My Student Loan Horror Story

Today I am 47 years old. I was 22 when my father died suddenly in 1985. I had no idea what I was getting myself into when the school told me I had to take out student loans to finish my BA at a college in Michigan. Let me preface this by saying I have never been in default and I have always believed in paying back what I borrowed.

Telling my story is important because many people do not understand how the student loan business has turned into a predatory lending industry that rivals Wall Street. There are no consumer protections, and no limits. I have come out of hiding in the hopes that people will read this and start to understand why we need help. It's not just the twenty-somethings. Us forty and fifty somethings are really hurting too.

I was majoring in theater and wanted to teach, but I was advised by the college to get a "real career", so I took out more loans and added a BA in Psychology.They told me not to worry, I could pay these back. I worked three part time jobs, and moved off campus. In 1985, there was no" loan counseling", there were only appointments for loan signing.

When I took out student loans I was going through chemo for cervical cancer with no health insurance, my father's sudden death in 1985 and my family went though being very wealthy to losing everything and being left a half a million dollars in debt.Could I have switched schools? Quit school? I don't remember what I was feeling or if I read every detail of the loan; I think I was just trying to get through my grief and my chemo a minute at a time.

I went on to get my Masters in Counseling Psychology, which was paid for by my employer,Thank God. I found to my dismay, that I just couldn't make enough money on a salary of $25,000 as a counselor to make the loan payments and take care of everyday life. My cancer in 1986 left me thousands in debt. In 1991, ended up filing a chapter 13 for my medical bills. Subsequently, a woman at Wachovia Bank noted this, and accidentally put my loans in default instead of deferment.

My life became nightmare for the next seven years.This was before the everyday use of computers. I was on the phone for hours on hold, but I couldn't get anyone to talk to me. Creditors treated me like a leper. I was actually told by a well meaning person that" Your loans have been bought and sold so many times, they are probably in a shoe box in someones closet."

Finally in 1995, after getting nowhere, I contacted the US Dept.of Education. I literally sent them a shoebox full of notes about my conversations and letters I wrote trying to ask for help. They eventually tracked them down and subtracted the penalties, but not the interest, so my $25,000 turned into $45,000.

I tried to make the payments on a counselor's salary, even on an income contingent plan or any plan I could find, but it was too much money on $28,500 per year. I made payments whenever I could afford to but they never seemed to count because they were never enough to cover even the interest. My payments were more than my rent! I have deferred and been in forbearance so many times it's not even funny.

I had to declare bankruptcy again in 2000 due to lack of finances and everyday living, and ongoing medical issues with my cancerous nodules on my thyroid which prevented me from working in for 7 months in 1999. Again, deferment, hardship forbearance, more compiling interest.

I wanted to go into the NHSC (National Health Service Corps) which is a program for health professional to go into public service into rural, urban, low income areas and prisons to work for a period of time in exchange for loan forgiveness. I was a Limited License Psychologist in Michigan, but they changed their policy and you had to already have your national independent license, not just a license in your state.

I couldn't afford to stop working to get my PhD, so after 10 years of getting nowhere and the threat of default, I went back to school at age 41 in 2004 and got my MSW so I could be in the NHSC. This was not something I wanted to do, but I wanted to get my loans repayment and I already had devoted my life to public service, it seemed the logical thing to do. Another Masters would increase my loans, but I could pay it back through this program.

During this time, I was able to buy a house on an FHA loan, but was one of the victims of the refinancing scams of 2006, and although my house went into foreclosure, I was fortunate enough to sell it in a short sale through Freddie Mac.

Right after graduation I was able to secure a job in Arizona for the NHSC. I had to go out there as they make it extremely complicated to get accepted, and Michigan virtually had none of these jobs with a high enough need number to guarantee loan repayment. I had to reconsolidate my loans were now 140,000.

I sold everything and went out there, thinking that I would finally be free of this monkey on my back! It was not to be. The NHSC passed a policy that if you have any bad credit that involves federal loans, you can't serve your country and get your loans paid back.Even if you have good credit again and/or straightened the situation out!

I was and still am absolutely devastated.Because I had a foreclosure on a FHA loan even though I sold it in a short sale, they wouldn't take me! So now I had another degree and no way to pay it back!!!

There were years that I didn't pay- Even loan counselors told me it was better if I went into forbearance than make payments that couldn't even cover the interest because then I would have compounded penalties.

I have new student loans and consolidated them. Now, my loans have ballooned to 160,000. I can't afford even to make the smallest payment because I wasn't making enough on a social workers salary. The whole thing is insane.

I put off and sacrificed most things people my age have; a family, vacations, stocks, savings, investments, retirement and most of all children; because I had to to pay my loans. My friends have watched me save and scrimp and never get anywhere.

There were times I had to decide whether or not to buy food or pay my loans.Pay the heat or pay the loans. Get my medication or pay my loans. Eat rice and live in dark. They have watched me stress out and become depressed over this. I can never get good credit rates because this 160,000 shows up on my credit. They have watched me be in a career I was never sure I wanted because I had to try to pay my loans.

I just got married and have Lyme disease that damaged my neurological system and I have not been able to work full time. My medications are really expensive.

There is no way I can even attempt to try to make the full payment it's like a mortgage payment. I have had to declare bankruptcy twice (due to the start of cancer on my thyroid.) and the only way they would be forgiven is if I was completely disabled or dead. I have to take a job that is close to home due to my health and we are in rural Maryland!

I have been made to feel like dead beat. I have felt very ashamed. I feel as though I can never get ahead. It would be nice once in my life to have some nice things, or not always worrying about defaulting and having my social work license taken away, and then I can't work. I still have nightmares about this.

This July 2009 they finally passed legislation for income based payments instead of income contingent. I want nothing more than to pay my loans off, I am grateful I was able to get an education, but I cannot afford almost $1000.00 per month, and the penalties that accrue if you don't pay the full amount to even cover the interest. Even if i get a great paying job, most of the money will be go to student loans. This is a very complicated situation.

I thank God that he saw me through all of this. I also thank God that I found Cryn and her movement, "The Endentured Educated Class". I am working part time now and on the Income based program where as of now I pay $50 per month. I wish I could do more.

In closing, it is my hope that when people read this, they understand I am not asking for a free ride-only a just one. I am requesting that with the new public service forgiveness legislation, that my 23 years of public service be taken into account and allow for my forgiveness to be retroactive.