Getting Back On Your Feet When You Have Lots Of Bad Student Loan Debt

Reader Jennifer sent the following letter to a few lawyers looking for some help with SallieMae. They told her that there was nothing she could do and to negotiate with the lender and to start making payments:

Hello,

I’m writing this email to express my interest in your services. I’m looking for some legal help with the matter of my student loans with Sallie Mae. Basically my situation is that for the past 3 and half years I haven’t been stable, financially or emotionally. I’ve also have had difficulty finding and keeping a job and I have not had a steady place to live, basically staying with different friends for a few months at a time. During this time I haven’t contacted Sallie Mae about my loans. Initially I had talked to them a few years ago and they threatened to garnish my wages but at the time I wasn’t working so there wasn’t much I could say in response. I’ve changed addresses and phone numbers several times in the past few years and I’ve lost contact with them. My parents have mentioned that they’ve received calls and letters but without a stable place to live or work I didn’t contact Sallie Mae.

Recently I started a pretty good job that I’ve had for the past 4 months and I’m doing well. I have a stable place to live and I’m making enough money to support myself. With what I make, it’s about enough to pay my rent and utilities, but I still don’t make much more than that to be able to start making the $400 a month payments they want from me. I would like to start making some kind of payments for now and increase that amount as my financial situation improves.

I’m afraid however to contact them because of threats they’ve made about garnishing wages in the past. They told me that they can take up to 25% of my pay, and frankly if I lost a quarter of my income I’d lose my place to live and be unable to get to work and be at square 1 again. I’ve read on the consumerist (www.consumerist.com) about Sallie Mae harassing people and causing them to lose their jobs. So I would prefer to have an attorney contact them for me initially to set up an agreement and to help me understand what they can and cannot do. I’ve also read about debt collection agencies illegally threatening and insulting people, and I’d to be informed about my rights in this matter.

I’d like to make an appointment for a consultation. Please let me know if you think you can help me and what you can do for me and what your rates would be. Thank you very much for your time.

Regards,
Jennifer

Congratulations on getting a job and turning your life around! If you had federal loans, the answer would be simple, because they have flexible loan workout programs that can help people who have been through some tough times. Private loans are much more difficult to deal with. Student lenders have broad rights not available to traditional “debt collectors,” and it can be difficult to get back on track, even if you’re well-meaning.

According to the Student Loan Borrower Assistance website, your private lender isn’t required to offer you income based repayment like you would get if you had a federal loan. You should contact them, however, and ask them what income-based options they are willing to offer you.

Sadly, the best recourse for you may be to file bankruptcy. It’s very difficult to get your student loans discharged through bankruptcy, but it isn’t impossible. You’ll need to prove that repaying your loan will cause you undue hardship:

Courts use different tests to evaluate whether a particular borrower has shown an undue hardship. A common test is the Brunner test which requires a showing that 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987). Not all courts use this test. Some courts will be more flexible.

If you can successfully prove undue hardship, your student loan will be completely canceled. Filing for bankruptcy also automatically protects you from collection actions on all of your debts, at least until the bankruptcy case is resolved or until the creditor gets permission from the court to start collecting again.

Assuming you can discharge your student loan debt by proving hardship, bankruptcy may be a good option for you. It is a good idea to first consult with a lawyer or other professional to understand other pros and cons associated with bankruptcy. For example, a bankruptcy can remain part of your credit history for ten years. There are costs associated with filing for bankruptcy as well as a number of procedural hurdles.

Even if you can’t get the loans discharged, you can repay them using a Chapter 13 repayment plan:

CHAPTER 13 and STUDENT LOANS

A case under chapter 13 is often called “reorganization.” In a chapter 13 case, you submit a plan to repay your creditors over time, usually from future income. These plans allow you to get caught up on mortgages or car loans and other secured debts. If you cannot discharge your student loans based on undue hardship in either a chapter 7 or chapter 13 bankruptcy, there are still certain advantages to filing a chapter 13 bankruptcy. One advantage is that your chapter 13 plan, not your loan holder will determine the size of your student loan payments. You will make these court-determined payments while you are in the Chapter 13 plan, usually for three to five years. You will still owe the remainder of your student loans when you come out of bankruptcy, but you can try at this point to discharge the remainder based on undue hardship. While you are repaying through the bankruptcy court, there will be no collection actions taken against you.

Why not talk to a bankruptcy lawyer? It’s obvious from your letter that you want to pay your loan, just not while living on the streets. Good luck!

Has anyone successfully negotiated smaller payments with Sallie Mae? Share your advice in the comments.

Student Loans & Bankruptcy [Student Loan Borrowers Assistance]

Comments

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  1. Walrii says:

    Ahhhh, the American higher education system…

    Why do we place such an incredibly large financial burden on those who are going to significantly help the economy / science / humankind?

    It’s like we’re trying punish smart, hard-working people. :(

  2. nyaz says:

    sally mae what a bunch of bastards, I have first hand experience.

  3. jimv2000 says:

    @Walrii:

    “Why do we place such an incredibly large financial burden on those who are going to significantly help the economy”

    Apparently not so much in her case, since she can’t even get a decent job. Lenders ought to ask about the student’s major before lending the money.

  4. lincolnparadox says:

    I had Sallie Mae loans from undergrad for a long time, but they were all in deferment while I was in grad school. The day I got my diploma, I switched all of my loans to a different company through a consolidation loan.

    That might not be an option for you. However, I’d look into other loan options before you looked into bankruptcy. It could be possible to get a bank loan and deal with them. Sallie Mae is the effing antichrist.

  5. TheBestMaxEver says:

    Sallie Mae owns my soul for the next 20 million years as well. This is the system as designed in America if you are smart and want to go to college I am greatful for my amazing education, but will most likely have to get a third part time job giving BJ’s to Johns in downtown Phoenix for a few bucks a pop in order to afford generic toilet paper. Good Luck!

  6. XTC46 says:

    @Walrii: becasue good professors to treach classes, nice labs, buildings, libraries, campuses cost money to maintain and build. THe only way around high tuition is govement subsidy, which means higher taxes. So instead of the people that are hard working getting the debt (which is assumed they will be able to pay back with their good job)it would be spread accross everyone. Why should I have to pay for somone elses education? I paid for college my self, and left college with 3k in debt. Thats it. I lived on my own with no help from my parents.

  7. QWGHLM says:

    @jimv2000: Uh, asking about a student’s major is totally irrelevant. I know very successful English majors and I also know people with engineering degrees who are rotting away on a couch in their parents’ basement.

    Perhaps you should get off your high horse. It’s not about the major.

  8. Orngbliss says:

    I am currently a student, almost finished!! I have one private loan through Sallie Mae as does my brother and several other people that I know.

    I haven’t had to pay my loan back to Sallie Mae yet, but my brother went through a similar time in his life as the OP. Although his time frame was not 3yrs…. Sallie Mae was more than accommodating with him. It took him about a year, but once he got on his feet and working at a stable job, he was able to start repaying Sallie Mae. I guess the main difference is that my brother kept in constant contact with his creditors rather than “running” from them.

    The lesson we all can learn from this is to face your problems head on and right away, don’t let 3 years go by with no communication. Of course Sallie Mae is not going to be accommodating to her at this point. She has jerked them around for 3 years. Most of the time your creditors just want to hear from you. They want to know that you are not going to skip, they want to see some sort of attempt on your part.

  9. bdsakx says:

    Sallie Mae is incredibly ruthless. They dangle money in front of you and you’re kind of forced to take it and the terms and interest rates that go with it in order to start school. Even after a while they’ll give you a cash back check that is tempting to use, but riddled with interest.

    While I’ve never been in any financial qualms with them, I have had to work with them recently to clear up a few issues. They are pretty much hit and miss, and it all depends how compassionate the CSR is on the other end.

  10. PirateSmurf says:

    Sorry but Student loans are not dischargable. Dont bury your head in the sand, the fact that you avoided and ran from dealing with the situation, even if you couldnt pay them anything is a big black mark on your ability to work out any sort of repay workout with them.
    Your only option is to talk to a bky attny about filing ch13 so you can get into a repay plan.

    All I can say is you made it worse for yourself by ignoring the situation (which is what most people do)
    Even if you cant make payments moving and changing your number to avoid contact with the bill collector is not a good thing.
    Best thing is to keep in contact. Dont be afraid to deal with it, just remember if you ignore it then it will only get worse and worse, then you have to deal with a worse situation then before.
    Best of luck to you..

  11. FishingCrue says:

    The Brunner test is generally hard to prove because of the second prong, you pretty much have to show that circumstances will never pick up for you for a discharge to issue. Because there is always the chance for career advancement courts are sometimes unwilling to order discharge without an ongoing handicap that prevents advancement. TINLA — Consult a lawyer in your jurisdiction.

  12. CMU_Bueller says:

    @QWGHLM: In some cases it is about the major. What are you going to do with a major in ‘animal studies’ if you fail to get into vet school? Or a psychology degree if you don’t go to grad school? The answer is nothing, except maybe work as a receptionist in a vet or doctor’s office. The fact is your major does matter to SOME extent.

  13. sprocket79 says:

    Ouch… I feel the pain with Sallie Mae. And not trying to be “blaming the victim” because it’s meant to be more like advice… but you should keep an open line of communication with them. They may be less inclined to help her now because she spent the last few years avoiding them. The best thing she can do for herself is actually talk to them and see what they can do for her because they can find a way to garnish her wages even if she doesn’t talk to them. In my experience, running away from problems makes them worse because then you end up with a lot of anxiety about what could happen rather than dealing with what actually is happening.

  14. Call them, but don’t tell them where you work. I did, and arranged to make payments. Behind my back, they got my wages garnished.

  15. QWGHLM says:

    @CMU_Bueller: Yes, but your choice of major should not be used to affect whether or not lenders are willing to lend you money. Just like your medical records should not be used to affect your insurance rates.

  16. That70sHeidi says:

    I spent a few years without speaking to the loan people as well, during my period of unemployment (and mounting debt). What really bothered me was that I was only about $1,000 away from paying it off when I lost my job!

    I did end up declaring bankruptcy, so I’m not sure if that influenced their openess to let me “rehabilitate” my loan or not. I basically agreed to automatic monthly payments (only $50) for a period of time (I think it was 9 months) and then my loan was revamped on my credit rating to be “normal” – I was not in default at all any longer.

    After that you can continue to pay the automatic monthly payments. You can make additional payment each month (i.e., a month you’ve got some overtime), or you can use their calculators to figure out how much more you can pay automatically (i.e., no matter if you’ve got the money or other expenses or not). You can also try and negotiate lower payments. But only AFTER rehabilitation!!

    I suggest you contact them and ask if it’s possible to rehabilitate your loan (and use that exact phrase). You don’t say how much you owe, so I’m not sure if my situation was at all a guide or not.

    Also, usually the interest rates on student loans are lower than other lenders (credit cards, store cards) so you may be better off making small payments over a long period and bank that extra for savings.

    Good for you getting back in the game, I know it’s tough! If you qualify for insurance, I’d suggest also looking into some therapy and possibly antidepressants to help with your transition. The relief of being out of the crushing hole can only sustain you so long as you look back on what you’ve been through and ahead to what you have left to do!!

  17. henwy says:

    What baffles me is she can afford to pay the lawyers.

  18. PirateSmurf says:

    IMO there are two things that should be free, Healthcare and Education. Raise taxes if you have to but with all the dumb ass spending fires our govt tosses money in we could afford to do this without raising taxes that much.
    But then again our govt loses to burn cash on wastful ideas…or themselves.

  19. CMU_Bueller says:

    @QWGHLM: Why not? Loans are made based on the assumption that you can repay them. Some majors have shown that they are bigger risks than others.

    But hey, if you’re ok with it, let’s just give everybody credit regardless of whether they can afford it later on down the road. That won’t cause any problems at all.

  20. Buran says:

    @jimv2000: How do you know why she can’t find a job? I’m trying to find one in an area I want to relocate to and I can’t, I keep getting passed over. It’s not because I’m a deadbeat. It’s because, at least at the last place I applied to, they got 3,000 resumes FOR ONE JOB.

  21. sean77 says:

    @PirateSmurf: Education is free. College is optional. Not everyone should go to college.

  22. bohemian says:

    Getting loans discharged is about impossible. They are even going after people on social security disability for repayment. That’s pretty ruthless.

    If your going to contact someone go directly to Sallie Mae or the Dept. of Ed, not some 3rd party collection agency. The 3rd party collection agencies will end up making more trouble and they have zero motivation to negotiate anything. Another option is to contact the Student Loan ombudsman with the dept. of Ed.
    Sometimes they can help. All of this is dependent on the loans being the typical govt. backed ones under their control.

  23. bdretired says:

    It WOULD be nice if the govt paid for education but that’s not our world. Students CHOOSE their education. They have to make CHOICES about whether they can afford it and how to pay for it. Sometimes they make bad decisions.

    Holding Sallie Mae or any other student lender accountable for the high cost of education is like saying credit card companies are responsible for high gas prices. The lenders make it possible for many people to achieve their goals but they are not charities. It’s not unreasonable for them to expect to have their money returned as agreed.

    Except in extraordinary circumstances, bankruptcy is a choice for weasels who believe someone else should pick up the tab for their bad decisions. All those weasels increase the cost for the people who make good decisions and actually pay their bills.

    Jennifer needs to face the CHOICES she made even if they were bad ones and begin to behave responsibly. Three years of evading her responsibilities has placed her in a very awkward negotiating position but she needs to try working with her lender.

  24. oakie says:

    sounds like someone should be in the market for a second job.

  25. oakie says:

    @Buran: then you should have studied in a major that is more specialized to prevent that from happening.

  26. Parting says:

    I’m so happy that in Canada, all loans are related to federal government and 5 major banks. No Sallie Mae to abuse students. Sallie Mae is worse than a credit card offering hot dogs in exchange of potential debt.

  27. vdragonmpc says:

    Yes Virginia, Sallie Mae IS the devil. Honestly if I had the chance I would snipe the top executives of the company ‘hitman style’…
    They harassed me WHILE I was a full time student and put me in collections WHILE I was in school. I had to jump through all kinds of hoops to get them to understand that yes VCU is a college and I am currently attending. Let me tell you they are the biggest scummiest piles of steaming roach turds. They wouldnt accept: Report Cards, Transcripts, the freaking bill, book reciepts, course schedule, Letter from my Dean etc… I had to get all kinds of criss-cross crap for them in their forms. (snail mail as email wasnt fully used or the internet at the time)

    They tried to wreck my credit and made all kinds of threats. Funny thing I had direct loans the ENTIRE time and never had a problem with them EVER! Even better they put their crap on my credit report… I had to get it removed several times as incorrect. How can I go into repayment as a full time student (anything over 6 credits was full time I was at 9 after dropping calculus 2) They tried to say summer counted. against me as I wasnt in school in the summer uhm thats 4 months last I counted….

    God UHC and Sallie Mae can always get me ranting… I have a huge box of reciepts and payment books from them STILL. Can you believe all their crap was over a 1400$ loan? When I paid it off after their raping it was 2890$!! They did not work with me AT ALL. I was told by at least 23 CSRs that they are a Student Loan Lender and Thats it and thats that. Pay or we screw you. No negotiation. NO help no nothing.

    I wish they would all burn in the lowest deepest hole in Hell.

    V

  28. Buran says:

    @oakie: Ha. Even the speciality jobs are getting slammed.

  29. modenastradale says:

    I don’t mean any disrespect, but to the OP — please disregard Meg’s advice regarding bankruptcy.

    The fact is, the student loan industry, with the assistance of our corrupt campaign finance and bribery system, wrote itself an indestructible set of federal legal protections. Forget about “undue hardship” — you won’t be able to discharge your loans, period.

    Not too long ago, there was a borrower who was trajically injured and became a quadriplegic. He sought bankruptcy under the “undue hardship” test, and despite taking his case all the way to the Court of Appeals, he was unsuccessful. The Court essentially said that having to repay student loans while being a financially constrained quadriplegic is not “undue hardship.”

    You’d be better off investigating your emigration options before looking to bankruptcy courts for help.

  30. chiieddy says:

    @PirateSmurf: Thank you. Consumerist! PLEASE do some research before offering advice! The person could file for bankruptcy, ruin their credit needlessly and STILL have to pay back the student loan.

  31. modenastradale says:

    @xtc46:

    No way.

    Universities claim that tuition just keeps rising because they can’t keep up with the increases in costs. The fact is, tuition increases are usually more than *double* the rate of inflation — and they continue to rise even when you see staff salaries staying flat, poor maintenance to the facilities, reductions in student services, etc.

    The real reason for the extravagant tuition increases we’ve seen is that universities, like any business, will charge the full amount that customers (students) are willing and able to give them. Students have had it drilled into them from such an early age that college is the be-all-end-all, that most will borrow whatever amount the schools tell them to. And the lenders have been pouring gobs of money into the higher education racket. This tidal wave of available credit has been fueled by the dual forces of lax monetary policy and incredibly strong federal legal handouts for banks — handouts which, of course, the banks bribed Congress to get.

    Naturally, seeing that (a) students really, really, really want to go to college, and (b) banks will loan students an unlimited amount of money, universities made no effort to keep prices reasonable. Instead, they charge students the maximum amount they feel they can possibly get away with each year.

    I don’t know if it’s true everywhere, but in the United States, most universities (especially private ones) are just thinly veiled for-profit corporations that couldn’t care less about the long-term well-being of their students.

  32. mac-phisto says:

    1 – call sallie mae & tell the truth – you have a loan (or loans) that you are delinquent on, but you are interested in setting up a repayment plan.

    2 – do not tell them where you work. do not tell them you have a regular job. do not give them a work number. if they press, explain that you have “income”.

    3 – be truthful about what you can afford. don’t overdo it. if anything, underdo it a little bit b/c if anything, your expenses tend to go up in relation to your income, not down. if you can afford $200/mo., tell them that.

    4 – do not set up automatic payments thru a bank account – at least not until the account is in good standing. & do not pay with checks (they have all the information sallie mae would need to raid your account or serve a bank execution). instead, consider money orders* or a bill payer service (where you pay the service & they make out the check/ach). some bank bill payer services issue checks from your account – i would suggest against this. you do not want them to know your bank account number. period. tell them you don’t have one if they press you.

    *consider “backend fees” with money orders. for example, what does it cost you to trace a payment if sallie mae says they never received it?

    5 – get the details in writing & be sure that you are going somewhere with your plan. what does it take to get the account back in good standing? how many payments before the late fees drop off? how long will it take to pay back? when can i consolidate the loan? these are all great questions.

    i don’t think i’d consult a lawyer or consider bankruptcy until i knew where i stood. try to work with them. move up the ladder if the person you’re speaking with can’t meet what you can afford to pay.

    & if after all of that they are unwilling to work with you, consider explaining that you have a meeting scheduled with a lawyer to consider other options, including bankruptcy. if they don’t bite on that carrot, you know what to do next…

  33. yourbffjill says:

    @xtc46: well we are all so very proud of you.

    I’d rather pay for someone’s education than pay for their welfare. and I’d rather pay for someone’s welfare than someone’s war.

    I hate how every time I or someone else argues for more government spending in education the natural reaction seems to be “oh noes more taxes!” That money can and should come from places where it’s currently being wasted…

  34. Xay says:

    AFAIK, the only way that you can get your loans discharged it is to be 100% disabled or dead. Bankruptcy will not protect you.

    @mac-phisto: I agree completely. I went through a similar situation (except my loans were federal) and all I could do was throw myself on their mercy while giving them as little of my bank information as possible. I was able to rehabilitate my loan for a year, consolidate and then get an economic deferment until my employment situation improved.

    Also – basing loans on major is just stupid. As others have said, your major doesn’t guarantee success. There are a lot of computer science and engineering majors that are making what I make (with my psychology degree).

  35. mac-phisto says:

    @xtc46: something you should read –> [realcostofprisons.org]

    my favorite part:

    In the Northeast as a whole, from 1987 until the present, inflation-adjusted spending on higher education dropped 5.5 percent while prison spending rose 61 percent…

    it’s no secret that a person’s level of education is inversely proportional to their propensity to wind up in prison. you want to save tax dollars? educate the masses. does everyone need a college education to succeed? no, but an aspiring scholar should never be denied b/c they can’t afford to learn. that’s just silly.

  36. elijah_dukes_mayonnaise says:

    @xtc46: Good professors, hell. Try graduate assistants and adjuncts.

  37. levenhopper says:

    The HUGE issue you fail to include is that if you file for protection under Chapter 13 or 7 is that you can forget about getting any credit for the next 7 years. No credit cards, car loans or mortgages.You’ll have problem renting a place to life if they do a credit check.

  38. riggerfinger says:

    I graduated last year with over $100,000 in student loan debt from three seperate banks, Citibank, Sallie Mae and KeyBank. The biggest loan being from Keybank. I have a degree in animation and after 3 months of unemployement, trying to break into the industry, i finally got a foot in the door, but making a $15/hour. I have started paying on my two smaller loans, but can’t afford to start paying on the Keybank one. I have rent and car payments and there is no way i can afford over $1100 a month for a student loan payment.
    Why is it so expensive to go to school in US? Our education system has gotten works and the price has only gone up. I dont’ think it matters what your major is, if there are no jobs, then there are no jobs. When I was approved for this huge loan, i was making $10/hour. They were throwing the loan in my lap. Of course i took it to fulfill the dream of art school. Now, i’ll be chained with this debt on my back for the rest of my life. Makes you want to stay home and not try. It demoralizes a nation.

  39. failurate says:

    @mac-phisto: We already offer free education to “disadvantaged” folk. You can lead a horse to water but….

  40. failurate says:

    @levenhopper: I think she has already burned all those bridges.

  41. THEREWILLBEFOOD says:

    I was mentally tired of having school loan debt. It felt like a cloud that only followed me around only to rain on my parade when I would attempt to apply for a car or home loan.

    After my wife and I refinanced our home I used some of the equity to pay off my loan. Best move I ever made besides getting married.

    I owed $54,000. I called the US Dept. of Ed and asked them how much they would take to “settle”. They said $40K. I went to the credit union, obtained a cashier’s check and paid that sucker off on January 30, 2008. Now my credit score has dramatically increased and we feel free.

    I thought hiring a lawyer to negotiate a settlement but you can negotiate on your own. Go for it!

  42. SuperRad says:

    You know what, about 3 weeks ago i noticed my checks were short. I called my payroll department and it turned out AGS was garnishing 25% of my check. I called the number payroll gave me and it rang and rang. Someone answered “Hello” and then hung up. Then i called again and it went to someones voice mail saying something like “You reached Barry, leave me a message”
    Then i called again and someone finally answered. They did not want to disclose what the garnishment was for but eventually he said sallie mae.
    I asked them that they are taking more than i have for disposable income and have a family to support and they just said “There is nothing we can do”
    I told him i had the intent to file for bankruptcy to stop the garnishment because there is honestly no way i can afford 25 percent of my pay.
    The guy said we are going to get our money.
    And said Have your lawyers call me after you file.
    So i waited and called again and they finally worked out a payment plan and stopped garnishment all within 2 weeks. But they still want 25 percent of my check for 3 months and after that it will be a low payment i can afford for the remainder of the time.
    I had my mom open up the last letter they sent me as i am in a different state and all my old mail goes to her house. I asked if there was anything within the last 5 letters about them going to garnish my check, or papers that are served to take me to court and she said they just said pay 300 minimum payment.
    I was thinking that’s not right since i was looking up information on this last week.
    Well i’m just paying it off as it wasn’t much but some companies need to follow procedures, and as people are saying “Corporations can get away with things that would get a normal person in trouble”

  43. mac-phisto says:

    @failurate: fall asleep at the keyboard? let me help you finish that.

    We already offer free education to “disadvantaged” folk. You can lead a horse to water but….you can’t let him drink it. at least not all of it. you can let him have a sip for free ($4000 pell grant max/yr funded to ~$16 billion which is enough money for ~4 million students). then you can let him sip a little more at a reduced cost ($5500 max on stafford loans). but if he’s really parched (average cost of an education at a 4-year college is ~$20,000/year), he’s gotta visit the loan shark around the corner & sign the dotted line to make up the $10,000+ gap.

    oh wait. you probably weren’t talking about a real education, were you? when you said free, you probably had this in mind –> [www.gcn.com]

    but i digress. let’s focus on helping jennifer.

  44. t0fu says:

    i wish my loans were only 400$, after graduating last year my loans around around 800$/mo

  45. What The Geek says:

    I see a lot of people talking about the cost of college and the justification for that cost. The sad truth is that the reason college costs what it does is because schools are businesses. Plain and simple – they’re in it to make money. Every educator from kindergarten teacher to college professor is underpaid. When it comes to student housing, some schools will rent out a block of privately owned apartments at a “bulk discount” and charge the students double (or more) what they pay. Now, I understand the cost of maintenance, and employing educators and other staff, but the fact remains that most schools charge steep prices for things that are necessary to go to school. They get away with it because the money going into their pocket is coming from lenders, not the students themselves. I guess the bottom line of what I’m saying here is that the bulk of money dumped into colleges is going to the top handful of administrative staff, and the nice things in their offices – it’s not going into the education of the student.

  46. @modenastradale, mac-phisto: Who cares about the “average cost” or that private universities are expensive? Did we learn nothing from the current sub-prime lending crisis?

    Live within your means. Every state has a system of inexpensive, tax-payer-financed state schools. Most of them are pretty good. Even if they’re not ivy league, the price/performance ratio is astronomically high.

    @elijah_dukes_mayonnaise: Graduate assistants and adjuncts are cheap, cheap, cheap. Unbelievably cheap. (Bonus: you can fire adjuncts at will!)

    @CMU_Bueller: “Risky” majors? Which ones are those? I’d like to see some data to back that assertion. Or did I miss the US News and World Report 2006 Ranking of the Best Majors and Their Lending Riskiness? I heard it included a number of useful stories:

    Want to be an Vet? You Might as Well Quit Now
    I’m Not Crazy: We Don’t Need Any Psychologists, kthx
    Majoring in Business Means You’re Too Busy Drinking (and Will Make More Than I Will!)
    If You Got A Real Job, This Wouldn’t Have Happened
    Engineering is the Only True Major
    Seriously, Art? Are You Kidding Me?

    (And don’t forget majors are subject to market forces, which explains why we don’t have anyone majoring in Railway Management or Vacuum Technology anymore. It’s really not an substantive issue.)

  47. MightyCow says:

    Sallie Mae is pretty damn ruthless. They offer to let you defer payment while you’re studying, but then they take all the interest accrued during your study and turn that into capital, so you get to pay your new interest on all that amount too! Aw, so friendly.

  48. lasereric41 says:

    How sad is it that in order for the majority of the population to get a good job, you have to put yourself into such grave debt that the only course of action is to file bankruptcy? I have a friend who has his masters degree – and the debt to go with it – and when he goes to job interviews he is told that he doesn’t have enough experience. I thought that’s what college was supposed to be. What good is $50k in debt and a masters degree if all you can do is get some $30k/yr job working for a guy that hasn’t finished his undergrad yet? If you want to know why the economy is slowing to a death crawl, it’s time to look at the cost of higher education. Is a college degree worth destroying your financial future?

  49. goddesssparkle says:

    I have a couple of thoughts, and some of them surprise me and may not be popular.

    First off, I agree that education should be government subsidized. Those who carry on about taxes just don’t get it. Having a better-educated population makes the nation and economy stronger. I’ve traveled extensively and lived overseas: the countries where education is a given if you’ve got the grades are much better off. If the US doesn’t catch on, we will be left by the wayside as other economies and nations progress more rapidly.

    Secondly, I have Sallie Mae loans and I despise the company. I haven’t missed a payment or been late in 5 years; they’ve lost payments, been inept, and basically everything else massive corporations are. I had to contact the Federal Ombudsman for assistance in getting my account status accurate. Sallie Mae was very responsive once the feds were involved.

    However, I don’t know that I honestly can empathize with this person. In principle, again, I think it’s ludicrous that Americans go into massive debt to go to college. But that is our situation at the moment, and I knew I had to make damn sure I was able to pay my loans back when they started sending me those fun statements a year after I graduated.

    So I knew I had to make it work. After I graduated, I juggled two jobs to tide me over until I could land better employment. But I also knew that should that not have happened in time, I could have requested deferment/forbearance. Granted, this is good for a limited time only and possible to invoke a limited number of times over the life of the loan, but it is available.

    When the borrower does not contact the lender however, and/or does not provide accurate contact information, this option may no longer exist. And fees accumulate. I’m surprised one would expect different action from Sallie Mae then them pursuing someone who has broken their contract. I don’t agree with nefarious tactics that many corporations including Sallie Mae may employ (though it is explicitly clear in the paperwork that when you sign for this money, they will be able to garnish your wages and pursue repayment by all legal means) however, I also don’t agree with avoiding responsibility as a consumer when you initially agreed to do so and the terms of contract haven’t changed (as in they haven’t tried to cheat you by secretly increasing your interest rate, adding mysterious charges to your bill, and the like).

    I also know that Sallie Mae actually drops your interest rate after so many years of perfect payments. Again, I don’t think they’re god’s gift by any means. But they’re a responsibility I signed for.

    A friend of mine deferred all her loans while she worked coffee shops and photo shoots as she tried to “make it” in NYC. A coworker just got divorced and requested forbearance. And many of the people I know, myself included, currently have or have had concurrent jobs to make sure our bills are paid.

    I hate my car loan. I hate my bills. I often live paycheck to paycheck. But do I do – not pay bills for services rendered? I’ll fight companies when mistakes are made but in the meantime, I pay what I have taken on.

    What Jennifer is doing is denying accountability and therefore continuing to make her life more difficult than necessary.

    P.S. They can still pursue payment for student loans despite a declaration of bankruptcy.

    P.P.S. She can afford a LAWYER?

  50. Is there any way for her to consolidate? Find another lender who will pay off Sallie Mae and offer you payments at a lower interest rate?

    @lasereric41: Word. I went and got about $60K of higher education to make an additional $400/year. See, teacher have to have MAs/MSs in order to be fully credentialed in CA, as well as accumulate 150 semester hours every 5 years in order to maintain their credential. Yet the average teacher only gets a $400 pay raise for every degree/50 semester hours accumulated. What a racket.

  51. jazzy1224 says:

    Jennifer, look first things first, is your in trouble. Student loans are one of those things that just don’t go away. Whether you have $1500 or $15,000 your going to have to repay them. So, with that, my advice would be to hold off on an attorney or filing bankrupcy and call AES (American Education Services/Stafford Loan) I don’t know if this is possible, but see if you can consolidate through them. It is government based and they have many options of repayment available. I am currently on the lifetime plan :), it’s actually the 15 year, it has been good because I can repay slowly and not kill myself. This situation will not resolve quickly. It will take time, but patience is what you need. If AES turns you down, then contact Sallie Mae. Talk with them, explain your situation, and take the advice of some of the people here and don’t give them any other personal information, such as job or bank. If they require an address and it’s possible give your parents address. Tell them the truth, explain that you were scared because you couldn’t pay and you know now that you should have contacted them and you want to repair the situation. Explain that you can’t afford $X dollar, but you can afford $X. My experience has taught me also to be persistent. If the first call doesn’t work, try again, your goal is to get the bleeding heart. Someone who feels they need to do something good for the day. In my early years, I did what you did, I ran, I hid, I was scared. But, it gets very overwhelming, very fast. Don’t let this get get the best of you, you will get through it. It will be tough, but stay strong. Good Luck!

  52. nequam says:

    The attitude expressed in a number of these comments about college majors is really sad. Not everybody treats college as merely a trade school, the only purpose of which is to get a good job — that’s not the true point of education and sean77 makes an excellent comment. Education is about improving yourself and your outlook. Financial success is a nice byproduct for anyone with a good head on his/her shoulders. And for those people, college probably isn’t necessary. But should they choose college, why not study what interests them?

    In my unscientific study based on personal anecdotes, I can tell you that of my high achieving college friends, the most successful in terms of their employment were biology, theology, sociology and English majors. By the same token, my friends with undergraduate business degrees are mostly workaday drones, slugging along towards retirement at everybody-else speed.

  53. I’m pretty much in the same position as Jennifer. I was going to college for about a year and 1/2, of course I took out a loan. Eventually I lost my job and couldn’t pay my tutition at school (Westwood college Calumet City, Illinois) and they told me I had to pay the tuition or stop going. This was back in like late 2006. Now it’s 2008 and I was trying to go to ivy tech, but i couldn’t get a loan through fafsa because of my previous one and I have a job now but it’s just so i can save up so my girlfriend and I can have a place of our own. After doing some research I found out I’m able to get my certificate for just over $2,000, but i’d probably have to end up paying cash. The people from EdFund have been calling me about repaying, but as of now I can’t and the amount they want me to pay per month keeps changing, it went from $250, to $150, now it’s $199, so i know there’s no set amount I’d have to pay per month. As I said the job i have now is just to save up before i move so we’d be settled and a while before we do move I’ll be applying at places. and of course I can’t pay back loans then while i have to pay rent, bills, food, and with the rise of gas prices that’s another burden. I’d hate to have to file for bankruptcy at the age of 22.

  54. SpaceCowgirl01 says:

    I planned ahead for this being poor immediately after college thing. I majored in Journalism and English. I could do a lot of things, but insisted on living in a big city with outrageous cost-of-living and wanted a job I liked, not one that paid well. So after doing lots of research (including paying very close attention during my government(I think?)-mandated loan counseling course prior to graduation, I signed up for interest-only loan payments for the next four years (from Sallie Mae, no less) until I become more stable. Or marry rich, whichever comes first.

  55. stinerman says:

    @mac-phisto:
    Ding Ding Ding! We have a winner.

    3 out of 4 years, I had an EFC of exactly 0. That means you qualify for every last government program that exists for education. Pell grants, state grants, subsidized loans, etc., I got them all.

    I graduated last year and am now ready to start paying back $40,000 in student loans … and I went to a state school!

    I’ll blame Ohio for having the just about highest state tuition in the nation, but the idea that the poor get everything for free simply isn’t true.

  56. evixir says:

    @ceejeemcbeegee: Why would any other lender want to take a chance on her when she’s not worked with her previous lender at all and in fact dodged any opportunity to communicate with them?

    I don’t have any helpful suggestions other than do what you can to make in-good-faith reparations with your lender, or at least start the freaking conversation with them. People who choose avoidance as a way to deal with their creditors are only digging their hole deeper in the process.

  57. Traveshamockery says:

    First, find out if you’re still dealing with Sallie Mae, or if you’re dealing with a Debt-Collection Agency.

    If you’re dealing with Sallie Mae, you should talk to them about some sort of deferment or other options to help you in paying back the loan in a more reasonable time period. This may not be an option, though, since you’ve (in their opinion) been avoiding paying this debt for a long time.

    If it’s a Debt Collection Agency, you may be able to negotiate to a lower payoff. GET THIS IN WRITING if they agree to accept a smaller sum. Then work out monthly or bi-weekly payments.

    I recommend picking up (or checking out from the library) Dave Ramsey’s book called “Financial Peace Revisited”. It touches on the topic of debt and repayment, and he suggests a “Pro Rata” plan for when your monthly payments outstrip your available income.

    Basically, you send your debtors a financial statement each month outlining your personal needs (shelter, food, health, etc.) and showing the remaining amount. If there’s one debtor, you pay them this amount. If you have multiples, you pay them their “percentage” of the debt – if one debtor is 80% of your debt, you pay them 80% of that remaining amount.

    This should keep them off your back while you work things out. Also, pick up a second job and attack this debt like nobody’s business!

  58. dandd says:

    Sorry, but you knew the terms when you took out your student loan. You also dodged them for a few years, are we really supposed to feel sorry for you?

    We should also blame these colleges for offering useless degrees. Do you know how many art students I personally know? They should honestly say, “here’s your art degree, get ready to be a manager at McDonalds.”

  59. redrover189 says:

    @nequam: I totally agree with you (I’m majoring in French, so I guess I qualify as having a “useless” major). As someone who spent her first three years miserably studying chemistry, I can tell you that it was much more valuable to me to study something I love – languages – than to study something that might get me a higher-paying job.

    I now speak Italian and French fluently and am learning Spanish. No, I’m not going to be a billionaire, but I hate the sentiment that if you don’t major in science or engineering, you’ll work at McDonald’s.

    And to dandd, my cousin and my best friend graduated last year. My cousin majored in computer engineering and my best friend majored in studio art. She currently has a job at a software development company in our area as a graphic designer. He is unemployed and having a hard time finding a job. I guess my point is, the major isn’t always the be-all, end-all that decides what you are going to do after college. I think a lot of employers look for college education as a sign that you committed four years of your life to something and followed through and that you have been given formal schooling beyond high school.

  60. Anonymously says:

    @nequam: I’m not saying your opinion is wrong, but I believe you’re in the minority. Most people I know went/go to college to get a (better) job.

    @dandd: I can’t blame her for the dodging. Sometimes people go through rough patches in their life where the only available way to cope is to run and hide.

  61. @stinerman: I went to an out-of-state school (tuition about 1.5 times in-state at Ohio), received the same from my parents as you likely received in grants (~$6k/year), and finished $16k in debt.

    What does this story mean? Nothing. Your total, my total, and xtc46’s total don’t bring anything to the table.

    That said, I agree that the belief that “the poor” get stuff for free and without working is flawed. It’s not true.

  62. @dandd: She never asked for your sympathy. Or your opinion.

  63. @lasereric41: Why’d he get his master’s degree and $50k of debt instead of a job? Oh snap, your example has nothing to do with your thesis statement. Not even close. See sean77.

    (Full Disclosure: I also got a master’s degree and extra debt instead of a job. But if it all goes sour, I agree to blame myself instead of the system.)

  64. Flame says:

    Ya know, I work as a bankruptcy paralegal, and I have to give a few comments about what a Chapter 13 really does. A Chapter 13 only works if you have a minimum income. The IRS sets the standard for a minimum income, and it is not a good idea to try and go for a Chapter 13 if you don’t have any disposable income to pay into it. And that still wouldn’t fix this girls situation. Student Loans are all but impossible to get rid of, as has been pointed out in this post. They are, in effect, non-dischargable. So, if this girl could fund a Chapter 13, and didn’t have any other debts that were paid as part of that plan, she would still not get it completely paid off. At the end of that plan, she would still have to pay them off. Let’s face it, this is one of those debts that she can’t get rid of. I would still tell her to talk to a bankruptcy lawyer though, since they might be more willing to help her negotiate with Sallie Mae. When the BK (Bankruptcy) laws changed in 2005, almost all of the BK lawyers got out the of the game. Most attorneys, if they don’t deal with collections themselves, don’t want to get involved in this. The other thing that might work would be to go to Debt Reduction Services, or a similar place, and see if they can’t negotiate for her with Sallie Mae.

  65. ShariC says:

    @oakie:

    Talking about how lucrative a major will be in the future job market is nonsense. A major that is a sure ticket to job security when you start college may not be one by the time you graduate. Also, college is about producing educated people, not trade workers. In America, it seems people think the only reason to be educated is for work. How about just so you’re a better person? If you want only to get a job, learn to be a plumber or some other job where you go to trade school or apprentice with a company.

    The OP said she had issues with emotional problems and security, not simply that she couldn’t find a job. The cold reaction some people offer smacks of those who had more choices than she did.

    If I were in her shoes at this point, I’d contact them via a non-traceable address (post box or whatnot) and see if a payment plan was possible, but I’d be very tempted to simply ignore it and wait until I could make payments more easily. You can always sock away any spare cash and have a lump sum payment in hand when you finally got in touch with them.

  66. thirdeye213 says:

    absolute worst decision I have made in my life was getting involved with ITT and Sallie Mae. I went 2 days and realized what a joke eduacation it was; I left a class and went directly to the Dean’s office to remove myself. Shortly thereafter I started receiving letters about the 6k I owed. and still owe…anything short of the lottery or proverbial rich dying uncle leaves me unable to pay them and stop the harassment.

  67. Grey_Tiger says:

    I work in the Student loan industry, and maybe I could offer a bit of advice.

    There’s a really good program that might be able to help her. It’s called the William D. Ford Consolidation. Basically the Department of Ed can step in, bring her loans out of default, and once they’re out of default, base her payments on her income and family size. The webpage is http://www.loanconsolidation.ed.gov

    You can file online, and all the documents you need to fill out are on the website. The 3 most important are all under the forms and publications page.

    Application and Promissory Note
    Repayment Plan Selection
    Income Contingent Repayment Plan Consent to Disclosure of Tax Information

    It doesn’t cost anything extra. In fact they actually lower your collection charges from 24% of the balance to 18.5%, so the balance goes down. You cannot be turned down for the program either. Just make sure you get all your paperwork done ASAP though. You only have 30 days from the time you file online to get the paperwork back to them.

  68. @TheBestMaxEver: Realistically, you could get about $150 per bj in the Phoenix area.

  69. bklynrickel says:

    another avenue to slavery.

  70. ELC says:

    @PirateSmurf:
    Yeah, RIGHT – let the guvment pay for it! And how many MORE idiots will flitter away 4 years in college on stupid degrees like Art, Music, etc? If you are an artist or a musician, you don’t need a college education. Go perform, do what you do, don’t waste time in school. We need more people taking up trades, skilled workers doing good work, instead of HS drop outs that can’t do anything else.

  71. ELC says:

    @nequam:
    Yeah, that works if your family is already rich and you just want to learn for learnings sake. The point of college, in THIS country, is to get ahead. That’s what EVERY college commercial, pamphlet, etc, etc, etc says. Are you asleep?

  72. B* says:

    I graduated almost two years ago now with about $23k in school loan debt, not counting what my parents took on (thank you shitty Ohio education system!). Thank god I was able to take that all out from government loans, but I still feel suffocated by it. I make my payment on time every month and I will still be paying for probably the next 10 to 15 years. Was it worth it? It seemed like it at the time. Ask me again in five years. I did get a good job out of college, but the bills really add up.

    If you’ve seen Sicko, Tony Benn talks about a very interesting theory of his wherein the government actually encourages debt. When people have debt, they are afraid to lose their jobs. When people are afraid to lose their jobs, they are afraid to protest and make a ruckus to better their lives. (For example, how many of us with full-time jobs can jaunt off to DC for a week-long protest of working conditions?) So, the government currently has no reason to fix our education system, and in fact has many reasons to allow universities to charge us even more.

    The solution? I’m moving to Europe as soon as we can afford it. At least my future children can have a better start in their adult lives. If we don’t get to do that, I’ll be running for president in 2020. ;)

  73. waitaminute says:

    No Exceptional Circumstances Needed for Student Loan Discharge
    Educational Credit Management Corp. v. Nys, 04-16007 (9th Cir., Apr. 26, 2006)

    Since so many of us are up to our eyeballs in student loan debt, there might be a lot of vicarious interest in this Ninth Circuit student loan discharge case. Lorna Nys owes $85,000 in student loans, up from an original principal of $30,000. She filed for a discharge, arguing that her income of $36,000 does not allow her to repay her loans, and that at the age of 51, she has no hope of making any more money in her dead-end job and will be in even worse straits once she retires at 65.

    The bankruptcy court found that Nys was unable to repay her loans but still refused to discharge them because Nys had not shown any kind of “exceptional circumstance” – like a disability or a sick child – that would prevent her from repayment. She’s just your run-of-the-mill debtor with a modest income, high loan payments, and a house that always needs repairs. But the Bankruptcy Appellate Panel reversed on the ground that Nys only needed to show that she could not repay the loans now or in the future, and the Ninth Circuit affirms. It remands the matter with instructions that the bankruptcy court apply the proper tests for remand.

    Student loan discharges are usually held to a very high standard, but this surprising decision opens up the possibility of discharge to many more mainstream debtors who don’t have a tragic story to tell the judge.

  74. Mary says:

    @CMU_Bueller: You know, as somebody who majored in a “risky” major and then has managed to keep my loans in order and pay them off at a reasonable rate, I resent a lot of what you’re saying.

    So I’m a film major, you think that means I should have a larger interest rate on my loan because I’m a “risk” because YOU don’t see what I could do with a film major?

    Not to mention the fact that just because I have a degree in film doesn’t mean that I didn’t just get a job in whatever I could when I was unemployed. Yeah, I could have bummed around L.A. waiting for somebody to hand me a job at a studio, but instead I actually cared about keeping my finances in order.

    Not every liberal arts person is an unemployed loan risk. Your major has NOTHING to do with it, your personality and your own sense of responsibility does.

  75. Snarkysnake says:

    I remember how we got here…

    When I matriculated,it became something of a parlor game for foreign students (notably Indians and Pakistanis) to talk openly about the thousands of $$$ they got from uncle Sam to go to school and then when they graduated,they were high tailin’ it back to the mother country… The U.S. taxpayer would be stuck for the tab and they would practice medicine or engineering etc.,and send their kids over here,wash ,rinse and repeat…To be sure,there was a lot of knowledge among U.S. students about reneging on their loans,but the foreign students had it down to a mathematical science.

    Is this still possible?

  76. @ericole: Nequam said “not everyone”. That only requires 1 exception. And no, not every commercial says that:

    @Beki: The government does encourage debt. It’s a problem that private lenders will give you all the candy you ask for (and tell you’re not getting a real education unless you go to Harvard). But it’s an availability problem: it’s up to the student to just say no, “I can’t afford taking out this much debt.” Unfortunately, it’s hard to foresee that when you’re 17. Let your children know that one can take a break from education at any time, work a couple jobs, go to a cheaper school, go to community college for the first few years….

    Maybe in 10 years or so, the economy will collapse again because of the sub-prime-student-lending crisis (or if we’re lucky, Sallie Mae will collapse in this round). Redirecting the subsidies to lenders is a good start.

  77. @Snarkysnake: No. In fact, that’s an unsubstantiated assertion and totally irrelevant.

  78. @ericole: High school dropouts can’t get into college, generally speaking. But if nothing else, you did demonstrate ignorance by equating art and and music majors with high school dropouts.

    Just because it’s free doesn’t mean they’ll let everyone in: the number of people a major will enroll is related to the number of graduates that field needs. For example, music performance (a minority of music majors) is highly selective.

    Please do some research about what various fields and specializations actually entail before you carelessly call vast swaths of them “stupid”: What can I do with a ____ Major?

  79. nygenxer says:

    I went into electrical engineering and computer science ‘cuz I figured that just about everything runs on electricity and has a computer chip in it, so how could I go wrong? The top two worst professions to be in? Electrical engineering and computer science. Ah, outsourcing.

    EVERYONE supports education. It is the way by which the government (us) invests in its own people for a wealthy & prosperous middle class (see the GI Bill of WW2.) The citizens themselves are now being tasked to carry this risk alone, and the result is 21st century version of indentured servitude.

    Previous comments have pointed out that an indebted workforce is inherently fearful of unemployment since the loan will not be discharged EVER (there is no statute of limitations on murder, rape or student loans). While this is very true, it misses two points.

    First is the corruption by business interests around the student loan program ostensibly designed to help people achieve a higher education. Private interests charge exorbitant fees for no-risk government backed loans. [A great deal of the current fiscal meltdown involves trading bundled loans, and since payback is government assured, these are the best loans for banks to trade.] Think about it: exactly why should private investment groups be allowed to make ridiculously high profits though the non-risk government-guaranteed loans of a social program?

    Secondly is what the government learned in the 1960’s: why should tax money be spent to educate a populace that will only then question government policies? Follow the amount of grant money and collegiate costs and they both skyrocket after the 1960s and the social upheaval of the civil rights, woman’s rights & Vietnam War protestors. NOT a coincidence.

    George Carlin says it best:


    + Watch video

  80. Snarkysnake says:

    @Michael Belisle:

    No,it’s not unsubstantiated. You don’t know what you’re talking about .I have seen this myself. This happened not a few years back.

  81. mariser says:

    first, I got lucky: went to state school, worked, and had some money come my way from the sale of my family home. so I got out without debt. sorry for all currently struggling.

    @snarkysnake, I’m puzzled. I have no idea how these foreign students got “thousands of $$$ they got from uncle Sam to go to school” when government/federal loans aka uncle Sam, are restricted to US citizens and permanent residents.

  82. lawstud says:

    Basically undue hardship has to be because of a permanent change in earning capacity that is beyond your control. Need to demonstrate physical, mental, emotional and/or psychiatric disabilities or impairments preventing one from working. Not market conditions. Also, being old during repayment is irrelevant, it does not matter if repayment goes on after you retire and into your 70’s.

    You must show that you have “repaid the loan over the entire time period from the date on which the first loan payment became due to the date on which the debtor filed his bankruptcy petition.” In re Cehula, 327 B.R. 241 (2005). You need to show you take the payments seriously and have done your utmost to repay them.

    The financial difficulty has to be beyond your control and not caused by your negligence or willful default.

    The Dept. of Education has added the Income Continent Repayment Plan. Because of this plan you now have a much harder time arguing “undue hardship.” You should try to use this plan.

    The court also looks at the ratio of loan left to be repaid and what has been paid. For example trying to discharge 70% of the debt was found not to be in good faith.

  83. That70sHeidi says:

    @levenhopper: Wrong.

    In fact, the way I found out about my bankruptcy being cleared was via a mailer from a car dealership congratulating me and offering wonderful deals for a leasing new car. It arrived before the official court papers.

    Since then I’ve received almost non-stop pre-approved offers for things – credit cards, mortgages, vehicles, even catalogs with pre-approved store credit! They may not be the wonderful sparkling deals offered to the average consumers, but businesses are still more than willing to contract with me and take my money. Two years out from my bankruptcy and I have one [active, new] credit card and remarkably good credit. Yes yes, woe to me, my life is… oh wait, NOT ruined!

    See, my bankruptcy lawyer talked with me about what happens “afterward” during our meetings. Obviously you’re misinformed and are not speaking from experience, so now you can stop perpetuating the horrible boogie man stories. Myth busted.

  84. firesign says:

    @sean77: education is not free. you pay for it in taxes. it’s just mandatory as opposed to optional.

  85. firesign says:

    @firesign: i should amend that to say k-12 education.

  86. the_wiggle says:

    @PirateSmurf: or at least reasonably priced. and reasonable does not equal the absurd amounts being charged right now.

    1 sided victim blamers: RTL. lack of emotional stability often seriously aggravates financial stability as the persons ability to function is impaired.

    @stinerman: EFC?

    @nequam: bingo & well said.

    @goddesssparkle: “First off, I agree that education should be government subsidized. Those who carry on about taxes just don’t get it. Having a better-educated population makes the nation and economy stronger. I’ve traveled extensively and lived overseas: the countries where education is a given if you’ve got the grades are much better off. If the US doesn’t catch on, we will be left by the wayside as other economies and nations progress more rapidly.” Excellent points.

  87. PermanentStar says:

    I wasn’t able to. I owed them 7,000+ based on my own stupidity (I took a medical leave, and was under the impression that I wouldn’t have to start paying the loan back till I finished school, but was dead wrong, and then defaulted) They told me they would let me pay $88 every two weeks, and I supplied them with my bank information, and the proper signatures to do it, and they didn’t do it, tacked on some fees, and garnished my checks. I now get roughly 40% of my checks if I’m lucky after my taxes, insurance and the garnishment, which leaves me very little to live on. I also cannot go back to school until the garnishment is done, because since a student loan defaulted, I am not longer eligible for state or federal financial aid – and they automatically get my tax refund (I don’t even know about that stimulus thing, but I imagine that goes to them, too)