The Depth of the Student Loan Debt

[Kobi]

There is an article in the NYT today about the student loan debt topping 1 trillion dollars. Goes on to say 94% of students seeking a bachelors degree are taking out loans. The average debt is $23,000. The people actually repaying the loans is down to 38%.

But, what struck me most was the story of a 23 year old woman who had $120,000 in student loan debt for her bachelors degree in marketing. She owed $900 a month in payments. She was working 2 waitressing jobs, making $225 a week. Her mother, who cosigned the loans and is on the hook for them, took out a life insurance policy on her daughter...just in case.

The story highlights how many students and their parents are feeling misled by college financial aid people who they feel either downplay the actual payback costs, give odd and difficult to understand information about the actual payback, and/or over estimate the job opportunities/salaries which might be available to a student after graduation to justify the expense/debt.

We have all been led to believe a college education is beneficial for our future earnings. This was pretty much the reality in a rapidly growing economy and when jobs were not being outsourced for cheaper international labor. Kind of a different reality today.

Been a long time since my college days. Was a different reality, different economy, different cost of living, much cheaper educational costs, many more opportunities, and advanced degrees upped your income significantly mitigating the costs of any loans.

So, I am wondering what others experiences have been with student loans. Did you feel misled? Were you shocked by the pay back amount when you received it? Were the costs offset by wage increases? Anything else that sticks out in your mind about your loans?

[ruffryder]

I was not misled. I know education comes with a price. . sadly. I think it should be free Or at least if someone is gonna commit and take the time to better educate themselves for the economy and their future they should be able to find a job in the degree of their choosing so that they are able to repay the loans. give and take type of ordeal. again, i'm saddened with how billions of people owe on loans and cannot find the career they were dreaming of.

On a personal note, mine have been offset due to my wages. I do not have the job I would like my degree to reflect and I'm obviously not making enough to pay my loans back yet. I am grateful they have been offset or pushed back however what will it cost me later? ya know.. and that's the least of my worries regarding this. I wanted a degree for a career. Is it the economy's fault or my fault? A bit of both I suppose...

Now, I wonder do I go back to school, but in what .. What is the economy in need of?

[princessbelle]

Great thread Kobi!!!!

I finally just about have mine paid off. Through breakups and a divorce i have put my loan on hold a few times over the years. I worked going to college and paid a lot of my tuition as i went, thankfully. I owed roughly 12,000 at the beginning and now only owe about 1,500. So, happy days ahead when i can quit having to pay them $150 every month.

They do make it easy to get loans it seems. I really didn't give it a second thought when getting one. It was like "here is your money". If it had been more than 12,000 as i know many are, i would be sick right now.

It is good to get the loans if you need them, but running them up and up and up, i can see how it could get out of hand. Not sure what the cut off should be, but IMO at some point in the borrowing money time line, it would be nice if maybe these companies at least offered some counseling. Just so peeps know what they are getting into. IMO they make it too easy.

[1QuirkyKiwi]

My Grandparents cashed in their life savings to pay for me to study at the RSN. I refused, yet, they insisted my need was greater because it was for my future and they had lived their lives. I will always be eternally grateful to them for their generosity. When I got a part-time job as a Medical Artist whilst studying, I paid for them to visit me in London, see some West End shows and stay with family in Italy. It was the least I could do.

I’m about to embark on a Master’s degree and I’m funding this venture myself and not getting any help from grants, sponsors or loans because I’m not guaranteed to get accepted for any. Financially, things will be tight, and I’ve budgeted for daily and weekly living for myself and my furbabies. I’ve tried to take into consideration any unforeseen expenses.

I’ve been offered a chance at doing something I’d love to do which will earn me a little extra money; it won’t be a lot, yet, the experience and learning another Artist skill will out weigh this for me. It will mean deferring my Masters for a year. The money will come in useful, though…

[aishah]

i wasn't misled, but i made a huge mistake taking out loans for my first year of graduate school out-of-state and then realizing the program wasn't for me. i only had about $25k in loans for undergrad (which was high, considering, but i needed it to help out with medical bills - i also worked full time or more and went to school full time and i was really sick). if i'd really known all of my options and hadn't been fed the idea that i had to go to college no matter what, and if i'd realized the recession was coming (i graduated right at the beginning of the recession), i probably would have saved money a few years and then gone to college. but with my physical situation i was also scared if i didn't get it done right then i would never have gotten a b.a.

i had to take out about $45k for the year i spent at uva, and it was a complete disaster - their financial aid system is terrible, they don't disburse on time, my job situation was a mess, the whole thing was just a disaster. i ended up having to borrow extra because my loans weren't disbursed on time and i had no way to pay for health insurance. the attitude of the financial aid counselors were "why can't you just find a family member to borrow the tuition/rent/food money from until it's disbursed?" my parents are dead and i'm estranged from most of my family and we're all poor. most students at uva have well-off families.

i wasn't shocked - i knew what i was getting into, i just made a horrible mistake because i was not aware of how awful uva's financial aid system was. if i hadn't had to leave school in large part because of it, things would probably be a lot different now. if i'd known what i was getting into with uva, i probably wouldn't have gone. but as far as the loans themselves, i did my research and i knew what i was getting into.

the one big shocker is the amount of interest, though - the principal amount of my loans is around $68k (it's almost entirely federal stafford loans, a mix of subsidized and unsubsidized, with one small plus loan). assuming i manage to pay all of it back, i'll probably end up paying at least that amount or more in interest. it would be one thing to say that yes, i might be able to pay that much back in 10 or 15 years, IF it were just the principal amount. i think the same goes for a lot of borrowers - when we talk about loan forgiveness, it's not because we're trying to get out of our responsibilities. but the interest even on federal loans is ridiculous.

if it weren't for income-based repayment, i'd probably be homeless because of my loans right now. thankfully due to ibr i only have to pay based on my income (this year my payments are $0, next year they'll probably be a few hundred dollars or more). ibr is a godsend. but at the same time, by next year, i'll probably already owe $5-$10k extra in interest.

i would like to go back for an msw because i know that it'd pay for itself (and the financial aid situation would probably be a lot better, and it'd be a great career decision). but i won't do it until i'm able to save up money to cover the tuition, and until i'm able to start making payments on my current loans.

[aishah]

the cutoff for federal loans is around $140,000, but if the cost of tuition keeps rising like this, the're going to have to up it.

(edited cause it used to be $120k but apparently they've upped it to $140k. this is only for grad and prof degrees...for undergrad it's $31k for dependents and $57k for independent students.)

http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp

[*Anya*]

I paid off my student loans for my RN and bachelor's degree though it was a sacrifice at the time.

My oldest daughter is paying off her Master's degree and her husband, his PhD. They have been paying on their respective student loans the whole 10-years that they have been married and there is no end in sight.

They both teach at the university level and are raising 4-children.

Neither of them begrudge the repayment but the interest on the loans is ridiculous and does greatly impact their ability to save for their own children's future education.

I have no answers for the problem of student loan debt but feel it is a critical problem for all of us.

[JustJo]

I managed to get my BA back in 1984 without taking out any loans....PELL grants were a bit more generous, there was all the "work study" help we could manage to fit in, and I worked a full time job on the side. It meant that my studies and my GPA suffered...but at least I didn't graduate with debt.

I went back after a 20 year absence and got an MS and an MBA. I was still working full time, but also covering a mortgage, supporting my son, etc. I went to a very reasonably priced university and ended up after 4 years with about $45K in debt.

My salary increased by about 2/3 within 2 weeks of graduation.

I pay $325 a month, for 25 years...because I couldn't afford the original $500 a month and had to refinance them. The interest is partially, but not completely, tax deductible. If I pay them back on schedule I'll pay a total of $97,500 for the original $45,000 I borrowed.

It's worth it for me, but it is a burden. I do not have the freedom to take a lower paying job because it's something I love....because I have this debt to pay. I can't choose to not work for awhile....because I have this debt to pay.

I'll be paying for my son's college education at the same time I'm paying back for my own, and also trying to save for retirement. My last student loan payment is due the month after my 70th birthday. Guess who will not be taking an early retirement....despite having worked steadily since I was 15.

I do hear of people with more than $100K in debt for a BA...and honestly have to question what in the heck they were thinking, or who was selling them a bill of goods at the college they attended. Some degrees are worth the debt, and some simply aren't.

[stargazingboi]

An interesting thread indeed. I can't say I was mislead at all. I knew what I was getting into and the sacrifices that would follow. I was lucky in many ways, the Pell grant covered a good portion of my undergrad, but still I walked away with about 20,000 in debt.

Right after completing my undergrad I decided to continue my education. As many people know, once you obtain your BA the funding is limited. I researched scholarships, and other ways to obtain financing. I stumbled on a trainieship through the school I was attending and applied. They would give me money and I would give my service after graduating. This meant that for every year they gave me money, I owed them two years of working in the public or nonprofit arena. If I were to choose to go private the monies would become a loan and repayment would then be expected.

I was given over $30,000 towards my Master's degree. I then only had to take out another $25,000 in student loans to complete my education. Totaling about $45,000 in debt at graduation, which equaled over $550 a month in student loan payments.

I was lucky enough to obtain a position before walking across the stage. I decided that I would rather sacrifice now than later and kept the 10 year agreement. I did not rush to consolidate nor did I rush to extend the life of the loan...but I am also very aware of how lucky I was to snag a job in my field, in a nonprofit sector, that paid me enough to be able to do this.

This past year I was given notice of a program that would allow me to consolidate my loans, reduce my payments, and lower my interest rate. I had them base it on my income...which dropped my payments down about $150 a month for the first 12 months. After the first 12 months it will drop again by another $75. While keeping my 10 year agreement. With the drop of the interest rate I will also save about $15,000 over the life of the loan.

I feel for my fellow classmates as I know many of them walked away with over $120,000 in debt and upon graduating they had to consolidate and extend their loan times to 20-30 years. So, I am thankful each day I do not face that burden.

So, do I think my education was worth it? Yes, yes I do. I wouldn't change a thing about it, as I am happy in the work that I do..I wake up each morning looking forward to the day ahead.

[Julien]

I do hear of people with more than $100K in debt for a BA...and honestly have to question what in the heck they were thinking, or who was selling them a bill of goods at the college they attended. Some degrees are worth the debt, and some simply aren't.[/QUOTE]

I totally agree with this, in this economy it isn't worth it to go into the humanities or the arts, for example, because getting a career in these fields is much more difficult to achieve. I can see the universities get their funding for these areas cut back because of the lack of demand or need. Other fields such as business and the sciences are more stable than these fields of study. It is not enough to love your area of study and making it your life's work. You must work in this economy to make a life and that excludes some areas of study which is a pity because I believe when we lose the Humanities and Art we lose our humanity.

[WickedFemme]

[SIZE="3"]argh!!!!!!!
I paid way too much for my B.A. because I went to a private university with a 'name', which was stupid. I then went on to pursue a Master's degree and paid way too much for that as well considering I work in nonprofit and you know what that means. I don't know if I will ever be able to pay my student loans off[, however, I am taking advantage of the Student Loan Forgiveness Act, which means that if you are in a service oriented industry like a nonprofit worker and pay for ten years on an income contingent plan, they will forgive the balance of the debt. I didn't know about this until I got this really nice man on the phone that works at William D. Ford. My payments are almost as much as my rent and that sucks./SIZE]

[Just_G]

I just graduated in March with my associates in drafting and design at ITT Tech. I owe about $35,000. I applied for every scholarship and/or grant that I qualified for and wrote, god only knows, how many essays about why I deserved to win that scholarship/grant. Doing that is a crock of shit...I didn't get one. Not one. I applied for at least 150 over the last two years.

I did get a pell grant the first year, but it didn't really put a dent in what I owe, but I am thankful at least that much was paid for....for free.

I got offered a job in my field the week before I graduated. I am now working for one of the biggest architectural/engineering firms in the country. I love what I do, but until I get promoted and start making above the minimum of what they pay engineering techs, it will not be easy to pay the loans back. Luckily, my mom is paying the first year of my loans back until I can get my feet set doing what I do.

I think it is really bad that they let a lot of people that don't have anything sign up for such a large future debt, knowing damn well that there aren't jobs in the field they are learning or that are so saturated with applicants, that it is impossible to make enough money to pay back your loans. They really sweeten up the whole "get your education so you can make more money" thing.

Right now, with this new job, I am working 10 more hours a week, and only make $49 more a week than I did before I got this degree. I accrued the $35,000 debt, basically to earn $49 more a week. :blink:

Granted, I have a really bright future and all, once I get some experience....but it is going to be a couple of years before I get any type of raise that will allow me to afford not only my school loans, but also a car payment and my mortgage. It's going to be a struggle for a while longer, but I think in the long run it might be worth it.

[PaPa]

Great topic! This is an issue which has caused me to think a lot. I am in the last year of my Master's degree in Vocational Rehabilitation Counseling. If I play my cards correctly next Spring, then I will move from an internship right into a position with our state VR office. Once in they have a loan forgiveness program which will forgive my debt. I am very grateful that I have that opportunity because quite frankly I do want to go on for my doctorate. The loan forgiveness will be a great asset because I can then move into the doctoral with a clear slate and a state job to boot.


Secondly, I wanted to add one more thing to this conversation. Within the last year or two the government has taken over these loans. My thoughts about this move was this: First of all, the government really should not be managing student debts. Secondly, as such I can foresee in the future the government being able to step in and say, "since you defaulted and cannot afford to repay your debt, then I am sorry you will not be able to receive governmental subsidies such as public assistance or disability benefits." That worries me because quite honestly that could affect a large number of people. Right now the rules and regulations regarding default for those on disability is that the cash benefits received cannot be touched. However, we all know how the government keeps taking more and more from the people. Do these issues concern anyone else??

[Kobi]

I was one of those lucky people who didnt need to finance my undergrad degree. Educational costs back then were nowhere what they are are now. I did have to let go of my dream of going to a particular private college and attend a state university instead. Am thankful I did cuz it saved me a lot of unnecessary debt.

Did finance half of my graduate degree. I financed thru a local bank rather than the school financial aid office. The terms were very clear and the expected pay back was upfront and reasonable.

I worked for a non-profit organization which bumped up my salary considerably with an advanced degree. Plus, I was able to get numerous side jobs. The increase in income was more than enough to carry to monthly payments. Remember we are talking like 30 years ago. Different world back then.

Once I paid off the loan, I continued paying the monthly payments to my own bank account - figured if I managed to survive without this money for 10 years, I could continue to pay it to myself. Thanks Dad for teaching me to always pay myself first.

This story was really bugging me cuz the student loan industry is starting to feel and look a lot like the subprime mortgage industry. People are incurring a great deal of debt without realizing the payback costs and practices.

Most of the loans are administered thru Sallie Mae of the Freddie Mac and Fannie Mae family of shysters.

There was and continues to be a big thing about deceptive business practices with Sallie and her associates, particularly in forcing defaults on loans. 60 minutes did a show on this a while back and I did find an article in the Washington Post about it. There is a huge benefit to Sallie Mae if people default because with late fees and penalties, the amount owed can double almost overnight.

People are paying incredible amounts of money monthly but are only covering the cost of interest, late fees and penalties. They are not paying anything off the principle. Thus they will never pay off that debt.

And, there was something about Sallie Mae being paid not only to process the loans, hold them, and collect on them, there was a built in additional profit whether people repaid them or not i.e. a built in bail out with a guaranteed profit margin.

This irks me.

Here is the link to the article: http://www.washingtonpost.com/wp-dyn/content/article/2007/04/26/AR2007042602627.html

[aishah]

Secondly, I wanted to add one more thing to this conversation. Within the last year or two the government has taken over these loans. My thoughts about this move was this: First of all, the government really should not be managing student debts. Secondly, as such I can foresee in the future the government being able to step in and say, "since you defaulted and cannot afford to repay your debt, then I am sorry you will not be able to receive governmental subsidies such as public assistance or disability benefits." That worries me because quite honestly that could affect a large number of people. Right now the rules and regulations regarding default for those on disability is that the cash benefits received cannot be touched. However, we all know how the government keeps taking more and more from the people. Do these issues concern anyone else??

this worries me a lot. already, if you default on your loans, the government can garnish your wages no matter how far below the poverty line you are and you can never get your loans out of default or defer them, even if you are eligible. my sister's life has been pretty much ruined over this - she was eligible for deferment because she's on food stamps but didn't know how to file the paperwork, and now they're garnishing her $1200/month wages - meanwhile she has two kids, is disabled, etc. my partner very nearly went into default as well, but after watching my sister go through this i've kicked his ass and made him do the paperwork.

i know SO many people who don't understand how to do the deferment or ibr paperwork and thus end up in an even bigger mess because they're being charged for payments they can't afford and shouldn't have to make. and once you're in default you can NEVER get back into deferment. the process to appeal having your wages garnished and your tax check taken is long and arduous (took about 2-3 months and my sister had to produce 45 pages worth of paperwork showing how poor she is - and they STILL garnish her wages and take her tax check, they just take slightly less money out of her paychecks now- $100 instead of $300 or so).

i do know some folks who've gotten loans totally discharged due to disability, but you have to prove you can never work again and you essentially have to be in complete abject poverty on ssi/ssdi.

the one positive aspect of the gov't taking over more loans is it streamlines the process (this helped a lot as i have loans with three different lenders - which i had no choice in) and the government tends to be less shady than the lending companies. but i do worry about repercussions in the future, especially as someone who's been on food stamps and may have to go on disability eventually.

honestly i'm just praying really hard that the government sees what a horrible problem this is and at least forgives the interest, if nothing else. i mean, it's going to completely cripple the economy otherwise. i'm not getting my hopes up too high, though.

[1QuirkyKiwi]

[QUOTE=Kobi;584428][COLOR="Navy"]

I was one of those lucky people who didnt need to finance my undergrad degree. Educational costs back then were nowhere what they are are now. I did have to let go of my dream of going to a particular private college and attend a state university instead. Am thankful I did cuz it saved me a lot of unnecessary debt.

Did finance half of my graduate degree. I financed thru a local bank rather than the school financial aid office. The terms were very clear and the expected pay back was upfront and reasonable.

I worked for a non-profit organization which bumped up my salary considerably with an advanced degree. Plus, I was able to get numerous side jobs. The increase in income was more than enough to carry to monthly payments. Remember we are talking like 30 years ago. Different world back then.

Once I paid off the loan, I continued paying the monthly payments to my own bank account - figured if I managed to survive without this money for 10 years, I could continue to pay it to myself. Thanks Dad for teaching me to always pay myself first.

This story was really bugging me cuz the student loan industry is starting to feel and look a lot like the subprime mortgage industry. People are incurring a great deal of debt without realizing the payback costs and practices.

Most of the loans are administered thru Sallie Mae of the Freddie Mac and Fannie Mae family of shysters.

There was and continues to be a big thing about deceptive business practices with Sallie and her associates, particularly in forcing defaults on loans. 60 minutes did a show on this a while back and I did find an article in the Washington Post about it. There is a huge benefit to Sallie Mae if people default because with late fees and penalties, the amount owed can double almost overnight.

People are paying incredible amounts of money monthly but are only covering the cost of interest, late fees and penalties. They are not paying anything off the principle. Thus they will never pay off that debt.

And, there was something about Sallie Mae being paid not only to process the loans, hold them, and collect on them, there was a built in additional profit whether people repaid them or not i.e. a built in bail out with a guaranteed profit margin.

This irks me


I was advised by several people that the student loan train is a run away and if possible to either get sponsorship or fund it myself. If I defer for a year, the fee will have risen, yet again, but, I'll miss a possible once in a lifetime opportunity. I'm damned if I do and damned if I don't, lol!

My cousin is looking to do another degree full time and will get the funding, but, the repayments will be crippling. If he does the degree part-time and pays for himself, it would take him 7 years to graduate and he's not guaranteed a job at the end...

[Kobi]

I was advised by several people that the student loan train is a run away and if possible to either get sponsorship or fund it myself. If I defer for a year, the fee will have risen, yet again, but, I'll miss a possible once in a lifetime opportunity. I'm damned if I do and damned if I don't, lol!

My cousin is looking to do another degree full time and will get the funding, but, the repayments will be crippling. If he does the degree part-time and pays for himself, it would take him 7 years to graduate and he's not guaranteed a job at the end...


I hear ya. Tough tough decisions folks need to make these days.

[PinkieLee]

$35,000 in student loan debt ~ yeah, that's me, too!

I'm not gonna lie... I am absolutely pissed off at myself for taking out those loans, because honestly I didn't need them. I had received scholarships through the American Legion & American Legion Auxillary for the entire time I was in school (which paid 100% of my tuition) and I decided oh I can just take out a few loans so I don't have to work while I go to school. Ugh, yeah not so smart. Not only did I get the loans, but I requested the max amount available for every. single. semester.

After graduation, I also made another stupid mistake and deferred some of my payments for two years (which still racked up interest). Because I had taken out so many loans, with different lenders through my college education, I had two that went into default before I even realized it. Then the letter to my employer came when they decided to garnish my wages.

So, two of the loans ($8,159) started being garnished from my wages at 15% of my weekly pay. Luckily, I got those paid in full within a couple of years & have been able to make faithful payments on the remaining student loans that are in consolidation.

Where I live, one of the local community colleges doesn't even offer financial aid anymore because the default rating was so high and student loans were cut off. If students want/need loans, they have to find them independently.

[theoddz]

Well, I jumped into college right after I got out of the military for medical reasons. Back then, all the military offered in the way of a "GI Bill" was something called the VEAP (Veterans Educational Assistance Program). It was a contributory program that had a relatively low cap and for every dollar the military member contributed, the gov't contributed a certain amount....can't remember what that was because I didn't elect to participate in it when I was serving. Stupid me. I wanted my money....all of it, at the time, to party, so that was me being young and stupid. The VEAP was a shitty program, but it was something, and when I got out and wanted to go to college, it was something I didn't have.

So I jumped into college at a private Catholic college in the Midwest, not too far from my Mother's place. I took out a Pell Grant and I think they're now calling the old "GSL" (Guaranteed Student Loan) a "Stafford Loan" now, but I'm not sure. It was for $2500. There was another $500 loan I took out, too, and I think it was called an "NDSL" (National Direct Student Loan) that was from the college, but also guaranteed by the federal gov't. Well, I only hung in there for about a year, or 2 semesters, due to both medical issues and my partying around and, well, chasing women to be honest. I dropped out after a year.

Well, I bounced around to several different cities and I'd get those bills from my student loans, then after a while, those started to come from collection agencies. I didn't have the money to pay them or even send $20 a month because I didn't even have enough to live on, and yes, I was partying (quite) a bit too. Then an accident at work in Florida disabled me with a bad knee injury that took me 5 years on work comp disability and 3 difficult surgeries to overcome. I had to move in with my mother, which was hell on me. Finally, I met my ex, whom I am still good friends with, to this day. She was 16 years older than me, but a hellofalot wiser and she became a stable and steadying influence in my life, in so many ways. She was a career Navy woman and a senior NCO. She was also the first woman I ever lived with, and so we packed up when she received orders to Maine and off we went together. At about the same time, the doctors released me back to work. They gave me a lot of restrictions, too, and for a person who had always worked with his back and not his mind, I found myself in a job world where I had no job skills that would allow me to do anything that fit those new physical restrictions. I had to go back to school.

There was a HUGE problem with going back to school......the LOANS. My loans had been in default for nearly 10 years and just about every collection agency in the nation was after me for payment. Of course, I had moved around quite a bit and, as they say, "it's hard to hit a moving target". Apparently, when someone, even a collection agency or creditor wants to sue you, the law says they have to sue you in the state/city where you live, so if you move around a lot, that's really hard for them to do, but they did garnish all of my tax returns for just about all of those 10 years in which I was delinquent/defaulted. You see, that's another thing they do. They take your tax returns and they also won't release your credits or academic records from your previous school(s) so you can go back to school. Those loans never, EVER go away, unless you die or prove that you were cheated by the school(s) you attended through the loans. I had to start all over again. That was a bitch. They really do screw you when you don't pay your school loans. It's kind of like child support....only when you owe that, they can put you in jail if you don't pay. Thank Jeebuz there's no such thing as "debtor's prison" in America for things like school loans or I'd have been surely sitting in it.

When my work comp case was settled out, I was awarded a relatively small sum of money for what they called "indemnity". I also had heard of something called "State of Maine Department of Vocational Rehabilitation" in Maine and I contacted them and told them the situation about my health and my long and tired story of student loans and default. I had to get really honest with them about my role of irresponsibility and how I intended to get serious and get back to school so I could get back to work and start living a good and productive life again. I made good friends with the folks in that office and they helped me with the money I lacked from my own little stash of cash from my work comp award. What I didn't have the money for, they supplied, and somehow I was able to talk my way into the state community college program for Respiratory Therapy. I had to start from the beginning, though, with the basics like English 101, History, etc., but it was well worth it and very enjoyable, on the whole. I did really well in school and made the Dean's List all the way through. I even earned an academic scholarship award for something I wrote for the Maine Society of Respiratory Care one year.

Fast forward another 10 years. I was now working for the federal gov't. I had finally gotten my full Veterans benefits and the medical retirement they owed me from the illness I got while on active duty and had been suffering with for so many years. I was feeling better than I had felt since my teens and wanted to get into a new house, as nearly everyone in Las Vegas was doing, during the early 2000's. I'd fixed my credit report and gotten my score way up and had even saved a bit of money for the downpayment that I really didn't need, since I intended to use my VA Home Loan benefit. I was ready to go!!!! Then. It. Hit. Again. .......the damned loans that had not gone away.

You can't get a federal loan, such as a conventional FHA or even a VA home loan, if you have defaulted federal student loans. Hang it up, because it ain't happening and you won't get a dime of federal money if you have defaulted student loans. I started reading, though, all about credit and federal loans. I gave myself another education in how credit works. I had done it when I cleared up my credit report, but student loans are another matter. There's different laws regarding how they're reported and how they're collected. There's also something that a lot of folks don't know about getting rid of them. You can sometimes settle them for pennies on the dollar, but you have to know how to do that, too, or else it can make your credit report look even worse. Here's what I did.

My original total loan amount was about $3000, but by the time I pulled my head out of my ass, nearly 20 years later, the interest had racked up to nearly double the original amount. I owed nearly $6000. So, I called up the Dept. of Education and spoke to one of their collection people. I told him my long, sad story, emphasizing my "Disabled Veteran" status, and I said that I had managed to scrape together, borrow and scrimp, about $3000. I asked him if, under the circumstances and since the loan was so old, if they'd consider accepting that $3000 as full payment and settlement of the debt. They guy I talked to seemed reasonable and sympathetic and receptive to my offer, but said he'd have to ask his supervisor, but he'd call me back and let me know. The next day, he called and said that my offer had been accepted and to send a cashier's check for the $3000 and they'd mark it "paid in full".

Now, here's the trick with this.......You don't want them to note on your credit file that the loan was satisfied for less that what was owed. If you do that, it could be considered as "derogatory" on your credit file. You want it either completely deleted or noted "PAID IN FULL" or "FULLY SATISFIED". The next, and most important point of all, is to get it in WRITING that these are the terms of acceptance, BEFORE you mail them ANY money. You want it in writing that they will NOT make any derogatory comments/details of the settlement in your credit file. They shouldn't have any problem doing this, either. The Dept. of Education did what they promised to do, and I sent them the $3000, and now my loans are gone, paid in full. Oh, and I bought my house with my VA loan benefit.

I know there are people who owe more than me and certainly those who don't have the same financial circumstances as I have had/do, but maybe there's some information here that someone could use for an idea about how to help their situation. There's also a free credit information forum here online that's simply a goldmine for information regarding credit and how to handle problems with student loans, collections and settling of. It's located at www.creditboards.com. The student loan part of the forum is here: http://creditboards.com/forums/index.php?showforum=19

Good luck, folks. I know it's an uphill battle, but it's not impossible or hopeless. Things can work out.

~Theo~ :bouquet:

[Kätzchen]

There is an article in the NYT today about the student loan debt topping 1 trillion dollars. Goes on to say 94% of students seeking a bachelors degree are taking out loans. The average debt is $23,000. The people actually repaying the loans is down to 38%.

But, what struck me most was the story of a 23 year old woman who had $120,000 in student loan debt for her bachelors degree in marketing. She owed $900 a month in payments. She was working 2 waitressing jobs, making $225 a week. Her mother, who cosigned the loans and is on the hook for them, took out a life insurance policy on her daughter...just in case.

The story highlights how many students and their parents are feeling misled by college financial aid people who they feel either downplay the actual payback costs, give odd and difficult to understand information about the actual payback, and/or over estimate the job opportunities/salaries which might be available to a student after graduation to justify the expense/debt.

We have all been led to believe a college education is beneficial for our future earnings. This was pretty much the reality in a rapidly growing economy and when jobs were not being outsourced for cheaper international labor. Kind of a different reality today.

Been a long time since my college days. Was a different reality, different economy, different cost of living, much cheaper educational costs, many more opportunities, and advanced degrees upped your income significantly mitigating the costs of any loans.

So, I am wondering what others experiences have been with student loans. Did you feel misled? Were you shocked by the pay back amount when you received it? Were the costs offset by wage increases? Anything else that sticks out in your mind about your loans?



Yes, I feel misled. I went back to school during the national crisis of the early oughts (2000’s), at a time when people were losing their life long jobs in sectors no one thought would sink during this crisis. There was also the housing crisis too, which tanked millions of home owners and left them with “landslide” of debt.

I thought back then that I could create a better life for myself by earning a bachelor’s and a master’s, as school fin-aid counselors led me to believe I’d find a way to create a better life for myself.

It didn’t turn out that way, at all. Instead I have a life time of horrific debt which got worse under the first reign of terror by T——p and his Education Secretary who assessed horrible interest fines on my school loan debt and my continued inability to make monthly payments which exceed my earnings, all-together.

Now, I should be able to “retire” from my work life, but I can’t at 65.5 years of age. And now, millions of us like me face more harrowing years of the same perpetrator who cooked his own books for years and is a felon who got was voted into power by people who have no clue what this next president will do to our country.

It’s truly sad, what has happened to us all who believed in the idea that upper education would allow us to create a better life for ourselves.

You are missed Kobi. Thanks for your forum thread and I’m sorry I didn’t find it until today.