The Depth of the Student Loan Debt

[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.

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??

[aishah]

Originally Posted by PaPa

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.

[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...042602627.html

[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]

Originally Posted by 1QuirkyKiwi

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~