It's a good thing I wasn't planning to have any children, because I already have a mouth to feed: a brat named Sallie Mae. She was a mistake.
--my Facebook status a few days ago
Everyone makes mistakes. Some are more expensive than others. My mistake is currently accruing 13.25% interest, a loan for an "investment" that never paid off. Before you say "I told you so," before you call me a "whiner," let's rewind the story to see how I got here.
It was fall 2003. Two years had passed since I graduated from college. And a little over a year had gone by since I dropped out of graduate school for an MFA in fiction writing because I had writer's block. I could not find a good job because of the recession, so I was working in retail with a lot of other college-educated young women.
People who were close to me did not hesitate to tell me how disappointed they were with me, and I felt like a failure. I sucked at sales and never made much on commissions, and it seemed like no one would hire me to do anything else. On the rare occasions that people I'd known in college would shop in the department store where I worked, I wanted to hide in the stock room. I felt so ashamed of what had become of my life. My disappointed family members suggested I go back to school.
I still had writer's block, so returning to the MFA program was not an option. Law school and business school never appealed to me, and I had spent enough time in core courses I didn't want to take as an undergraduate to know how badly I do in classes that bore me to tears. And since the age of 17 I was a C average math and science student. But I had another idea. I had been watching HGTV a lot and thought I could put my creativity to use in a career in interior design. Wouldn't it be nice to get out of my dead-end retail job and do something I could feel good about?
I contacted two local schools about their interior design programs, and Harrington was the one that followed up with me. I thought I had done my research. I looked at the starting salaries of designers, looked at Monster.com and CareerBuilder to see what kinds of jobs were available, talked to a designer about it. Yes, it all seemed like a logical, sensible plan. My B.A. in Humanities was useless, it seemed, so I should study something practical. Well, at least I thought interior design would be practical.
What I did next was stupid, stupid, stupid, stupid, stupid.
I went to the financial aid office and applied for loans.
Little did I know that Career Education Corporation, the big company that had recently acquired Harrington, was in bed with Sallie Mae. I'd borrowed money for school before, but these were Federal Direct Loans with fixed interest rates, reasonable terms, and numerous repayment options. But did I get Federal Direct Loans for design school? Of course not. Why offer them when you are getting kickbacks from the Great Satan of all lenders? So I ended up with private loans, Sallie Mae Signature Loans, which I have recently learned are sub-prime student loans.
Now, much to my chagrin, I see that the terms are not negotiable, I cannot get forbearance, and they do not participate in any of the loan forgiveness programs. Oh, and did I mention that while they were in deferment when I went back to school to study art since my design degree didn't get me out of retail hell, they tacked on another $20,000 in interest? Isn't that wonderful? Another splendid thing about my private loans is that the number of in-school deferments is limited to 48 months, 31 of which I used already, so that last-resort plan of becoming a permanent part-time student is not even an option anymore.
I think it's great that the Income Based Repayment option is now open to everyone with a federal loan, and that they also have forgiveness for those who work in the public sector. But these private loans are another story. They are a fiscal abomination, a financial monster that cannot be killed. I'd have been better off paying for design school with credit cards; at least they'll work out a fair payment plan with you.
But Sallie Mae? "Fair" is a word that is meaningless to them, and they won't take "no" for an answer. They are legalized loan sharks. You know what they told me when I tried to negotiate? They said to get a second job. A second job in this crappy job market! I am doing good I even have a full-time job at all, even though it's not in my field. These recalcitrant leeches are about as willing to negotiate as Michael Clayton.
And I am not alone in this. As I searched the internet for insight into this quagmire, I came across many, many, many stories of other graduates who are also in dire straits thanks to student loan debt:
My student loan debt has kept me from doing everything meaningful I've wanted with my life, other than my relationship with my husband (also drowning in student loan debt, if my parents hadn't paid for our wedding after 8 years we still wouldn't be married).
I worked so hard through my entire education, I earned a 3.9 GPA in graduate school. After I graduated, I continued to work hard, working 2 jobs to try to afford all our bills. Finally I was offered my dream job, (the whole reason I got myself into this debt), as a professor, but I had to turn it down because it just didn't pay enough. Now I've been in a job I hate for 3 years, making only 30k/year (I've looked for something that pays better but it just doesn't seem to exist), and the only other thing I want aside from my dream job is to have a child. But I know we'll never be able to afford it.
I really wish that we could use "defective products" law against financial products somehow, because what Sallie Mae and being forced to quit college and go into massive debt has done to me in shoving me "off the grid" has been worse than a physical accident in some instances.
Let me add too, that some fines for criminal behavior are dischargeable in bankruptcy, provided certain conditions are met. Why treat student loan borrowers worse than criminals? Unless I’m mistaken, higher education is good for society in general. Creating a permanent class of indentured servants is not.
— Brian Galloway
I live in an apartment. 710 square feet of which is shared with my husband who dropped out of college with minimal debt, and is holding down a nice little job as a security guard. We have been married for a year now, and I am almost 31. I probably won't ever have children. Five years from now, unless I can find a way to pay a substantial amount, I will still be $100,000 in debt due to interest, I will be 36, and my biological clock will be running out unless I want to have kids while in my forties that won't be out of the crapshack until I am of retirement age.
Having no job and lots of debt means no house. No mortgage is possible. It also means no desperately needed second car. It also means that the cars we buy have to be under $2000. This also means no health insurance. On only one small salary, we don't make enough to make the payments even on the company policy that is offered to my husband.
Essentially it boils down to the death of the American Dream. No House,no car in no driveway, no kids, no money, no health, no life, nothing left to bury us, and every debt left to our nonexistent survivors.
I used to have five year plans, but not anymore.
I am upwards of $50,000 in debt for an IN-STATE four year, undergraduate degree. I do not earn any more money than individuals without a degree. At a rate of $200.00 dollars per month which will increase to close to $400.00 a month towards the end of my payment plan, I will have finally paid off my loans when I am 56 years old to the tune of $80,000!!!!
With all these people coming out of college with student loans, this is bound to have a negative effect on entrepreneurship, since students need a reliable, stable job to pay off the huge loans they have. This in turn slows overall economic growth. Corporate capitalists destroying small-business capitalism.
I am not asking taxpayers to bail me out. I am asking for regulation and restructuring of the student loan system.
I want to pay, I want to be free, They don’t make it easy.
H.R. 5043, the "Private Student Loan Bankruptcy Fairness Act of 2010." The idea of filing bankruptcy makes my skin crawl, but I think if private student loan lenders knew we had the option of getting our debts with them discharged, they'd be more willing to treat us with the same equality that we would get if we had borrowed money to finance a home, small business, car, or consumer goods. Most of us are not looking for a handout. We just don't want to be treated as private lenders' indentured servants.
The other day I said on Facebook, not without a note of false bravado, that I am "not going to pick up a second job just to appease the morons at Sallie Mae." But the ugly truth is that I may not have a choice in the matter. And if working 7 days a week is the only way I can feed the monster, that means there will be no new paintings and no new interior designs, because when will I even have time for that? I was really thinking that now that I have my good day job I'd be able to get a little studio and keep on painting, but if Sallie Mae gets their way, there aren't going to be any new paintings for a long, long time.
So I hope H.R. 5043 passes, or else that a miracle happens and I get $65,000 I can pay those parasites before it's too late.
I feel like it already is.
And this will affect more than just the graduates who took out these loans. The private student loan mess could be the next big bubble to burst.
Blind-Sided at Sallie Mae?
Pilfered Dreams: The Story of Student Loans and Sallie Mae
Student Loan Sinkhole?
College grad: ‘I wish I’d gone to prison instead
The Subprime Student Loan Racket
For-profit colleges prosper from student loans
Student Aid Reform, Still More Needs to be Done
Commentary: A Plea to Add Consumer Protections to Student Loans
Americans for Fairness in Lending
Student Loan Justice
Forgive Student Loan Debt to Stimulate the Economy