To Everyone Living in Student Loan Repayment Purgatory

Subject: To Everyone Living in Student Loan Repayment Purgatory
From: Student number 454857295035
Date: 28 Mar 2018

I have to start by saying that my story is not that sad. By all regular standards, I live a good life. I understand that when looking at things from an outside perspective, I may come off as whiny and ungrateful. Maybe even lazy and entitled. However, I just got off the phone with my private student loan provider, and I am filled with both rage and a feeling of defeat. Which is pretty much how I feel every time I get off the phone with them.

I have a both an undergraduate and graduate degree with a mountain of student loan debt (ringing in at about $150k.) I am in the field of social work and I don’t make a lot of money. I started my college career 12 years ago. While I was still in high school, my parents sought out as much federal financial aid as they could get for me. They didn’t have a college savings for me, despite working full-time jobs my entire life. There wasn’t extra for that. There certainly wasn’t extra to pay my tuition once it was in effect. So, they took the minimal financial aid I received and applied that to my bill, and the rest of my college costs were paid via private student loans from one company. My parents did not go to college. I am the oldest of three, and I was their first foray into this world. They were not well versed on the different methods out there to pay. The loan servicer they chose was touted as the number one student loan company at that time, so that is whom they chose as my company. They didn’t borrow extravagantly. Just enough to get the tuition and books paid in my name, with them as cosigners.

I admittedly had no idea what was going on financially at that time. I worked throughout my years in Undergrad to pay my living expenses, but only looked at my loan costs when graduation came around. As it turns out, I had three private loans to pay back. All three of them at sky-high interest rates. I owed $32,000 privately when I graduated. My first job out of college paid $32,000 a year. My private loans were $400 a month. I was diligent about paying because I had the means. I paid that amount in full for 4 years. In that time, I was married, had a child, and divorced. I found myself a single mother, in the same job, not making that much more money, but with consistently increasing expenses. I decided it was now or never to make a move for my future. So, I decided to go back to school for my Graduate degree and a career change. After that, I was working full time, going to school full time, and taking care of my daughter. Finances were extremely tight, and when I went back to school, I was able to defer all of my loans, which allowed me to support myself at that time.

Fast-forward 3 years. I have graduated with my Master’s Degree. I am about to be married again, and I have a new baby. In addition, my student loans are no longer being deferred and I have accrued $100,000 in Graduate tuition costs as well as an additional $20,000 in interest from deferring my private undergraduate loans for 3 years. After paying them on time every month for 4 years, I was now $20,000 more in debt than when I started with them.

I am in social work now. I work for an amazing company. I love my job. I love the work that I do, and how I am able to directly help people on daily basis. Nevertheless, I do not make a lot of money. My soon-to-be husband is a 6th grade math teacher. He also runs his own wood working business on the side. We both make just enough money to cover our family expenses with little wiggle room.

I was prepared for my student loans to kick back in. I had full intentions of paying them. Working with the Federal Loan system has been a breeze, and I honestly would even use the term “wonderful.” I consolidated all of my federal loans into one large bill. I owe them $100,000. Within days, I was able to very easily complete an income-based payment request form. I submitted and received my payment amount based on my income. They decided I could afford $85 a month. Additionally, I qualify for the public service forgiveness program. If I pay this amount on time, for ten years, and remain within my field, my loan balance will be forgiven after ten years. With the knowledge that I will have to submit an income statement every year to verify I still qualify for this payment, I am very happy with this deal. I set up an automatic monthly payment and have had no issues since.

My private loans are not eligible to be consolidated. They stand-alone. Now having accrued to roughly $52,000. Still at interest rates of 10-11 percent. I was aware of this information, but still had a positive outlook. I read their emails all the time about income-based plans and how I was probably eligible for them. So, naturally, I called to get one. My monthly payment to them is about $600 a month. I know there are people out there who have payments that well surpass that. I have a house, a car, two kids, two dogs, and a myriad of other bills in my life. $600 is quite honestly, impossible. I had missed my first payment and had another one coming up due to a period of unemployment between when I graduated school/had a baby/ and obtained my job. My loan provider advised that I would have to pay my full balance in order to hear about their payment plans. So, I fell behind on some other things and pulled together $1100 to pay them in full, in order to get on track and get my payment plan in place. I think it is important to note that with that payment only $24 went to my loan principle. The rest was put towards interest and fees.

When I called to give them my income information, they advised that they would also need to include the income of my cosigners, my parents. This was news to me. Therefore, instead of using my low income to calculate how much I could pay, they were actually going to utilize two other incomes as well, to make sure that I actually was not going to receive a reasonable and/or lower payment. I am 31 years old. My parents are not going to pay my monthly bills. In addition, my parents really cannot afford to pay my monthly bills. I explained this to the private loan reps. They said, “Oh well.” I have a feeling they have this conversation a lot. They could not give me a payment any lower than my current one because my parents had co-signed these loans 10 years ago. So, I have to figure out what to do. Paying the full amount isn’t an option. It’s just not there.

When doing my research on how to proceed, I found out that many, many people were having the same struggles that I am. A vast majority of people with private loans with this provider have cosigners. Which means, pretty much no one is getting these lower income-based payment plans that they advertise. There are so many class action lawsuits against them that I cannot even count. The number one way I saw to handle these issues, was to simply not pay. Do not pay the loans, wait for them to sue you over the course of a few years, put away some money in that time, and settle. While my fiancé thought that this was an easy solution, it just does not work for me. I am not the kind of person that can take the stress of not paying a bill. It will hang over me. I won’t sleep. The incessant phone calls all day every day from their collectors are enough to drive anyone insane. I hate to sit idly by and watch my credit score dwindle every month. Additionally, since my parents are cosigners, I have to watch their credit scores- which they have worked very hard to build up over the years- dwindle as well. The loan provider full-well knows that their borrowers are in this position and have very few long-term solutions to offer.

So, I began to take the approach of not paying. Once I did that, I started getting more emails offering me different programs that were previously not mentioned to me. I was advised that I could possibly release my parents as cosigners. My first option was to have them pay off a portion of the loan. Okay, how much? Maybe I could swing some kind of deal with my parents. Perhaps they could pay off 10k in student loan debt instead of throwing me a wedding. The loan rep came back and told me they would need a lump sum for 90% of the loan. LOL. Okay.

Next, I could pay my loans on time for 1 year. Then it would be considered (not definite, just have the possibility of being looked at) that my parents could be released. However, still in the predicament of not being able to pay $600 a month. I spoke with many people who offered me different payment plan options. They were all too expensive for me still, but I was trying to figure out ways to make it work, so that I could even possibly relieve my parents from this burden. I finally spoke to a rep who I believed to be the most helpful and truthful person I’ve talked to there, but also delivered the most discouraging news. He offered me a payment of $250 a month. This sounded doable to me. It would be tight, but I could make it work. However, it would only be for 9 months. Then my payment would go back up to $600 a month. In addition, none of those payments would work towards releasing my parents because it is considered a “hardship” program, and cosigners are not released for people in hardship programs. Worst of all, the length of my loans would be extended permanently, forever unchangeable, from a ten-year pay off, to a twenty-year pay off. So really, they are only helping me out for 9 months cash wise, while screwing me over in the end. They offer no reasonable long-term solutions for people like me. I cannot get a refinance anywhere because these private loans have ruined my credit score. I am 100% stuck with them, with seemingly zero viable solutions for moving forward.

Here is where I sound lazy. I could get a second job. I work full time now at a 9 to 5 schedule that occasionally fluctuates. I could find a waitressing job for evenings and weekends. But, I don’t want to. I have two young children and I want to see them. I’m already away from them 5 days a week from 8:30am to 5:30 pm. I want to be there to have dinner with them. I want to read to them at night. I want to rock them to sleep. I want to go to my daughter’s soccer games. I want to take them to the zoo. I don’t want to spend their childhoods working 24/7 so that I can pay my private student loans.

Here is where I sound entitled. I worked hard to get where I am. I’m not one to shy away from putting in time and effort with many things. If I was making a higher salary and could afford a $600 a month payment, I would not hesitate to pay it. But, the money is not there. Each time I call and go over my income and expenses with my loan provider, we have the same exchange. I say, “I want to pay you, but I can’t afford this payment.” And they say, “Well it seems like you can pay it.” If I used every cent that was leftover from my initial bills and expenses for the month, possibly I could. However, I also have doctor copays and prescription costs, Vet bills, oil changes, registration renewals, after-school program charges and a host of other things I have to pay for each month that they don’t take into consideration. Also, I got an advanced education and work a full time job because there are day- to day- things that I want to be able to do for my family. I want to let my daughter buy pizza with her friends on Fridays at school rather than making her pack lunch. I want her to be able to play soccer and be in dance classes. I want to be able to buy the school picture packages. I want to buy Christmas presents. I want to be able to throw birthday parties. I want to take my kids for ice cream when they ask for it. I drive a ten-year-old used car that always sounds like it’s on its last legs. My cell phone barely works and I have needed a new one for years. I buy second hand clothing for my kids and buy store brand groceries. We got rid of cable. We resist turning our heat on until it’s freezing in the winter and keep our air conditioning off until it’s sweltering in the summer. We have zero savings. I don’t want to be in a position where I can’t afford these basic things, because I have to pay my private student loans. I would be diminishing the quality of my future. I would be paying these loans at exorbitant rates until I am 51 years old. Loans that my parents took out when I was 18. My daughter will have graduated college and I will still be paying my own Undergraduate student loans. How in the world is this ethical or fair?

This company has set up a system that has made it impossible to get out from under them, unless you are wealthy. I know that there are many people who are in the same boat as me. I get it. There are not programs out there for middle class families with a lot of bills. We make too much money to qualify for any kind of low-income programs anywhere. But, we don’t make enough money to actually pay for the cost of living. I cannot wrap my head around the notion of uprooting my entire life for the worse, just so that I can pay this company that is notoriously terrible and recently stated that it has no obligation to have the best interest of the consumer in mind. At the end of what has essentially been a rant here, I still have no solution. All I have are pleads from my parents to figure out a way to avoid destroying their credit, calls every hour on the hour from the loan collectors, and a looming fear of having what few assets I have seized. Having worked the past ten years plus to get to where I am education and career wise, this position is extremely disheartening. I will continue to seek out different avenues to alleviate my situation, but still wonder where it’s going to end up.