, he was lucky not to be homeless. Living on his sister’s couch. And still refusing to admit that something is fucked-up with our country.
Maybe people can start waking up? Is it too much to hope for?
How do you know how much she makes or has made? And how do you know how much of that went towards trying to fix her ailing health? Or is getting sick a “poor decision” as well?
The lenders and the big banks all count on people like you to carry water for them. But they won’t be there to bail you out should anything go wrong.
Wake the hell up, you self-assured idiot.
The bottom line is, I don’t care if you pay off your student loan, or if you decide to default. You know what the consequences are to defaulting, and if you decide to accept it, then that’s fair. I don’t think it’s moral or immoral to default on your debt. A student loan is a contract that you have made with your lender, and the consequences for default are well defined, so it’s something that both parties should be okay with.
What I can’t stand is someone blaming other people for their own poor decisions. Don’t blame Sallie Mae for you living beyond your means. If your family could afford to pay for Duke, and then the circumstances changed, then the smart thing to do would be to step back, do the math, and figure out if staying at Duke is the right decision. You chose poorly, and now you are suffering the consequences.
It was your decision to stay, Sallie Mae didn’t force you. You didn’t properly think through your decision. Suck it up, accept that it’s your fault, move on, and stop blaming other people.
Nat… Feel free to delete this comment if I wind up revealing too much about your personal situation and your family… But I am about to blow my fucking top here….
State college guy, shut. the fuck. up. You’re talking to someone from an immigrant family, who has spared no expense in helping out her relatives when times got tough for them. Who put her own health on the line for others….. Who ended up needing surgical intervention while underinsured and with her health so bad she could have died. Someone who lent me money while I was going through a crisis of my own. You’re right, she only has herself to blame for rescuing others, now that her own back against the wall.
Smug, self-righteous piece-of-crap people such as yourself make me sick. You’re the real reason why America is going to the dogs. You will cheer on the bail-outs for the big banks, the expensive wars, and you will cheer on when your own neighbors get evicted from their homes.
Take your “education” and shove it where the sun don’t shine. You have learned nothing.
@Lal: sorry, but I don’t classify giving birth as “ailing health”. Don’t confuse the issues here. She had the money to pay for medical care, but she refused to, because she wanted to pay for her student loan. I suggest re-reading what she wrote.
As well, if you re-read what I wrote, my point isn’t about whether or not low-income people are struggling in the US. Of course they are, with 16% unemployment and rising health care costs. If you read more carefully, you’ll realize that I didn’t touch upon that subject at all.
What I did write is that Natalia’s problems are of her own making, based on her poor decisions. She’s says herself she’s not low-income, but she can’t afford to pay her student loans. She took on debt that she couldn’t pay for, and now she’s suffering the consequences, but she’s blaming Sallie Mae and the “system” for putting herself in this predicament. I’m saying, no, it’s not the system, it’s her.
Can you read? Are you capable of processing the words that are put in front of you before you decide to comment on other people’s financial issues? Has your vaunted state education helped you develop these skills?
It’s right there in the comment to you, you brainwashed moron. She skimmed on healthcare when she could. Now she no longer can. Because she could die, not that she is spelling it out, seeing as she probably doesn’t need pity from fucking idiots such as yourself.
Who’s going to help raise her child if she is gone? You? You damn pathetic loser, hiding behind your computer blasting other’s “poor decisions.” Let me guess, you’re older and still under the impression that student debt is affordable or that some vestiges of consumer protection remain. If you’re younger and know all of these things, you don’t have a damn excuse.
Bet you are jealous. Deep inside, you don’t want to see people who “go above their station.” So you castigate them at their lowest. It’s pathetic and transparent.
And go fuck yourself.
@Lal, unfortunately, you are angrily assuming too much about me. I am sickened by every single bail out, and I support OWS. I’ve helped several of my friends survive through foreclosures of their homes that dropped by > 50%. I think Bush, Cheney and Rumsfeld should be put on trial for crimes against humanity, etc. I believe in universal health care, and I think Obama betrayed the country when he didn’t go far enough to keep his promises for hope and change. I will be affected if he increases taxes of families that make over $250k/yr, but I’m fine with that, since I have benefited greatly from living in the US. So no, I’m not a Republican. I’m a firm centrist in my political beliefs but am leaning left after how the Republicans have behaved over the past 10 years.
But I also believe very firmly that people should accept responsibility for their own actions. If there was a genuine predatory nature in the story that was told in the article, I would sympathize, and there certainly are plenty of situations where that is the case. But that’s not what I read in the article. You may be privy to information outside of the article, but from the article, all it states is that she decided to pay her student loans and forego paying medical costs for her pregnancy, even though she had the money. This put her life, and the life of her child, in jeopardy, but there is no mention of any other subsequent medical issues that put her deeper in debt.
I’m glad that her pregnancy seems to have went well and her child is healthy. But hypothetically and God forbid, if a medical issue did arise during her pregnancy and the health of her baby had suffered, would that have been Sallie Mae’s and the system’s fault, or hers? I believe that it would have been hers.
To clarify, I mean if she suffered further financial issues because she chose to pay student debt over medical insurance.
No, you believe that people who “get ahead of themselves” should be punished. This is what it’s really all about, and it’s very much transparent.
There is no consumer protection for student debt. This is why people skim on healthcare to keep from defaulting. It’s why people risk their lives. They are cornered. No one “plans” to have family finances destroyed, or health to suffer while they’re still young, or a myriad of other problems that arise and send people straight into poverty.
You’re talking about someone who paid faithfully into this system even after going abroad. Most people don’t do that…..they know they’re screwed from the start, so why bother??
It’s you who assumes things. If your cushy financial situation ever becomes not-so-cushy, don’t be surprised if people come after you, guns blazing. You, the idiot and the irresponsible fool. No one deserves it. My stepfather didn’t. But he was also fond of harping on about “irresponsibility” to relative strangers.
Well, I certainly don’t plan on dying any time soon if I can help it! I assume responsibility for myself and my family – that’s kind of the point of this entire piece.
I am willing to accept the consequences of a default, should it come down that. But the idea that student debt default should henceforth ruin my life? I am not willing to accept that – for myself and for anybody else. And yet this is what happens, because there is no consumer protection.
I want consumer protection for these loans back. And will apologize for nothing.
As a long-time reader of this blog, I am amazed by some of the ignorance displayed in the comments to this post. Boy, are you people out-of-touch.
Let’s face it, todays generation is paying for OUR mistakes. And they’re getting it from ALL sides. State education? Not good enough and stuch with loans. Private education? Stuck with loans, ready to be eviscerated by self-righteous know-it-alls for revealing they’re human beings with human problems. No education? Shit out of luck from the beginning.
State college guy, I’ve got a niece who went to a good state school in California. Then she was unemployed for over a year. Then underemployed. Then she was laid off (her colleagues who went to Stanford didn’t suffer the same fate). Now she’s in default. You know what girls like her get told nowadays, right? “Your degree lacks prestige.”
My eldest daughter “lived beyond her means.” She accepted daddy’s help in going to a private college. Now he’s abroad with wife number 2, and she’s struggling to pay it all back on an entry-level salary. They’ve got her up against the wall, and it may be time to cut her losses and move abroad. If I didn’t become partially disabled, I would help out, but now I am stuck watching helplessly.
You make the big bucks – there, there, clearly you don’t pat yourself on the back often enough – but fail to see the actual picture, what these young people are facing. So maybe your career isn’t so great after all, if it has allowed you to be this ignorant. Money is nothing to boast about, in the end, if you can be this foolish. Or maybe you still have a giant chip on your shoulder because you didn’t go to Stanford. Hey! I went there! Didn’t save me from trouble in this life. Maybe you can come over to my falling-apart house and gloat at me next.
Enjoy your comfortable existence, if it lasts.
State schools will not keep your loan amounts down necessarily. I went to a state school, one of the most affordable in my state (Louisiana) and I took out about 40k in loans to get my BA and MA. My family could pay nothing toward my education because we were poor. We were frakking Louisiana poor. I got a full Pell, plus scholarships and I still needed to take out loans. Thing is, if I’d been able to find a well paying job, I could have paid those loans off. They wanted about $400 a month. That’s steep, but I could have done it with a better paying job.
Except. I got sick. Very very sick. Chronically sick with an illness that limits my ability to work. I STILL work. Full time, sometimes over 40 hours a week. I have for 13 years, since I graduated. But because of my illness, I can’t do the jobs that would pay me more. I simply can’t because to do so would put me in the hospital. So, I work at my state job and pay back what I can. To give you an idea of how bad things are for me, right now I’m paying back $60 a month, thanks to the Income Based Repayment plan. If I stay here and work for the state for another seven years, my balance will go away. POOF.
Of course, I probably won’t be here for that much longer. My partner and I can’t really survive on my wage much longer, not with the rising cost of medical care and our assorted medical needs. (Yeah, she’s working too. Part time, which is all she can find.) So, we’re going to move back to her home country next year.
The system IS screwed up. I knew I’d have to pay back my loans. I wanted to do that. But for years I couldn’t pay anything and had to have it deferred. (Because my illness could kill me and I wasn’t willing to die in order to pay back Sallie Mae.) Because of ONE loan date, I didn’t qualify to have the government pick up the loan interest while I couldn’t pay, so all that amount added to my principal. Despite the fact that they agreed I was poor enough to qualify for the interest to NOT be added. Because ONE of my loans orginated before the cut off date by one month.
Right now, if I paid according to the payment plan they have for me, I’ll pay back over $100k. For a $40K loan! THAT is messed up.
When we get to Oz, I’ll keep paying, as I can. Lucky for me, because of the terms of the Income Based Repayment plan, when I have no income (which I won’t for at least a year, because I won’t be allowed to work and my partner isn’t required to pay US taxes cause she’s not American) I won’t have to pay anything…and I’ll still be credited for that year. As in, it’ll still go toward the amount of time before the loans disappear. (Seriously, if you have loans and are having trouble, go to IBR.ORG and see if you qualify. You’ll have to specifically ask Sallie Mae about it, because they do NOT volunteer any info about the program. Because it’s reasonable and cuts into their profits.)
So, you know, call me what you want to. I’m poor, despite a decent education and over a decade of job experience, not because I made a bad decision but because of an illness I had no say in. And I’ll pay them 60 bucks a year until I don’t have to pay anything. But I’m not going to break myself trying to pay unreasonable amounts. When the loan payment is more than your rent, it’s too fucking much.
Lal, you are bloody awesome. And thank you for finally bringing up the fact that college degrees are essentially branded and that make all the difference in the workplace and careers. Going to Ivy Leagues is just as much about networking for the future. Going to any other school simply does not give us certain opportunities. I was told point blank by a professor that I probably wouldn’t be able to pursue an academic career in the future in my field UNLESS I went to one of the Ivy Leagues or certain western European schools (Oxbridge, the Sorbonne) for my master’s and doctorate. Sure enough, looking at the faculty of professors not only at my school but others teaching the subject I’d want to…yeah, she wasn’t lying.
But perhaps I will have made more than enough money being an art dealer to pay for that Ivy League education so that I can become a professor in my later years.
I avoid internet chatter about the victims of the student debt industry. It amounts to self-punishment.
But as a high school teacher, I am thankful for some of the comments here. When my students need a quick primer on what the hell is wrong with our country, I’ll know where to look.
The people who looked the other way as consumer rights were stripped away and education was corporatized come out in droves to blast a young mother for trying to do right by her child. If you want to talk “blame,” look in the mirror. You were the ones to betray her generation.
You soaked up the benefits of a booming economy – and want to humiliate and intimidate those who are forced to pick up the pieces now that political apathy and corporate greed have taken things a step too far.
“Public education” is a concept that has gone out the window. “Private education” mostly benefits kids who already have trust funds and connections. Financial aid offices are in on the scam with the lenders. It’s the reality my students live with when they graduate, and I also could afford to ignore it for long. Now it’s a problem I’ve been educating myself about. Too little, too late, I guess.
All of this rings, terribly, terribly true. State College Guy I won’t attack you, but I will say that you should count your blessings.
Like Natalia, I grew up in a poor and was a first generation college student. All my life people told me that I was smart. They told me I should go to college, and if I did, I would live better than my parents did.
I went to a state college, just like state college guy did, but my parents couldn’t contribute one thin dime to my education or my living expenses. I worked part-time and I got a few grants and scholarships, but mostly I had to take loans. Unlike Natalia, I was lucky enough to get mostly federally subsidized loans. When I graduated in 2000, I owed $23,000, and found a job making $12 an hour.
Eventually I decided that a higher degree would make me more competitive in the job market. So I went back to that state college and got an MS. As a graduate student I didn’t qualify for any grants, so when I graduated into the worst economy in decades, I now owed $58,000. That was nearly five years ago. I’ve now worked my way up to earning $16 an hour. And, I would like to point out, I started out at $11.25, and was hired specifically because of my advanced degree.
I was also lucky enough to be able to apply for income based repayments. The loan company that administers my federal loan decided this year that my income was so low, my “income based payment” is zero. Great right?
Well, actually, not so much. It is great being employed and having health insurance and being able to pay my medical bills after having a premature baby who lived in intensive care for six weeks. It’s also great being able to eat, pay rent, etc. I’m very grateful for all of that.
But here’s the downside: my loans are growing. On top of that American Education Services (my student loan company) reports my loan to creditors as though I was on a ten-year loan length. So on paper, I owe more than I earn every month. That means my husband and I continue to share our beat up old Honda Accord with 200,000+ miles on it. I hold my breath every time I get in to drive the 30 miles one way to work each day.
I hate to say it, but I regret going to college. Seriously. I would be doing a lot better financially if I’d just skipped it and got a nice receptionist job. Would I be living up to my full potential? Maybe not, but I also wouldn’t have had the sleepless nights that I’ve had over the past five years.
I just told my niece, who is 14, that her best bet at this stage in the game is to get really good at a trade, or learn a foreign language because I can’t tell her what everybody told me: that a college education is the path to a better life.
Natalia, I’m sorry that you’re struggling with Sallie Mae and I’m glad you’ve chosen to put your health first.
I look forward, reluctantly but confidently, to the stories of parental suicides to pay off student loans for kids. Step in front of a bus at the crosswalk and voila, a big chunk of principal gets paid back. This is an obligation of the current older generation and will make good on the screwing that we gave the younger ones.
The system, as it is, must be gotten over. I have sold my real estate to pay for my son’s undergraduate education. For grad school I have the accidental death all mapped out. First, of course, I will max out the $30k credit line on my Visa since that debt dies with me.
Hey, at least the parents won’t be living beyond their means.
Literally.
Natalia
The title of this post alone made my day. I look forward to reading more of your thoughts. Thank you for sharing. Have a lovely evening.
From Portland, OR
Josh von Kuster
[...] read Natalia’s own story about student debt and it got me mad. It reminded me of my own story and I thought I could share to show why good [...]
[...] Perhaps the most worrying part of this burgenoing crisis is that it’s now understood that many, perhaps most, current students won’t be able to pay down their loans. Making the rounds of the blogosphere today is a post [...]
The big problem is that universities are allowed to only offer assessment for their qualifications to people who have also bought other services from them. If the assessment and the tuition were kept separate, like a driving test is kept separate from driver training, the cost of tuition would go down to very much less than it currently is.
And those people who do not need mollycoddling through academic programmes wouldn’t need to pay for it at all. they could get everything they need from other sources.
The university system is neither more nor less than a giant Ponzi scheme.
Here is what you should have done- gone to a local community/junior college and then to an in-state school for the last 2 years. My two years at community college were completely covered by FAFSA/Pell Grant. It even covered the books. I have zero student debt and am much happier.
I support anyone who was able to get a cheap education – in a corporatized society, cheap education is *the point*. But I’m not going to be shamed about going to Duke, because this guilt-tripping reinforces a pretty dangerous notion at this point in time: if you believe that the top schools are only “for the rich,” or that humanities majors are also “for the people with trust funds,” then you are basically supporting further stratification of our society, and further erosion of the middle class, whether you realize it or not. The gap between the rich and poor is big enough – and growing bigger.
Now, should we have elite schools in the first place? That’s a question worth discussing, I think. I want a more level playing field when it comes to education, ultimately. I hate the “gated community” mentality the top schools suffer from.
I honestly thought I was the worst of the worst, one of the most foolish people walking this green earth for allowing a situation like this to develop.
I was fortunate enough to get a job at the school I got my Bachelor’s from, and so am not paying for my Master’s if I can keep my job. But I had no savings to pay for a Bachelor’s and my full time job salary was just enough to support me and my unemployed mother these last 7 years. My student loans will be tipping just over the 100K mark by the time I graduate with my Master’s.
I wouldn’t dare ask for my principal to be reduced or forgiven – I don’t think the education was worth it, but I understand that I agreed to pay that money back regardless of what it’s doing for me. What I’m havng trouble accepting is that the money I’m going to scrimp and save to pay these loan payments is not going towards paying back what I owe. That money is only going to line the pocket of a company whose wallet’s already swollen through DAILY accruing interest. I just want the majority of what I pay to go towards my principal debt.
I am depressed when I think of the future. It seems like I’ll never have enough money to save for retirement, to have a family, to take vacations. I’ll be living paycheck to paycheck for most of my life, or working around the clock to have extra money (no time or energy to do anything with that extra money, mind you). I didn’t realize in high school that expecting to have one full time job pay for my living expenses and student debt would be like expecting to see a unicorn. I’m truly at a loss.
Nah, there’s plenty of us fools out there. Enough so, that it seems that the entire system’s kinda… broken.
With you wrt the interest.
I am planning on studying in my home country…The “socialist state” of Denmark. Not only is education free for eu citizens, as a danish citizen I am given a monthly allowance for rent and food, etc.
I am not saying this to rub it in anyones face, sorry if it seems like I am bragging.
I find this decidedly American system of overly competitive and incredibly overpriced schools absurd.
Uh oh! Newt Gingrich disapproves!
I don’t think you’re bragging at all. In fact, you’ve given the exact reason why I want to raise any future children I may have in such a system. What we have here in America is based too much on exclusion and that is not healthy for any country that wants to continue to grow and thrive.