Trapped in the student loan game...

[EnviroBat]

I never graduated from college because of the anxiety that borrowing for tuition was causing me. I developed an anxiety disorder for which I was diagnosed earlier this year. I've been paying what I can over the years on these damn student loans, but the balance keeps increasing. It's gone from 36k to 42k as of my last statement. The monthly payment has gone up to a level that is un-affordable for my budget. I contacted them today and they told me that there was simply "nothing they could do". I will have to pay what the want me to pay for many, many years. If not, the will take 10-15% of my take home pay, my tax returns. Who knows? By the time this administration gets through with us, they may have the power to throw me in debtors prison. I feel like my life is no longer mine, but the banks. I can't save a fucking dime for my future, and I'm beginning to feel like this is the way the powers that be want it. There has to be a way to stop this shit. Anyone out there in a similar situation?

[Pavulon]

1. Federal stafford loans

can be placed in forbearance where you will only be paying the interest. This will keep the principal from rising. I would suggest doing that while you come up with a plan on repayment. Beyond that I dont know the options available, but I have used that in the past when changing jobs and it did not hurt my credit.

[Statistical]

2. First of all are they federal loans or private loans?

Just because they are managed by a bank doesn't mean they are not federal loans. Check the paperwork.

If they are federal loans what the bank wants/needs doesn't matter. You file a forebearance for financial hardship and the interest & payments stop for period of time (usually 12 to 18 months). You can also request payment reduction, or spread payments over longer amount of time.

You have options.

Now if they truly are private loans the sad news is you have little to no options. Most people at least a significant portion of their student loans are federal loans.

Once you get the loans under control you can request to consolidate them to "Direct Loans". That means you payments will go directly to the federal government.

[dixiegrrrrl]

3. Get on the net, research what kind of loans you have,

research the rules about collecting on these loans.
Once you have this info, you will feel a lot more in control.

Push comes to shove, see if bankruptcy is an option for you.

The student loan game, as you will find out, is a HUGE scam.
You might be more comfortable walking out of the game.

[grasswire]

4. who is it that you are talking to?

Are you in default? Is the loan in the hands of debt collectors, who will say anything to get you to pay?

Try to learn as much as you can. There are things that can be done to help you pay it down.

If you are diagnosed with an anxiety disorder, can you get some sort of disability?

You don't say how old you are and whether you are able to support your basic living expenses, but there are hardship provisions.

Best of luck to you.

[Travis_0004]

6. Or get on income based repayment

It should knock it down to a reasoanable amount.

Assuming they are federal loans, you could even get a job in the federal government that will forgive your loans after 10 years of repayment.

[aikoaiko]

5. Debt is a drag. No way around that.

Check out you hardship deferment options and also check out the option of finishing your degree at a state school (cheaper tuition and deferred payments). Finishing your degree, if you chose wisely, may lead to more income.

[Traveling_Home]

7. Since you are still able to work, I doubt that your disability would qualify you, BUT

http://www.studentloanborrowerassistance.org/loan-cancellation/disability-and-death/

"There is a discharge program for borrowers who become very seriously disabled after attending school. This total and permanent disability discharge is hard to get, but it is something that you should definitely consider if you have a very severe disability. Although this probably isn’t much consolation, your student loans will also be discharged if you die.

Unfortunately for borrowers, private student loans do not have these protections. You can ask your private lender for relief, but these lenders are not required by law to help you. Some private lender are now offering disability and death discharges. Sallie Mae, for example, announced a total and permanent disabilty program for Smart Option borrowers as well as forgiveness of unpaid balances if a primary borrower dies."

[rox63]

36. A disabled friend got both her federal and private loans dismissed

She is on disability, and was able to get help from legal aid to get her federal loans dismissed. The private loans kept after her for a while, but once she was able to provide proof to them that her federal loans had been dismissed, they ended up leaving her alone and eventually wrote off her private loans.

[paparush]

8. Our son is 15. Ranked 3rd in his class. We've got a small

amt saved (< $20K) and we worry all the time about him not having to go into massive debt to complete his scholastic education.

[EnviroBat]

10. I would have never applied for the loans had I known how aggressively

they come after you later in life. They are legally allowed to harass you and you friends and family. I should have never borrowed from them. I regret it every day.

[SheilaT]

16. It is not necessary to acquire huge debt

just to go to school, and it's unfortunate that so many students and their parents get bamboozled into thinking they should or need to do so.

To start with, if your kid is only 15, I'm hoping he's just a sophomore or junior in h.s., so you have lots of time to research this.

Being 3rd in his class is an empty statistic. How big his class is matters a lot. 3rd of 900 is a completely different than 3rd of 15. Next, actually even before his class rank, come his test scores. I hope he's already taken the PSAT, which, if he does well enough can lead to National Merit Scholarships. Even a National Merit Letter of Commendation, which simply shows you scored in the top 3percent or so, is meaningful. Now come the SATs and the ACT, depending on what part of the country and/or what schools he might be applying to. I suggest taking both. He should also take SAT subject tests, as many as seem reasonable. And take them at the end of the academic year in which he takes the subject: Chemistry in the spring of the year he takes chemistry, and so on.

A lot of people like to trash the SAT exams as relatively meaningless, but since they are national exams, they really are a good marker for how an individual student stacks up against everyone else taking the exam. This is especially true of the subject exams. If your kid got straight A's all the way through four years of high school French, for instance, takes the French SAT and scores a 480, then he really didn't learn a heck of a lot. If your kid takes the biology, chemistry, and physics SATs and scores 770, 780, and 800 respectively, that's a strong science student.

Colleges troll the results and are known to send out scholarship offers to kids who score well on these exams.

The same is true of the AP program. If his school offers AP classes, take whatever ones make the most sense for him. Absolutely make him take the AP exam. If he does well enough, many colleges and universities grant actual college credit for coursework, and it's possible to actually enter college with a semester's worth of credit, saving time and money.

Finally, don't hesitate to look at smaller private colleges and universities. They often offer excellent financial aid to good students. Otherwise, if your kid is simply a decent student with just above average test scores and is going to just an okay high school, has no opportunity to take a single AP class, then give serious thought to starting at the nearby community college. Our community colleges are probably the very best thing about higher education in this country, especially for people without the money or whatever to get into the very top tier of schools. I know, because I've attended a total of six different schools, all public universities or junior colleges, and the junior colleges were the best.

There are so many alternatives to going into serious debt, but parents and students both have to ignore the hype surrounding colleges and their supposed rankings.

Oh, and two excellent books to read, both by a man named Loren Pope are "Colleges That Change Lives" and "Looking Beyond the Ivy League".

[paparush]

20. Thanks for the post.

He's a Sophomore; 3rd out of about 170.

Strict academic and takes all the AP/Honors courses he can.

He just took the PSAT; scored 1380 (70 Math, 68 Comprehension)

We've been talking about scholarships since he was in the 7th grade.

He plays soccer and tennis and participates in several clubs. We're encouraging him to start a club and find a volunteer opportunity.

[SheilaT]

21. Excellent.

Now have him get started on the SAT 2 tests. The example I cited for the science scores were actually what my older son did. I know his PSAT was good enough for a Letter of Commendation. He got a couple of scholarship offers totally out of the blue from some smaller colleges, for whom he would have been quite a catch.

The younger son, who didn't do quite as well on the standardized tests, got offered scholarship money at two schools he'd been accepted by, even though we hadn't filled out the FAFSA, hadn't applied for anything. I was completely astonished. But once you get outside the Ivy League and the top 50 or 100 most competitive colleges, there are a lot of really good schools who are willing to give scholarship money -- by which I mean merit aid -- to a lot of kids. Lots of states offer deals to instate kids with decent grades, just to keep them in state.

What a lot of people don't fully understand is that there really are a lot of good schools out there, including a lot you may never have heard of. Rarely is there just one perfect school for a given kid. It also matters what general academic direction a student thinks he'll go in. But the vast majority of students change majors, sometimes more than once. I'm always telling young people to major in what they want to major in, keeping in mind that in the end they need to go out and earn a living, so they may need to minor in something "practical".

If you want, PM me. I loved doing all this with my own two sons, and I enjoy passing information on to others.

[cbdo2007]

24. Good response. MOST of the people who think they are "trapped" in student loan debt...

probably never should have gone to college in the first place because they couldn't afford it and didn't think any of it through.

Look through any of these stories and it's the same thing, they applied to expensive schools and got accepted so they went wherever they were accepted rather than where they could afford. An acceptance letter from a school does NOT mean it is in their price range. That is for the student and their parents to figure out.

[JVS]

35. I avoided debt by taking an academic scholarship.

If the kid does well on his PSATs and has good grades, there might be money out there for him.

[bemildred]

9. Yes, it starts you right off in life in debt bondage.

One of the most pernicious changes in higher education in my lifetime is the prevalence of this sort of extortionate "financial aid".

[EnviroBat]

11. extortionate "financial aid"

that's EXACTLY what it is. Had I known the effect it would have on my life later, I would have never signed the devil's application.

[Pavulon]

12. Stafford covers up to 250k, my wife's were at 4%

cheapest money I (we) ever borrowed.

[Statistical]

29. Exactly. When you consider it is tax deductible the post tax impact is even less.

4% tax deductible (in 25% federal, 5% state brackets) would be comparable to 2.8% non-deductible interest.

I am slowly (minimum payments) paying down mine & my wifes loans (consolidated at 4.75%). Why would it pay it off faster. If I can earn > 3.325% on investments it is cheaper to put extra money towards that (or paying off other debts).

Hell even if I maxed out 401K & IRA, and paid off all short term debt, I would put extra principle towards my mortgage rather than "pay down" student loans.

[taught_me_patience]

13. What kind of loan do you have?

Federal or private?
What is the interest rate?
What is your ammortization schedule?
How much per month do you pay on the loan?
What is your credit rating?
What do you do for a living? What is your monthly income?

If you can give more specifics, I can help you. My wife and I have 190k in student loans.

[EstimatedProphet]

14. I have the same thing going on

My loans went into default WHILE I WAS STILL IN SCHOOL. And their response was that I should just quit and get a job to pay them off (which I didn't do). Now it's 15 years later, and I'm still paying for them, and I owe more on them than I did before I started paying them off. They are nothing more than a program to legally implement indentured servitude.

[coalition_unwilling]

26. What makes it doubly cruel is the lies with which they were peddled. As in,

borrowing to fiannce higher education is a good investment that will more than pay for itself. One of my staff at my most recent job was having her bi-weekly check garnished for 25% of her gross pay! Her crime: when she was 19, she bought into the myth that she needed to get a technical certificate\degree to get a better job. She took out about $40K in student loans to finance the 2-year course. But when she graduated in 2007, the only jobs she could find paid barely more than the minimum wage.

I was so pissed off when I found out about this that I wrote my Rep Diane Watson a letter of protest. Watson is on her way out and never replied.

It really is a crime what these student loan providers are allowed to do to our youth. "Indentured servitude" is the closest thing I can think of to it and that was made illegal a long time ago.

[teenagebambam]

15. Between my partner and i

Our loan payments are more than a mortgage-or were, until we lost our house. We will never be done paying them off.

[conspirator]

17. It's the new form of slavery. Either you sign for an unpayable loan or you join the military

and they pay your studies, if ... you return back alive and with no PTSD.

[Smashcut]

18. Try $150K+ worth of debt, thanks to graduate school

Which was supposed to be compensated by increased income, but instead my income has actually decreased thanks to the economy.

No way to ease the burden, ever. It's almost hard to believe that the laws governing student loans, which can't even be discharged in bankruptcy and in some cases, death (!), could even be Constitutional. Banks get trillions in bailouts, we get the screws tightened on our shackles.

So yeah, I'm right there with you. Saving for my future? What a laugh. Buying a home? Not for a very long time, if ever. I've already got a mortgage, except it's a mortgage on my LIFE. What a mistake...

[Liberal_in_LA]

19. k&r

[cbdo2007]

22. Sounds like you bit off way more than you could chew. We need to teach

kids going to college these days to go to reasonable schools with a reasonable tuition if they can't afford it, not just spend and spend away for a job that may or may not be able to get.

Some people just aren't meant to go to college because they cannot handle the responsibility. Those people should find other means of income that do not include college and just do their best that way.

I had many options when leaving home to go to college. One was going out of state for $15,000 tuition per year, another was our state university that was $10,000 per year, and one was a smaller state school for $5,000 per year. I went to the smaller in state school for $5,000 and probably have the same job I would have gotten going to either of those other schools so I was able to pay my loans off in just 8 years rather than 20.

[northernlights]

25. wow. your compassion is underwhelming

I have a young co-student with way over his head in debt. He is brilliant -- 4.0 honors in pre-med sciences. But to your way of thinking, he shouldn't have gone to college. How dare he have parents that gave him shitty advice. And school advisors that deliberately lie and misled. (I know, because I caught one of the school advisors in half a dozen blatant lies in a row to me. The first lies -- by omission -- were not public information so could not be verified. Not that I thought for a moment that an academic advisor would deliberately lie. I have since met other victims of the same fucking lie that evil witch spreads. All to increase enrollment, and too fucking bad for the losers who believed her. Obviously they didn't belong in school to begin with, so I guess they deserve exactly what they got. :eyes:)

[cbdo2007]

30. I didn't say no one should go to college who can't afford it.

Or if I did say that then I was mistaken. It's different for everyone in every situation.

If your son graduates and gets a job in a good field, then good he'll be able to pay off his student loans in no time. If he drops out for whatever reason, then he is exactly what I am talking about.

Here's my point - people have to be REASONABLE with their expectations of what they'll get out of college for what they are paying. If you're going to a local state school and working at home to get a job as an accountant - sure, you're going to have no problem finding a job, you are trying not to spend an unreasonable amount of money doing it, and it's all going to work out for you as planned.

If you go to a fancy school in another state to get a Photography degree for $40,000 year tuition, you're going to be in a student loan debt prison because most likely you're not going to make enough to be able to pay back your loans. You should have gone somewhere cheaper, closer to home, and started more slowly.

Sounds like your son is being reasonable. I was reasonable when I went to school, now I have a reasonable job making a reasonable income. MOST people are not realistic in their expectations.

[northernlights]

34. he's not my son. he's a CO-student. as in, we're both students in the same program

And I didn't have the heart to tell him that the normal salary in our field (medical lab technology) does not pay a high enough salary to justify the amount of student loans he's been suckered into, since its too late.

He'll have to be getting the very top level salary, which requires years of experience, an advanced degree (more loans), and being at a top hospital, not in a backwoods.

It also doesn't justify the amount of loans I was suckered into at my stage in life. I should be have able to complete the program with zero to minimum loans. I was lied to repeatedly and as a result it took me longer to complete the pre-requisites than I planned for. No way forward, no way back. So I'm ruined financially. My retirement savings wiped out by unemployment, unable to sell my house -- whereas if I'd dumped it back on 07-08 like I'd originally planned, would have re-schooled for cash. And large student loans I hadn't planned on but needed just to get through this mess. With hospitals now laying off instead of hiring. But I guess that makes me irresponsible and stupid too. I should have just tried to get by on the occasional minimum wage job...:eyes:

And you wrote:

"Some people just aren't meant to go to college because they cannot handle the responsibility. Those people should find other means of income that do not include college and just do their best that way."

[EstimatedProphet]

28. You're right. The world needs ditch-diggers too.

[badtoworse]

37. Thank you, Judge Smails!

[dionysus]

23. yes, obama will personally bring back debtors prisons, and throw you in one.

jesus christ.

[IndyPragmatist]

32. college advisors are not your friends

I went to an out of state school originally because I was given a pretty nice scholarship through a private company that covered almost all my expenses. I could reapply for the scholarship each year, and because of my qualifications, it was pretty likely that I would get it each year. But, as luck would have it, that company filed for bankruptcy my freshman year. I was still able to get the first year's scholarship, but they obviously couldnt afford to keep their scholarship program going.

When I got to college, I thought I could count on advisors to lead me in the right direction. Oh how wrong was I. What at first seemed to be understanding about not tying yourself down to a major too quickly, turned out to be an attempt to get me to take as many classes as possible that wouldn't count towards my degree. I was told that 12 credit hours is the most you should take each semester, and spreading college out over 5 or more years is perfectly fine. I informed her that I could not afford to just hang around campus for a few extra years, I was there to get a degree (and have some fun while doing it) and get out.

Well, I decided that since I couldn't get as much money from scholarships, it was in my best interest to go to an in-state school. So I transferred back, only to meet yet another advisor who seemed to do everything she could to try and convince me to stay in college as long as possible. I still had to take out a few loans. I made a mistake and needed money quickly to pay off a college course that I took when I was in high school that I forgot about. So, for some strange reason, I went back to the advisor. Who then told me that in order to be able to register for classes that semester, I needed to pay off the $1,200 debt from before. Well, it was 2 weeks before classes started, and federal loans can take quite a long time to get paid on. So, she told me to take a private loan because I could have the check within a week. Yes, she was right. I went from applying to a check in 8 days. This was a 13,000 loan for the entire year.


Well, by the time I was ready to graduate. My senior seminar didnt work into my schedule. So I had to push that class back a semester, causing me to drop to 9 credits that spring. Well, Chase bank decided that since I only took 3 classes, I could start paying back my loan. Waiting tables didn't make a whole lot of money for me, and of course, I still had bills to pay. Chase decided that because I dropped below full-time before graduation, that my grace period was waived. I made payments when I could, but I couldnt do every month. I would usually give them 2 payments every 3 months, which really hurt me financially at the time.

that wasnt enough. They began calling my grandmother (my cosigner) between 5 and 10 times a day. They send fake subpoenas to me and my grandmother that were exactly like any other subpoena except for in tiny tiny writing on the last page read "this is not a legal document and should not be considered to be so."


I made a mistake and should have stayed with a federal loan. But my helpful advisor convinced me that private was the way to go. What great help she was.

[Leftist Agitator]

27. Emigrate to another country.

You won't have to pay another dime.

[EnviroBat]

33. Believe me, I've thought about that.

I've been told that the debt can follow you though.

[hunter]

31. Student loans and medical bills taught me not to care.

It's only money. If you don't got it, don't pay.

I'm even nice to bill collectors these days. They used to make me miserable.

If the bill collectors are truly miserable people who enjoy making other people miserable then it freaks them out to talk to someone who cheerfully doesn't give a damn any more.

Don't let these machine generated anxieties live in your head. The dollars are merely bytes in a computer database, nothing more than a score keeping mechanism in a game biased against you. But that game is not your life and your life is not the game unless you make it so.

Don't like the game? Throw it out of your head and live your own life and choose your own direction.