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. :(

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

@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.

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.

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!

@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.

@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.

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.

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.

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..

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.

@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.

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.

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.

@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.

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!!

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

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.

@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.

@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.

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

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.

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.

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

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

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.

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

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

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.

@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.

@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.

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...

@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...

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).

@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.

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

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.

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.

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

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

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!

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"

@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.

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

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.

@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.)

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.

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?

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?