02.08.08 | Private student loan bankruptcy protection denied
Private student loan bankruptcy protection denied
In the Higher Education Act Reauthorization (HR 4137) currently moving through Congress, an amendment by Representative Davis of Illinois would have extended some bankruptcy protection to students holding private student loans. Unfortunately for students, the amendment was voted down after strong opposition from banks and financial institutions.
The argument against the bankruptcy protection amendment was that its inclusion would ultimately make private student loans more expensive as lenders would need to increase rates and fees to cover loans that were in default and discharged in bankruptcy.
The Financial Aid Podcast has also done an analysis piece on this legislation.
The short version? For now, private student loan consolidation remains the best avenue for making private student loans more affordable.
Well, what are recent grads to do when, we don’t make enough money at our first and or second job to pay our cost of living plus our loan payments? What are we to do if we can’t consolidate because we don’t have a co-signer? Government is helping home owners and all the foreclosure cases, what solution is there for us? Living in debt, wanting to do better for ourselves, but are stuck in a big financial situation.
February 24th, 2008 | #
Depressing. Many people don’t not know the difference between private loans and student loans that are government guranteed. Private loans are far too easy to get. They should be dischargable in court just like any other type of loan. And the “powers that be” wonder why we are approaching a recession. Everyone is over burdened with debt, and companies aren’t paying grads what we need to live AND pay our debt. I’m starting to think my education was a waste. I came out of school burried in debt just to make the same amount as someone who didn’t go to school and has no debt. Depressing!!!
February 25th, 2008 | #
I agree! I think to myself everyday that college was a mistake. You are right in saying that companies don’t pay grads enough money, and my friends that didn’t go to college, make more, based on experience, that I don’t have, going to college, and they don’t have the debt for the student loans, so in all reality, they are doing better than me. I will be sure to pass on to my children, that college isn’t always the best answer to your finances, sometimes its the worst.
February 29th, 2008 | #
This is why it is important to go to the polls and vote this election year. Many students are unaware of the fact that Wm. Jefferson Clinton signed the bill into law, October 1998, forbidding people from discharging their student loans in bankruptcy. However, for many of us, student loans destroy our credit ratings, which causes many problems when trying to find housing to rent, let alone buy.
I wish the candidates would debate student loans and the bankruptcy laws. I wonder how Sen. Clinton would combat supporting her husband on this one.
March 2nd, 2008 | #
I agree. I relocated after college to another state to take a job, that didn’t work out. I went back back to school getting an additional 15,000 private loan on top of my 20,000 federal loan. The tech school I went to promised a job placement and internship. They basically lied. Now, I have all these certs, in addition to my degree, can’t get a job anywhere in the us, and am over 40,000 in debt. The tech school and the lender were in cahoots, and now i have high interest rate on my private loan and can’t pay! My friends who didn’t go to college all have decent paying jobs. think twice before going to college and accruing debt unless it is the healthcare field! What do I do now.
March 2nd, 2008 | #
I thought I was doing a great thing by completing my education and holding a master’s degree. I now owe more in student loans than my house payment. Where are we headed when to attend college could cost you more than buying a house. The deception comes in when we’re told, these degrees with give us greater earning power, I have yet to see it materialize. When are the Feds going to step in and lower the interest rates for borrowers who have consolidated and the payments are still causing a hardship.
March 3rd, 2008 | #
I don’t know that bankruptcy is the answer, but what about the inflammatory interest rates & interest they post each year to your private loan. We had no clue the difference between federal & private loans - or rather that there is a difference. My son’s first year loans of $27000 are now $44000! Hello! They need to make the banks remove that interest & just charge the interest as payments are made. The government is helping people who overextending on house payments - where are they helping in these situations? I actually had a nasty Chase person on my phone indicating if we lose our house that’s our problem………..Nice.
March 3rd, 2008 | #
Yeah its crazy. I graduated a year ago from a private art school in Pasadena Ca. I owe around 180k in loans, most of them are private loans. Tuition was 45k a year when I graduated. I am lucky enough to have found a job thats art related but my payments are a bit over 1700 a month. Thats more than half of what I make a month. It almost seems better that I just don’t pay them off but I would like to take care of this mess I got in.
March 19th, 2008 | #
I fully agree. I attended GA Tech for engineering, hoping to be able to afford to live after graduating. Forget it, even with the 4% loans. I can not afford the cost of living, insurance, and pay my student loans. And Hillary Clinton wants to tax us extra if we don’t get health insurance. I guess its all us students fault the economy is failing. Obama’s Rev. is right, G** D*** America, or at least the powers that be.
March 20th, 2008 | #
I filed bankruptcy in 2000. I also have a huge student loan debt and all my student loans are in forbearance except one. I have an attorney too. I know student loans are not dismissable in a bankruptcy. What I dont understand is why this one loan claiming to be a private loan and protected by bankruptcy is not in forebearance with the others. I underwent 2 natural disasters and left school. These people are trying to sue me. There is a natural disaster act which protects me but there are no attorneys who know how to validate those laws…does anyone know an attorney to validate those laws.
March 26th, 2008 | #
I live in Puerto Rico (for those of you who dont know, its a US Common Wealth island in the caribbean). We have the same laws concerning bankruptcy, and I agree. If the private student loan industry is protected from bankruptcy, then they are basically “risk free”. So why are they permitted to have so high interest rates? Congress is helping everbody else but us. No wonder why the economy is in recession. These loans are gonna follow me to the grave i’m sure of that!
April 2nd, 2008 | #
I am so glad to hear that other people are in the same situation I am in. i thought I was all alone. It still stinks that we are here though.
I grew up poor, and all my childhood my single-mother pushed how important a college education was, and that it would make my future happier, so we took out loans to get me through college. I went to a STATE school, but it was still about $30,000 with costs of living. I made it into graduate school and my loans totaled over $150,000, with interest, three after graduation, I am at over $180,000 and growing. The problem is that the promise society made me when I was younger, that if I got an education I’d make more money, has turned out to be a lie. I’m now over qualified to work in an office, but not enough experience to get a job in my field - turns out I have to intern 2 years in NYC, with no income, to get the experience I need to get a job that will only pay $25,000/year to start, and maybe $35,000 after 10 years. So I work in retail and make $18,000/year and hate my life more and more every day, as I default on my student loans and struggle to not end up homeless each month.
April 2nd, 2008 | #
WOW, after reading these posts, I am glad to find company in my misery… I am looking at 54K in loans and I haven’t finished paying yet for my masters, which happens to be in a field that will never make much money. Yipe. I do feel that perhaps going to college is not always the best way to have more earning potential, especially in today’s world where it’s not always what you know, it’s WHO you know and who is willing to give you a job. It makes me SO mad and frustrated that I will be paying for the next 25 years on this loan, and people who don’t go to college make the same or more as me, and will never have to pay a dime for an education that obviously wasn’t necessary to get them where they are.
April 9th, 2008 | #
It is somehow comforting to read these posts from people in similar situations. I have almost $100,000 in private student loan debt after a Master’s program. Federal loans were not available at my school so consolidation offers don’t work for me. The “dirty little secret” at my school was that many students are not able to earn much after graduation. I have already used up all the forbearances and now must confront the fact that I simply cannot make the payments of $764/month. A dear friend cosigned 2 of my 5 loans. He has been downsized and is now unemployed. How can I let them come after him if I default? I am searching for info from bankruptcy attorneys because I have been told they are the ones with the most expertise in student loans. I already went bankrupt several years ago but the student loans were not included. What a trap! Interesting to read people who mention how friends without as much education make equal money or better. I am seeing that as well. My profession requires a lot of overhead with insurance, license renewals, continuing education and supplies, on top of the loan payments - yet a hairdresser charges more for his services than I can.
April 11th, 2008 | #
I agree that there should be better disclosures when granting students privately funded loans. These disclosures should include what the payments will be too (if they do not already). We all have to look in the mirror though and realize that no one had a gun to our head to sign the promise to repay. I also agree it is hard to get a job even if one has a master’s degree and little or no work experience because real life experience is what really counts…I learned more in my first year of work than I did in 4 years of college. But not having a degree over one’s lifetime will limit pay more than having one…almost guaranteed. I am 40 and have a few comments to the above blogs: The fact is most student loans are being repaid otherwise private lenders would not be funding them…otherwise they would be out of business. Second, just because loans cannot be wiped out in bankruptcy doesn’t make them risk free - the lender’s sell them to credit collection agencies for huge discounts/losses and many will never get collected. Third, as far as going to private school and paying $45K per year…that is an individual choice…could have chosen to go to public school and paid far less…maybe with no debt. Lastly, if after getting a master’s degree you cannot make what a hairdresser makes, then consider changing careers. In many cases, I have friends who ended up working in fields totally unrelated to their degree. But having a degree in something got them a job. FYI - Stay hopeful, the economy will eventually get better, when I graduated only 20% of college grads got jobs in their field (1991). I am old but in 1980 the prime rate was 21% and we survived that too. Good luck out there.
April 16th, 2008 | #
I graduated school back in 2003 and at the time my tuition was about 25K a year. I went to school because I was brainwashed into believing that it was the only way to get ahead in this world. Upon arriving in school I ate up every word they were spoon feeding me. After graduating I found that the evil Sallie Mae was adjusting my interest rate as well as leaving me no options to afford the payment they wanted. I mean who can afford $1,000 a month on top of housing, auto payments and living expenses. I tried the negotiations route but was turned away every time.
I regret going to school everyday and wish that the government would step in and reverse the bankruptcy laws to allow us to wipe the slate clean and start fresh. Instead it seems that they (Government) would rather have a generation of people drowning in debt with their lives ruined for doing what they thought was right. I can’t even get a job because it seems that I am a criminal because that is how I am looked it because of my credit scores. What are we to do? I say screw it and screw all of them and don’t pay my Sallie Mae Loans. I can’t afford to anyways so WHATEVER!!!!
April 17th, 2008 | #
But what is the answer to all of our concerns??? Where can we go for help???
April 18th, 2008 | #
Thank goodness I am not alone out there. I dropped out of school over 10 years ago because I simply could not afford to attend any more. Now, as a single mother making $25,000 per year, I don’t have any disposable income to pay back these loans, as much as I wish to. Do you think these lenders care? Not at all. These lenders prey on the young, naive 18-year-old fresh out of high school, who thinks that attending college is the answer to a successful life. Ten years later, that young 18-year-old is struggling to make ends meet and the lenders are coming after her with a federal wage garnishment, which will literally take food out of the mouth of her 3-year-old daughter. Where’s the justice in that? Is there any help out there?
April 22nd, 2008 | #
After graduating with a culinary/hospitality degree (an education which required a principle balance of $74,000; but is now nearing $100,000 after interest) I’ve found that there’s just no way to make the $1200 monthly payments working in this industry. As a result, I’m taking a preverbial crap shoot–adding to my student loans by returning to school and finishing a business degree, then law school in hopes of making a wage appropriate to my debt. Success or bust so to speak. I just turned 22 and already feel that my life has been ruined financially, and see no other way out short of the lottery.
April 28th, 2008 | #
My son graduated from culinary school with $32,000 in private student loans. Three years later he has a girlfriend,a child, and a $40,000 debt with a 15% interst rate! He gets nasty calls from Sallie Mae but he can’t even begin to pay back the debt. I’m going to contact my senator and see if he even knows about this situation.
May 1st, 2008 | #
I kind of feel like I found a support group of sorts on here. I too am in the same boat as many of you. Less than an hour ago I wiped away my last tear of rage and helplessness. I am over 120 grand in student loan debt and cannot possibly make my monthly payments. I just applied for a private loan consolidation, with a co-signer, and got denied in 2 minutes whereas it took me about 45 minutes to complete the application and acquire the needed information. I am beyond frustrated. I too feel like my education was an absolute waste and I seriously would have been better off had I pursued my pipe dreams rather than being practical and getting an education. In two weeks I will have completed my masters program and of course I already got both my bills for my federal and private alternative loans. These banks are like satanic stalkers and they truly have destroyed my life and will continue to deplete any happiness or freedom I dare seek to obtain. I cannot find a way out. And I am not looking for a handout, rather, I am seeking a simple hand up. I have spent countless hours researching both ways to pay off my debt and ways to supplement my income. Like thousands of others, I am a teacher who isn’t teaching simply because my chosen field of focus (English, grades 7-12) is not of high need. I am sick of people saying “oh, but isn’t there a teacher shortage?? I cannot understand why you cannot find work”. Well there is a teacher shortage in the areas of math, science, second languages, and special education but there is an overabundance of English and Social Studies teachers. PLus, not everyone is fit to work in crime-ridden areas, commute 3 hours a day, or any of the variety of reasons that make some schools less desirable to step foot in.
ANyway, I am glad I can rant on here, as I am so ANGRY with this situation. I often wish I was born in another country where they care enough about their citizens that they educate them and provide health care.
Currently I am substitute teaching and with other living expenses and bills it is not humanly possible, even now that I took on a lot of tutoring after work, not possible in the least to pay my loans. What is so awful is that my family members co-signed some loans and they are liable for them if I default. I do not want my aunt and uncle to have a lien on their home or my brother who is trying to buy a home to have to have MY BURDEN. I am at a loss here. I cannot even imagine what I will do over the summer when there is no substitute teaching. Basically I am screwed unless I magically win the lotto or someone rich fellow takes pity on my poor soul and makes a donation to my pathetic cause.
What can we do?? It is amazing that so many of us are in this situation and no one cares and no one can help. Lovely corporate America and our Fascist system.
I just about had enough. Too bad it is so difficult obtaining a work visa in another nation…
May 1st, 2008 | #
I am about to default on my consolidated student loans and was looking for ways to limit the amount of “punishment” that is bound to follow. Such as, will the collectors get into my joint account with my husband? Will they get our tax refunds if we file together? (the answer is yes to that!) Will my social security be affected? I have no cosigner on my consolidated student loans, but do on my separate student loans … does that mean they can come after cosigners on those? I filed bankruptcy Chptr 7 in 1998, was a single mom with a handicapped child, no child support payments, few assets, went to graduate school to get a Masters in Public Affairs. Now the government and its representatives repulse me and I am overqualified for many positions, plus haven’t found a decent-paying job after being laid-off during a company closing. My payments start 5/7/08 at approximately $800/month at 8%, which seems like a high rate to pay. I am resigned to the fact that I can’t get out of this, so am looking at how to limit the repercussions. My husband says I will become an “unperson” financially, but I disagree. I’ll learn, adapt, and reinvent myself, as I have many times before. Now I wonder what the stats are on the percentage of students who are defaulting, esp in the last 5 years. I’m a survivor but it hurts my p[ride to realize there is no way I can ever repay. Most is interest! And my degree is a crock! Its always been who you know, who your daddy is, but I refused to accept that. Maybe its time to rethink the whole American dream. My son is in his 2nd year of college and getting loans is so easy for him. He gets multiple card offers and has a high score, but he’s never worked more than 6 weeks at a burger-joint. Corporate greed is draining us of our best minds and creativity by overburdening its citizens. And I’d like to pay back too…. but my options have run dry.
May 5th, 2008 | #
Don’t worry, my debt is in 6 figures, you guys with half that will be fine. I had no debt before choosing to go to law school, and now if I can even get a job it’ll be doing something I hate. Higher education is an absolute scam, once again the rich (lenders and schools) benefit by praying on the stupid middle and lower classes. Bill Gates drops out of College, but every idiot thinks a college degree makes them starter and entitles them to a good future.
May 5th, 2008 | #
if anybody has any advice please email me. I feel so depressed. I had my son get student loans with the promise that once he completed college I would mortgage my home which would be paid for by the time he graduated. Well, due to circumstances that were beyond my control our home is paid for but has a lein on it due to a tax problem created from a dishonest employee we had at the time. My son is in the mortgage business and is now only making minimum wage because none of his clients can get approved. There is no way he can make the $1700 a month payment. And of course his credit rating has been shot!! I don’t know what to do and I feel horrible that I put my son in this situation.
May 7th, 2008 | #
Oh boy! I thought I was all alone in this boat.
I graduated in 1983 here it is 2008 and I am no closer to paying off my student loan than I was before. I make monthly payments (which were reduced due to hardship) and my balance goes up every month.
I am in the process of forming a group (Students Against Department of Education)(?) I have 150 people signed up already. when the number gets high enough, we are going to lobby washington. I find it henious that our government can forgive TRILLIONS in aid to foriegn contries, (which was OUR tax money) and give BILLIONS to ILLEGAL aliens, but do NOTHING zilch, nada, for victims of the DOE’s shady business practices. we WILL have a voice soon. and they WILL hear it.
I will post contact information as soon as it is available.
May 9th, 2008 | #
Every student out there that had to get student loans are screwed. We will be paying off more debt than anyone, forget owning a house and cars, and having a good life.They need to reduce the cost of education and reduce the intrest on these loans.Why is it that it cost so much to go to college anyway? By the time I get my loans paid off It will be time for me to retire.So it looks like I get to miss out on life,These companies dont pay squat,not enough to pay for student loans and a house and cars and nice things, oh forget about having kids you wont be able to afford any.Our system today is so screwed up, We all at the same time should just quit, quit paying on these loans.
May 11th, 2008 | #
I feel like a door mat to all these Banks and schools and the Gov. and corprations. It just is not fair.Why should I even bother with my education if I dont get anything out of it but eye popping debt.There is just to many hands in the cookie jar, and I hope they choke on them.
May 11th, 2008 | #
I am in a similar situation as most who comment on this board, but I have also come to realize that no one made me get into the amount of debt I am in.
I am really starting to hate the argument that “other countries” allow students free health care and schooling. It might help to know that “other countries” many in Europe, but also in many other parts of the world require young people (sometimes just men, sometimes men and women) to do MANDATORY military service or community service.
If any of us would have done either one (Americorps, US military) then we would have had help for school payments. Please don’t fall into the ignorant trap of thinking that other people are getting off easier than you. It makes you sound like a moron- and all the college in the world can’t get you out of that one. How about studying something that will get you a job? How about working your ass off and taking two jobs while you were in school? Too many college students sign paperwork they don’t understand and then burst into tears because the government won’t bail them out. If you think life is going to be a walk in the park the whole time- you’re really in for a rude awakening.
May 12th, 2008 | #
I have a friend who got an MA and is now $45,000 (interest keeps raising that number). She said she’s planning on leaving the country because she can’t pay it. Before anyone says get a job, she is an English instructor at a local university. However, she only makes $1200 a month after taxes. There is no way she can pay rent, utilities, food, etc. and student loans. And no, she can’t get loan forgiveness for working at a university. I was just curious if anyone else knows of someone who’s left the country? I’m worried that she may get hauled back or the other country would extradite her? She says it’s fine, but I’ve never heard of anyone doing this before. Anyone know anything about this?
May 14th, 2008 | #
i too am in the same boat. nearing 100k in loans. cat find a job more then 28k/year. maxed out all my deferments and options. the payments are so high i cant even begin to repay, as the interest alone is more then i make!! i dont know what to do except hide and live my life without being part of the credit system. the only job i can get is 1.15 hrs from home and i spend most of my pay just getting to and from work. this is so out of control, eventually they have to forgive these loans or i’ll just grow old and die with 500k interest debt. in college i was just a kid, i didnt know these loans were a bad idea. the college said it was a good idea. i feel lied to, tricked, swindeled and now hunted.
May 15th, 2008 | #
Has anyone looked into income sensitive loans? I think those are my only options. I’m 120k in the hole from student loans and they’re asking me to pay 1700 a month and if I did that, I’d officially have NO life. I have no idea waht to do. I think about it every single day it’s awful. Every single dayyyyyy!!!!! What happens if you file chapter 13? does anyone know? who do we contact for help?
May 21st, 2008 | #
For my son and I this has become the big nightmare. There was no one for us to talk to about student loans, not even the bank where we got the loans. Like others, why is there not help for this young people who can not make the money it takes to make the payments and it is very hard to get the loans consildated. My son had to leave school to work inorder to start making payments. He also have health issues and new health problems on top of it all, still no help with the loans or health. This has always been the problem. You make to much money for one step and not enough to keep yourself from killing your credit. Now he feels like he will never have anything. And my credit is gone so I can’t help him either. Our goverment is so upside dowm in these areas. We are people trying to better ourselfs and now you get punished for it.
May 21st, 2008 | #
In the same boat as everyone else, with over 100k in student loan debt…anyone have any info on a group or petition that can be started or signed? Someone mentioned something above, but no contact info. We all need to do something.
May 22nd, 2008 | #
Miranda, I posted earlier and have been keeping an eye on responses. I just wanted to let you know that I don’t think you can get rid of student loans through bankrupcty. As far as I know, you can only get rid of them if you die or leave the country (and I’m not sure about the second). I wish they would make student loans interest free. That would help out everyone I know (including me-although I don’t have a large loan amount, it is still weighing me down.). To Ann, I’m sorry to hear about your son. It’s awful that we try to improve ourselves and then get screwed for it.
May 22nd, 2008 | #
Has anyone contacted his or her congress person/
May 24th, 2008 | #
1) You borrowed it, and you owe it.
2) Not everyone was fortunate enough to qualify for pussy federal loans. Many of us were stuck with private loans if we wanted to go to college. Would I have gone to a cheaper college had I realized how much money $40-50,000 a year truly is? Of course. But, at 18, we all thought we would go to the top schools and bank $70,000 or more upon graduation.
3) Do I think all loan borrowers, including federal, should be given clean slates? Of course not. We borrowed, we owe. But, additional repayment options and forgiveness opportunities for PRIVATE (NOT federal) loans would be a stellar start to a growing problem.
May 26th, 2008 | #
Patty,
Contact your student loan lenders immediately. Investigate repayment options and income sensitive repayments. Get a second, third, or fourth job. If you let your private loans go into default, you’re just fucking yourself and will magnify the problem. And, yes, your debt IS your husband’s debt, too. There is no getting around it.
May 26th, 2008 | #
I am entering my final year of college, and I just got denied a student loan….WITH my dad as a co-signer. He has great credit. I dont know what I’m going to do, but I am so worried I wasted my whole education and cant even afford to finish my last year….
June 2nd, 2008 | #
Amanda, try talking to your financial aid or bursar office. They may be able to turn you on to something that you would not have otherwise considered or known about. I think that financial institutions are really tightening their funds d/t the current status of the economy.
June 3rd, 2008 | #
I am 31 and work for an advertising company. I owe 25,000 in schools loans and after rent and buying food ect. I can hardly pay my loans off. I am about to default and have been trying to get the lender CITI Bank to work with me. After talking to them they say we cannot do anything since I do not qualify for income sensitive repayment. I know if I wanted I could just leave the US and not come back and say bye bye loans but I want to repay them and get my credit back on par. But with living is going up and up it’s hard! I say the loan payments should be based on where you live what you do and how much you make!
June 4th, 2008 | #
This is such a important issue that our government needs to address ASAP! As a student of divorced parents, I tried to qualify for federal loans before turning to private loans. However, because my father made six digits I did not qualify for federal assistance… but how am I suppose to MAKE my father pay for schooling when he doesn’t agree with college education. If we are to be adults at the age of 18, obtain our own debt, then release us from depending on our parents income to fund our college education under federal assistance. I turned to private loans like everyone else. Yes, they started at 5% and I took out roughly $76k to pay for 5 years of schooling. By the time I graduated, my interest rate was now 14% and I owed almost $92k because of fees and interest accumulated. Recently, I had to file for bankruptcy to eliminate my credit card and car loan just to try to get closer to making this payment. Now that my credit has crased guess what… my payment went up. They don’t get that we as student are trying to do what we need to make these payments but increasing them or the interest rate is not going to help. I work 2 jobs and still cannot afford my $1100 student loan payment with basic living expenses. This is CRAZY!!! I can’t even see myself purchasing a home anytime in the near future. Government wonders why so many homes that are for low sale prices are not being purchased. How can a student with $96k in debt and no other obligations get into a reasonable home of under $200k when our debt to income ratio is off the charts. Our economy will NOT change unless government looks to the student loan sector as well as helping relieve homeowners from foreclosure. It is frustrating. Student loans are suppose to be GOOD DEBT but we are treated worse then those with thousands in credit card debt. Looking at my truth-in-lending statement I want to cry. I am like otehrs who wonder if going to college was even worth it. It states that someone should make approx. $350k more in a lifetime with a bachelors degree however, my student loans states that I will pay $350 over the next 30 years!!! I am not asking for government to eliminate my debt because I did attend college and would need to pay tuition. What I am asking for government to do is to reduce student loan debt to the amount we borrowed and then apply an appropriate interest rate and tailor it to the salaries we current make and adjust every year. It is not realistic for creditors to think graduates can get out of college and make over $60k… I currently make $35k + bonuses. Alright, thats enought for now
exhausting… MAKE OUR VOICES HEARD. THE MORE WE MAKE THIS ISSUE AWARE, THE MORE LIKELY SOMETIME WILL GET DONE!!! GOOD LUCK TO ALL…
June 6th, 2008 | #
I feel so horrible for everyone on here - especially those who now regret going to college. At 28, five years after I received my BA, I am still having issues paying my school loans. My worst loan is my only private loan - a Wells Fargo education loan where my interest was 14.9% at one point. I pay close to $50 in principal, but overall my monthly payment is well over $300. My school loans total over $700/month.
My husband and I have tried to negotiate with Wells Fargo many times since I am now almost 90 days behind and am close to defaulting. They will not help us at all. I live in the NYC area, and with the cost of everything from gas to food, etc. going up, I am finding it more and more difficult to live that ‘American Dream’ we were all promised we would have once we graduated college. We wanted to have a child by 2010, but that doesn’t seem possible at this point and that saddens me.
However, I will say that I do not regret my college education. I’m not fond of manual labor, cannot style hair and have no other talents, so where would I be without this degree?? As far as I’m concerned, the problem is not getting an education, the problem is the cost of the education. Something that is necessary for me to survive in this country should not be so expensive. It’s all very depressing, but I’m glad to see that I am not alone.
June 6th, 2008 | #
Did anyone ever think they never of should of borrowed the money in the first place.
I do not think that any debt should be able to go into bankruptcy. All of these creditors shouldn’t have to lose and give away money to people who think they can sign a piece of paper and get out of paying a debt they incurred.
June 7th, 2008 | #
Considering in Europe college is pretty much FREE to people who WANT to go and better themselves, I wonder why we have to take out so much money and put ourselves so far behind the people who could care less about college and keep the money they make.
June 8th, 2008 | #
I decided to persue my dreams in the hospitality industry and enrolled at the California Culinary Academy. I was concerned about borrowing the money prior to enrolling in school. I spoke with an admissions rep and financial services rep and was assured that my payments would be around $250 a month. Since I felt this was completely manageable, I went ahead and enrolled. However, after I finished school and it came time for the loan to be repaid, my payments were over $600 a month. I spoke to a representative at Sallie Mae and was told that the first 15 years of repayment would go only to interest. I have looked into several companies that offer consolidation or debt relief, but since the majority of my loan is a private loan they say they can offer no assistance. Can anyone offer some advice?
June 10th, 2008 | #
I just received the latest threatening New York State Higher Education Services Loan Corporation Default Letter mailed to me and received in the US Mail today resulting from outstanding Student Loans owed as a result of trying to obtain a Masters of Science in Computer Science from the SUNY Post-Graduate Watson School of Engineering in 1984-86. I was excluded from pursuing a Bachelors Degree in Computer Science from the SUNY Binghamton Mathematics Department in the Spring of 1984 because I already had a Bachelors Degree in General Studies - Liberal Arts from Oneonta State College in 1973-77; but I was accepted into the SUNY Binghamton Post-Graduate Watson School of Engineering in the Fall, 1984 Semester despite only having 8 credits in Computer Science as a non-matriculated part-time student at SUNY Binghamton with a 3.60 GPA from 1982-84 and earning 0 Credits in Computer Science from Oneonta State College after getting a Bachelors Degree in General Studies - Liberal Arts there in 1973-77. The Federal Guaranteed Student Loan Program began in 1965 under the Lyndon Baines Johnson Administration. The Bankruptcy Protection Option for Students was removed by the Reagan Administration in 1980 and Wage Garnishment was initiated under the George W Bush Administration. My current balance owed to the New York State Higher Education Services Loan Corporation is currently $42, 321.232. My current annual salary with Endicott Interconnect Technology is $ 19, 281.60.
June 16th, 2008 | #
I too am in the same position. It upsets me that some people get on this site and make smart comments about how we should have thought about what we were doing. Well, when you don’t have someone around you who is smart enough to explain what you are getting yourself into, at the age of 18 to 22,it is very difficult to make the best financial decisions. At that age, you just want to go to college because it is supposed to be one of the best choices you could ever make. Most ADULTS don’t even make sound financial decisions. My argument is that I didn’t even have the chance to start out right. It is a huge shock to find out 6 months after graduation that a private loan should have been your last option, especially when you don’t come from a wealthy family. NOW that I am educated, there is no way out. It is so depressing and stressful because I am someone who wants to pay any debt owed. As a smart 26 year old who works in the financial industry, this seems pretty impossible considering the amount of my payments and how the loans have affected my credit. It’s not just the student loan payments. It also increases your debt to income ratio which in turn dictates your ability to obtain a reasonable car loan or home purchase loan. There is not any aid after school for private loans, but the lenders don’t have a problem giving you up to $30,000 a year whle in school. Consolidation? Even the loan collectors will tell you it’s basically impossible on a private loan. I am much smarter now and realize that I should have taken all of my federal loans before my private loans. My whole point is that it is rude and inconsiderate to talk down to someone suffering from private loan debt when at the time, we really just didn’t know any better. I mean, isn’t that why we went to school, to learn these types of things? It makes me sad that the government doesn’t have mandatory financial courses concerning debt as well as saving for retirement in all high schools of this nation. I certainly hope Obama is able to do something because I have seen too many good people suffer from financial situations and the inability to obtain health coverage.
June 17th, 2008 | #
May have found a loop hole for private loan repayment…
I am in the same situation as you guys. I was fed the same garbage growing up that college was a necessity. So upon graduating High School I went to College. I graduated expecting to make all of this money and then reality hit. I started working and found out that many people with no degree, and the same experience as me were making 15,000 more dollars a year than I was. This is absolutely ridiculous. So I started doing some research, and I mean a lot. I exhausted everyone of my resources and I think I may have found a loop hole around the private loan sector. I am not positive it will work, but when I know for sure I will post it on this site. Until then, Keep working hard, and living each day to the fullest. The government and banks may be able to take away all of your money, but they can’t take memories and friends. Find hope in the meanwhile and I’ll hopefully be back with some good news.
June 18th, 2008 | #
Wow, I thought I was all alone. I feel like I’ve promised my first born child to Sallie Mae. There has to be something we can do…
June 19th, 2008 | #
Go Phillip ! Let us know about that loophole. The biggest thing with me is how they (Great Lakes) do not explain any of the details to young people who are simply clueless about the fact that they are signing their financial lives away. Did you notice how fast that money poured into your account though? For our son it was simply on stated income. It really should be against the law.
June 25th, 2008 | #
Have any of you been tricked into the private loan? I think most of the people in the posts were seeking a career to make a better life. We have been played by the dept of Ed and the corrupt student loan industry. All of my education is worth nothing since the jobs in my field have been moved offshore. Compounding matters I am now 100% disabled and can not work, the private loan will not discharge.I am in process of going from an engineer to homeless. For Nick and Name which bank or Student Loan co.do you work for?
June 28th, 2008 | #
I went through sally mae because my school told me it was the best way to go. They even handeled everything for me. When I graduated I got hit with 700$ payments a month and 550 was interest. My loan was only 23k within one year it has jumped up to 33k due to the interest and me going into deferrment. Going to college was the biggest mistake of my life and I’m going deeper and deeper into a hole I can’t get out of. Going to college has ruined my life thanks to sally mae.
June 30th, 2008 | #
I have $130k in loans (all private), lost my job in November 2007, haven’t found a job in my field or any other field (Miami is terrible) how the hell am I supposed to pay my loans back? I fortunately am from another country and I will be leaving soon sending Sallie Mae to hell.
July 1st, 2008 | #
I know this situation is enraging; I have loans too. I know it’s hard to find out, too late, that most colleges are scams and hide behind self-righteous rhetoric to justify constant tuition increases to suppor their automatic pay increases and cush benefits, even as the degrees we earn help us little if at all.
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That being said, WE CAN’T GIVE UP. We can’t let these selfish, self-absorbed people ruin our lives. It won’t be easy but we must reinvent ourselves. We must develop a skill. Welders, mechanics, and plumbers are pulling in $80,000 in some parts. Two-year colleges are working with employers to develop curriculums and then those grads get JOBS after they graduate that start at $40,000 or $50,000 — even in southern states where the taxes and cost of living are so low.
We’re either going to live or die. If we live, let’s not give some of the best years of our lives to the thieves at four-year universities. Hang in there everyone and I’ll try to do the same.
July 1st, 2008 | #
LOAN CONSOLIDATION OPPORTUNITY @ 3.625%
I don’t think this is a scam but do not take my word for it. Apparently some federal loans taken out before July 1, 2006 can be consolidated at a fixed 3.625% interest rate.
Site: http://www.loanconsolidation.ed.gov/
Article: http://www.mainstreet.com/starting-new-job/what-fine-print-your-student-loan-really-says
July 1st, 2008 | #
Hi Everyone,
It sucks to start again, let me tell you, but nurses are getting signing bonuses around the country right now. Just a thought for getting things going again.
W222
July 1st, 2008 | #
Hey All,
I feel your pain! I returned to physical therapy school and graduated in 2006. I have Sallie Mae loans and they suck. My wife has cancer and they can care less. I applied for forebarence and they still said screw off! So much for looking out for our own. This government better wake up. Our government doesn’t work for us, they work for the damn businesses. You know what…if I default fuck it. You can’t get blood from a rock! My wife’s health is first. Thanks for letting me vent!
July 2nd, 2008 | #