I was in Napa yesterday, so I was drinking wine and definitely not writing about anything, so here’s something completely unrelated. Student loans! This is crazy long with lots of thoughts at the end. Buckle up!
As I’ve mentioned before, I have them. Lots of them – enough to buy a nice house if you really want to vomit in your mouth a little bit. And they are with several companies. It’s kind of a mess and I can’t really fix it at this point (I can’t consolidate them with one company and the banks I originally borrowed from all sold the loans to different companies). I want to explain a little bit how I got here because unless you have a zillion student loans, it’s kind of hard to understand. And this is specifically in response to the news that ol’ Betsy “Grizzly Adams” DeVos is rolling back consumer protections for student loan borrowers. Thanks billionaire lady for standing up for the little guys and gals! Anyway, I want to share my story because I frequently meet people who don’t know anyone with student loans or they don’t understand how incredibly complicated and shitty it can be.
When I was an undergraduate, I was extremely lucky because my parents invested in the Texas Tomorrow Fund which was a prepaid college investment program that meant I didn’t have to pay any tuition for my bachelor’s degree. My mom went back to school to pursue her master’s degree when I started my bachelor’s, so I used student loans to pay for fees, books, and living expenses (because even working 30-40 hours a week for $5.15/hr. wasn’t enough to cover that). I also took a lot of hours each semester and in the summer sessions so I could graduate in 3.5 years (so I could start graduate school sooner).
Yes, she did. I paid for my master’s degree with loans (and a partial scholarship) and used them to supplement my income because I was aiming to finish my master’s degree in a year and a half (it required a semester of student teaching (unpaid of course) and an extra 12 hours for special education certification). I was desperate to finish ASAP because I needed to start working a real job. And this is where I foolishly stumbled into the area of private student loans.
I always accepted my financial aid package and never gave much thought to it beyond that other than telling myself that taking out loans was what I had to do to finish school.. When accepting my federal financial aid package, there were also options to get private student loans. I didn’t realize that taking out private student loans through banks directly (as opposed to borrowing from the federal government through a bank as it was in 2007) would be DRAMATICALLY DIFFERENT when it came to paying them off. I didn’t bother to research it and the differences weren’t obvious, so I accepted a bunch of those too. I just thought they were the same as my other student loans, and I needed them to pay for school. I take responsibility for this.
I taught fourth grade while I finished up my master’s degree, but quickly realized that it wasn’t for me. I loved the kids, but didn’t enjoy having to read the curriculum out of a book for four hours a day (Thanks, Voyager!), and couldn’t deal with the helicopter parents (which provides some fantastic irony considering my office is now practically a helipad for upset parents). I was in the six month loan repayment grace period at that point, and as I started working on paperwork for repayments and making a budget, it dawned on me that I needed to make more money. The $26,000 salary for teaching (the offer I received from a small town near where my parents live) wasn’t going to do anything to pay off those loans. I also missed working in higher education.
After very little research (WHO WAS I THEN??), I decided that I was going to move to Corpus Christi, apply and gain entry into their doctoral program, and get a job. That move is probably the craziest thing I have ever done in my entire life.
Again! I spent that fall semester applying for the program and was lucky enough to get a real job working at the university library. And for that full-time job I was paid a whopping $18,500 (The irony – it strikes again!!). I got into the program and again had to take out loans because as you can imagine, a monthly paycheck of $900 doesn’t go far when you have rent and bills to pay, and you also like to eat food at least twice a day. On the bright side, another round of graduate school allowed me to defer my loans again.
It felt that way at the time. Anyway, I took out private loans because my federal aid package was tiny and graduate school is expensive (The books! MY GOD the books! And I HAD to have a laptop. WTF?).
I took the same path as my master’s degree and took 12-15 hours per semester, enrolled in summer school, and tried my best to get my butt out of there ASAP. Three years later, I graduated with a mountain of debt. Thankfully, by that point I had moved up professionally to a job that paid me $40,000 which honestly seemed like a billion dollars at that point. At least until six months later when my loan repayment began.
I have had nothing but pleasant experiences with my federal loans. The people I have talked to have been nice and helpful. They worked with me when my repayment plan application got messed up, and they have allowed me to skip payments for extenuating circumstances. They’ve never messed up a payment and they’ve provided me with multiple repayment options that they actually took the time to help me understand. I am thankful to Obama and his administration because I saw firsthand how his policies shaped my borrowing and repaying. When I got loans for my doctoral program, I had to go through loan counseling. I finally understood what kind of money I was borrowing and what it would take to pay it back. He also established the Public Service Loan Forgiveness Program and, if Donald & Co. don’t totally eff it up, a majority chunk of my loans will be forgiven in 2021 (it will come out to about 40% of the current balance of the federal loans if all goes as planned).
My private loans have been a damn nightmare – and that is with the actions that the Obama administration took to protect consumers. I use automatic monthly billing for my loans because one month many years ago I just forgot to pay one of them. That is totally my fault and I have no idea how I forgot, but I did. By the time I figured it out, not only did I have a huge fee to pay, but they had cancelled my income-based repayment plan (because missing a payment nullified the agreement apparently) and my new payment was four times what is was before. So, from about $200 to $800. After months of calling them several times a week, I was finally able to get back on a plan. But, when your monthly salary is just over $2,000 and you have other loans to pay too, $600 extra is ALL THE MONEY.
On multiple occasions, they have taken my automatic payment that is supposed to be applied to multiple loans and applied it to only one, then charged me late fees for the other loans that didn’t get paid. Even though I made zero changes to the payment and they are the ones who messed up. Do you think I got refunded for those late fees?
I’ve been told that I don’t qualify for certain repayment plans when I do (guess what asshats, I CAN READ), I’ve been taken off plans for no reason, and had a payment go from $234 to over $900. They’ve also drafted the wrong amount for my automatic payments more times than I can count. Multiple times my loans have been sold from one company to another only to have the new company screw it up or the former company send my account to a collection agency because I had stopped paying (I NO LONGER HAVE LOANS WITH YOU, ASSHOLE).
Someone once wrote a comment that automatic payment arrangements don’t transfer. Yes. Yes they do. Not once have I had to set up a new automatic payment when my loans have transferred. This is dangerous because several times my loans have been sold before I received a letter telling me it was happening. You know what rarely transfers? The actual repayment plan I’m on. So, again, I get a big ol’ surprise when that much higher amount is drafted. Thankfully, I recently managed to get away from Navient (who are THE MOST COMPLAINED ABOUT) who did this most frequently, but to those dickheads, all I have to give is:
The way they calculate repayment plans are a nightmare of their own which I wrote about here. It is great and all that the federal government caps repayments on 10% of your income, but it would be cool if all loan companies had to consider other student loan debt when calculating your repayments. Paying over $500 to three companies in one month IS NOT FUN. It’s doable (as doable as paying over $1500 a month to something that isn’t a house payment or vacation can be) on my current salary, but four years ago it was a real nightmare.
Betsy DeVos messing with the few protections that exist for student loan borrowers is personal because she and her husband are investors in Performant Financial Corp. Last spring, I complained that a loan company was harassing me at work, on my cell, via mail, and even calling my parents claiming that I owed TENS OF THOUSANDS of dollars in back payments from loans I took out in 2005. They threatened legal action against me and were total assholes. Guess who that company was? PERFORMANT FINANCIAL CORP.
I finally sent them a letter requesting the copy of the judgement against me and they went away. Briefly. In February of this year they were back. They have called my parents and work more times than I can count despite numerous requests that they not (you know, and also that they not call at all since I don’t have any loans with them or a loan company they own). Even though I owe them nothing and all of my loans are paid on time, it is endlessly embarrassing to explain to people I work with why they keep calling. And they have called ALL OVER CAMPUS even though they have my work number. I find it endlessly disturbing that a woman who has never had student debt and who has invested in a company that harasses people is now in control of student loans. And these people show up in my life every 4-6 months, and they called me FOURTEEN times this week. The changes she is making are going to ruin lives:
She’s is working to rehire four debt collections companies that Obama fired for allegations of misleading borrowers about their repayment options (this has happened to me and I have the emails to prove it). She’s also repealed the ban on high fees that can be charged to those who default on loans. Here’s a thought, if a person can’t pay their loan, then they sure won’t be able to pay the added fees. I absolutely believe that it is the responsibility of the person who borrowed to pay it back, but it shouldn’t be such a complicated and moving target. Trump initially made several statements about student loan repayment that would help borrowers, but his hiring of DeVos makes those ideas seem a bit down the toilet now.
It is unreal to me that these lenders (and our government!) are making millions of dollars off of student debt. I am thankful that I had access to financial aid because I wouldn’t have degrees without it, but I never could have imagined what private loans would mean or what an ongoing nightmare it would be. I have the resources and ability to deal with these companies and make my payments, but so many people don’t.
I also don’t ever advise students not to take out loans. If you need financial assistance to complete your degree, then do what you have to do. I do warn them against private loans, and Lisa and I both spend time with our own student employees helping them understand what repayment will look like and what their options are. Our Student Affairs division is building a financial aid tool that gives students a better picture of what their overall debt looks like as they borrow throughout school and how much money they have left from scholarships and their Pell Grants. We hope that this will encourage students who are able to take 15 hours (we all know that 15 hours is not a responsible load for all students) and to get through school in a more expedient manner (because every extra semester costs you money in paying for school and in loss of potential wages). You won’t get to be a teacher without a degree, so sometimes you do have to make hard choices and those choices mean debt. Anyway, I’m not saying that students shouldn’t take out loans, but it should be easy to understand what kind of money you are borrowing and how you will pay it back.
I also don’t mean to sound like I am whining about having to pay my loans back because I’m not. I am whining about how confusing, complicated, and messed up it is ALL THE TIME. I often find that there is a lack of empathy toward people with student loans (particularly from friends and family who did not need a four-year degree or graduate school to have a stable job), but I always ask people to imagine what it would be like if it this was happening with your mortgage. Yes, you borrowed the money and you have to pay it back, but what if your payment was unexpectedly doubled several times a year? Or if the lender drafted the wrong amount out of your account, then charged you a huge fee for it? Or if they sold your loan to another lender and decided to change your mortgage payment without you knowing until after it happened? Or if they messed up the records after they sold your mortgage loan and constantly called everyone you know to demand they make you pay? Then, what if it took you six months to get your mortgage back down to the original payment you were paying? Six months of paying two or three times more a month for your house. THAT WOULD SUCK.