Cryn Johannsen has posted some frightening student loan testimonials on her blog, Education Matters. The testimonials are excerpts from her new paper, The Plight of Current Borrowers: An Appeal For Immediate Relief. Here is one story of how one woman tried to utilize higher education to improve her life situation, but got buried in a mountain of debt that has caused a lot of pain and heartache, in addition to that caused by health problems:
Today I am 46 years old...I had no idea what I was getting myself into when I took out student loans to finish my BAI'm sure there are many more stories like this one floating around out there. Stories of real people who buy into the dream of higher education providing them with pecuniary returns, only to be sadly disappointed. This case reveals that there are in fact diminishing returns to higher education.
I went on to get my Master’s 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, I 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 a nightmare for the next seven years. This was before the regular 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 someone’s 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 for 7 months in 1999 – (once) again, deferment, hardship forbearance, more compiling of interest.
I wanted to go into the NHSC (National Health Service Corps) which is a program for health professionals to go into public service into rural, urban (low income areas), or prisons to work for a period of time in exchange for loan forgiveness. I had a license in Michigan, but they changed their policy and you had to already have your national independent license.
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 [sic] 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.
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 worker’s 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 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 the dark . . . I can never get good credit rates because this $160,000 shows up on my credit.
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 having to worry about defaulting and having my social work license taken away, and then I can't work. I still have nightmares about this.