Do you know how many times I have seen this trend on TikTok? “What’s a scam that’s normalized…”
Not once have I seen one on school loans.
If you went to college, you probably have them.
If you were low income, middle class, or even upper class, you probably have them.
And if your parents were uneducated on the school loan system, which did not even begin until Lyndon Johnson’s presidency in 1965, you probably have them.
The Background
My mom was born in the United States in 1947, and my dad was born in India in 1949. Neither of them needed to have school loans. My dad has a Master’s degree, and my mom was a few classes away from completing her Master’s degree.
Growing up, we were low to middle class. My dad immigrated from India in 1982 and became a citizen in the late 80s. My mom encouraged me to go to school. She didn’t want me to rely on a spouse because my dad was abusive and controlling. Grants and scholarships funded my college career. There was no leeway in making mistakes in college. I had to fight to make every single grade, all while working almost full-time, taking care of my younger sister, and my mother being in the hospital for the last year of college.
Well, I completed college and earned my BA. I got a job paying $12 an hour, which was a $3 raise from what I was making working in the food service industry as an assistant manager. At the time, I lived in a HIGH cost of living area of Southern California. Twelve dollars an hour and actually doing something I went to school for? Sold. I worked two different jobs, eventually making $13 an hour after earning my Bachelor’s degree and having two years of experience in my field.
College Degree
My mom passed away after a battle with cancer, I needed something to do with my time and a better way to prepare for my financial future. I returned to school for my Master’s in Marriage and Family Therapy. Awesome, I met with the enrollment counselor. She made it sound so easy – apply, get in, and take out school loans to cover the cost since I couldn’t front $40,000. I can pay it back when I am out of school and increase my payments as I make more. Sounds like a dream, right? Wrong.
I talked to my then-boyfriend about it, I was 23, and he was 19 (yeah, cradle-robbing, scandalous, whatever, get over the age difference), and he was supportive. His mom and dad were blue-collar workers and never went to college, so we did not know anything about school loans. My family was my dad and little sister, who was six then. My dad made it clear that he did not support my decision to go into social services. He said it was a waste of time. Clearly no support there, and even if he was supportive, he did not know anything about school loans.
I busted my booty all through grad school, working full time, raising my little sister, getting married, and moving away to my husband’s first duty station. It was so hard, and I wanted to quit. I took 18 classes over three years in person once a week. Of all those classes, I had 2 B’s and the rest A’s. I was proud of myself.
When I graduated, I applied for my internship and got a job making $14 an hour as a master’s level therapist at a group home for foster children. I worked there for over four years, earning only a fifty-cent raise during that time. Whoa. I know, don’t get too crazy there. If my husband was not in the military and we did not get a housing allowance, we would have been living with roommates or in a shack.
Six months after starting my job, I received my first bill for my school loan repayment.
How much do you think it was?
$800!!!
Trying to Pay Off School Loans
I almost fainted. I was GROSSING $2240 a month. That was about a third of my income. They only based this amount on my income too. My husband’s income was not factored in yet. I dutifully made payments every month. I called to try and adjust the amount I had to pay. And, I tried to tell them it was not possible to afford this high of a payment. There weren’t any options offered to me – no income-based plans, no pay-as-you-earn plan, and no public service loan forgiveness plan. I paid month after month. Every big purchase was planned around my loans.
We decided when I was 28 that we would start trying for a baby. That’s great, right? Wrong. I went on disability and then FMLA. I called to negotiate my loans as I was earning less on my disability and FMLA. No, they could not do anything except put me in forbearance, where your payments freeze, but your loans still collect interest. Sounds ideal, right? Wrong again. I could have deferred them with no interest if I was on food stamps or WIC or some other type of government assistance. Alas, I was not, as we made just a little too much to qualify. You know, with the high-paying military job my husband had and myself making $14 an hour.
Deferment vs. Forbearance
Here is the difference between deferment and forbearance: “During a deferment, the federal government pays the interest on a subsidized loan, but not on an unsubsidized loan. During a forbearance, the federal government does not pay the interest on either subsidized or unsubsidized federal student loans.”
Well, I obviously had to put them in forbearance. Also, my husband was being medically separated from the Marines, so we were losing his income. I returned to work three months after having my daughter. Now we had child care to contend with, which was about $600 a month. So, of course, I kept my loans in deferment as I had no resources to pay them. I would call numerous times, begging them to lower my payment somehow. I did want to pay my loans, I don’t like debt, and I take responsibility for my choices. Then I finally spoke to someone who was able to get me on an income-based plan of about $450 a month, and I made my payments dutifully.
Trying, Trying, and Trying
Then we decided it was time to leave our area near the military base and move back home. I found a new job making $18 an hour, and I was elated. We wanted to buy a house because rentals stink, and we had already been renting apartments for years. It seemed like the right time to buy. Right? Again wrong. We were backed into a corner. My husband didn’t make enough to qualify for a loan by himself. I made enough to get a home loan with him as we used his VA loan (zero down and no mortgage insurance needed). Then we found out that because of my school loans, I would not qualify because my debt to income ratio was too high. My school loans backed us into a corner on buying a house.
So we rented. For the next five years, we lived in a rental, had two more children, and quickly outgrew our house. Plus, it was starting to become a not-so-safe neighborhood. I had to continue deferring loans as raising three children plus childcare was insane. Raising a family was a lot of money. I started making more, and even with three dependents, I was paying $1100 a month. A MONTH!!!! Yes, they did factor in my husband’s income with this payment.
Also, when I spoke to coworkers and colleagues, they paid less than me on an income-based plan. I was blown away. I would call and beg to change and lower my payments. Nothing changed. I tried doing the Public Services Loan Forgiveness, and I did not qualify. I jumped through all the hoops.
The Crushing Weight of School Loans
Yet my balance owed kept increasing. I have made 198 payments, and I still owe $107,000.
How? I want to know. How did it go from borrowing $40k in 2007-2010 to one hundred thousand dollars by 2020 and already after making 198 payments? The interest rate fluctuates. They have been transferred from Sallie Mae to Navient, then consolidated, transferred to My Fed Loans, and now My Fed Loans is no longer serving student loans, so they will be transferred once again. It is impossible to keep up with who does what regarding these loans. I feel like they just transfer from company to company, and it is a way to manipulate the borrowers (like me) into not understanding this process.
All the time, I see people post things that say, “well you knew what you got yourself into with loans,” or “we shouldn’t pay back what others borrowed because they were irresponsible.” I in no way went into this blind. I intend to pay it back. And, I want to pay it back. But no way in my lifetime can I pay $107,000 back and raise a family and live.
When the pandemic hit, former President Trump froze school loan payments with no interest. My husband and I jumped with relief because that $1200 a month could be put towards paying off other debt, which we did and saved like crazy. Then we realized California was no longer a place we could afford to live, and we moved out of state. The only way we were able to move and buy a house was because my loans were frozen, so they did not tip the debt-to-income ratio. We finally bought a house—our dream. We have been planning for the loan repayments to start at the end of the month, which will be $1200 a month or so. I have not received the final numbers.
Is There Anything You Can Do?
Another perk of the pandemic was that President Biden changed the restrictions on the Public Service Loan Forgiveness program. This means if you make 120 on-time payments (also now including the months you were in deferment and forbearance) and worked in non-profit or government jobs, including the military, you can go back and have those years of employment count towards your time. You have to basically work ten years in a non-profit or government job and make 120 on-time payments.
This was NOT made very public because I only heard about it through a colleague. This program ends on October 31, 2022. I highly encourage anyone who wants to know if they qualify to look into this program. I applied by contacting all my previous jobs to get their information and have them sign off on the forms. After I emailed everything in, I got multiple letters saying that my forms are processing. I currently only have four payments that count out of the 198 I made. I am praying the rest of my payments count. So much weight would be lifted from me.
Here is the link if you are interested.
I have worked for 13 years in non-profit organizations assisting clients that cannot afford my services any other way. And I have seen and heard terrible stories of child abuse, domestic violence, and sexual trauma. I worked these jobs because it is my passion to help people. I want people to heal. And, I want people to succeed. I just couldn’t do it anymore, though. Finally, I had to choose my safety and my mental health, and my family over working for non-profits. I could not do it anymore. I also should not be locked into a non-profit just to pay my loans back. And, I also don’t feel like I should have to be broke, and my family impacted because of school loans when I was only trying to better my life, my family’s life, and the life of others.
I know my calling is to help others. I know so many others that are severely impacted by school loans drowning them. It’s ridiculous. It feels like a chain around your neck for the next 25 years. Twenty-five years of paying $1200? That is a house payment. Two car payments. Groceries and gas for almost a month.
If I had to do it all over again, I would not have gone in blind. I have talked to anyone and everyone I know going to college and educated them on school loans and the stipulations that come with them. I also made sure to tell my sister about it. And, I don’t want anyone else to feel this pressure and have this black cloud hanging over their head for the next 25 years. It is not worth it. I would have paid tuition while in school (with no interest), or I would not have gone to school at all.
If school loans have impacted you, I highly recommend you look into this program. There is also this Facebook group that people have started to help others figure out this madness.
