Today

So here we are.  Not much has changed in the eleven years since all standard consumer protections were stripped from student loans.  For specifics on that, visit my website: http://www.keepjessicaafloat.com and click on About Student Loans.  I am encouraged that many good people are trying to change the laws, which are terrible.  A woman who used to work for Sallie Mae, (one of the largest collectors of student loans) is now regularly giving money to Student Loan Justice.  Check out Student Loan Justice on Facebook, they are working hard to try to change things.  It is striking that a former Sallie Mae employee recognizes that the laws are so bad, that she is giving money to try to change them.

Recently when I told a conservative that the student loan people go after the incomes of spouses of people who have student loans, he was surprised.  I met a young woman whose student loan payment was doubled after she got married!  On the application form for a payment plan, there are blanks to fill in all your spouse’s information, including their gross income.  You are also expected to send in your most recent tax return. It doesn’t matter that you likely didn’t even know your future spouse when the loans were taken out.  It is taken for granted that their income will go toward paying them.  I believe this is a factor in why so many young people are raising families without getting married.  I read recently that people are borrowing less money for college. This could be related to the many student loan horror stories out there.  Unfortunately, it also likely means that many prospective college students are being priced out of the market.  College costs need to be lowered, and standard consumer protections, including bankruptcy, need to be restored to student loans.  And this needs to be retroactive, for the millions already caught in the trap.

My Story

I married and had kids late.  My husband earned good money.  I was a stay at home mom, raising our two daughters, and his two kids from his first marriage.  Then he decided he didn’t want to be married any more.  I hadn’t had a regular paying job in years, so it took months to find a low paying secretarial position.  I felt fortunate to have that.  I already had a college degree, a BA obtained in the 80’s.  I’d quickly paid off the small loans on it. When I was in my 40’s and my girls were in elementary school, I decided to go back to school for my master’s degree.  I thought it would lead to a better paying job and improved quality of life for my family.

I worked very hard for nearly three years, parenting, full time job and a graduate program.  I started looking for a professional job six months before graduating.  I figured within six months to a year, I would have a professional job.  I had a plan to pay off my loans early, well before retirement.

But I couldn’t find a job.  I looked for years.  When I hadn’t found a professional position within a few years, I searched for ANY better job.  No luck.  My loans were on financial hardship forbearance.  I simply didn’t have the money left over from basic living expenses to pay on the larger student loan account.

I did begin paying the smaller account, a Perkins loan, a year after graduation.  Perkins loans were only made to low income borrowers.  I will have the Perkins loan paid off a little more than a year from now.

But there was no way I could make the payments on the larger account.  The interest continued to mount, by thousands of dollars.  Finally the servicer told me that I could no longer postpone payment.  I said that I couldn’t make those payments, plus pay rent and buy food.  The guy would even listen to me.  Every time I started to say something, he interjected “You’re out of forbearance,” over and over.  He wouldn’t even let me get a word in.  I finally hung up the phone, sick at heart.  I was informed by mail that my first payment, for hundreds of dollars, was due in two weeks!

Friends helped me out, and I was able to avoid default.  If you default (don’t pay) on these loans, they pile on more fees.  And they can just take the money, by garnishing your wages without a court order.  The student loan lenders are apparently not concerned whether or not you will have enough to live on, they just want their money.

My friends’ help dropped off after a while.  I lived in fear of homelessness.  With the student loan payments, I was barely able to pay my rent.  And I couldn’t manage to save enough to move.  I would have insomnia for weeks at a time.  I wrote and asked them to lower the principal.  Now in my 60’s, the odds of finding a better paying job are slim, to say the least. I got back a form letter saying “We don’t negotiate on the principal.”  I wrote begging for a break on the interest.  At this writing they have added over $12,000 in interest charges!  Another “no” to that request.

Fortunately, I was able to move in with a friend, so did not become homeless.  I am paying hundreds of dollars a month to student loans.  Some of that money, for my future survival, should be going into retirement savings.

I became aware, as I researched the student loan situation, that there are many thousands, if not millions, of seniors in similar trouble.  I decided to try to do something to improve things for others like me.  That is the reason for this blog.  Please share it, and encourage others to do so.  I believe that most Americans have no idea how bad the laws are.  Read my earlier posts and/or do your own research.  Thanks for reading.