Submitted by WI Will (not verified) on July 2, 2009 - 3:04pm.
I know there are people that will say, in hindsight, with 20/20 retro-vision, I could have done this, and I could have done that. I agree, but know that in the story that follows, I could not see the future, and everyone, but EVERYONE, from friends and relatives, to school counselors, thought my choice to seek a private law school education was the RIGHT thing to do, I went in in a boom lawyer market and was going to a good school. But then what happened is what I call my pathetic story....
I am the first in my family to graduate with a four year college degree. Not only did I finish my first four year degree, I went on to one of the nations top law schools and now I am working on a Masters in Health Administration. It would look like this is cause for celebration, another American success study, lower middle class citizen rises through the social and economic fabric through the boundless opportunities provided in America. You would think that I should be a truly accomplished individual with a great job and incredible prospects. That is at least what this type of education was supposed to bring when I started my adventure in education in 1983.
When I graduated with my four year degree, there was not a lot of opportunity in Hawaii, and I thought I was smart and I was definitely ambitious. So I took the MCAT (medical school admissions test). I matriculated into medical school. It was a small relatively inexpensive state school. However, I was not real good at biology, and I struggled for three years. In addition in 1986 everyone was saying that we do not need more physicians and that managed care would make everyone a salaried employee. So I tried taking the LSAT and did phenomenally well.
I was accepted into two of the top 15 law schools in the country. For a lower middle class/middle class person like me these acceptances seemed to be truly great opportunities. I read all their recruiting brochures, and it seemed anyone graduating with a decent GPA would easily get a job in a large or medium firm, or even some corporations and earn $70,000 to $80,000 a year which was good in early 1990’s. The promise seemed to justify the marginal appearing risk. I graduated with a B average, but had no job waiting for me. You see we were in another recession and all the corporate merger and acquisition craze had just ended. The big firms did not need lawyers and the corporations were cutting back. Only the very cream of the top made it into the lucrative job market and the rest of us were left hanging.
What I did have was a total of 80,000 in Stafford, private and school loans. So I stalled, I got into a post graduate law program for six months, which increased my student loan balance, but put off payments. Back then I was looking at a monthly payment of 700 to 800, and no job in the offing, I took my in-laws advice and with their help opened up my very own law practice. I was able to find a way to make payments on the loans for several years (though only a year of profit in my practice). Then my in laws got sick, my mother in law and primary supporter of my practice died unexpectedly in 1997, my father in law, a renowned local dentist developed Parkinson’s and lost all his money to a scam artist; the housing market burst, and my wife left with everything of value in her mother’s estate.
With no source of client referrals and without a continuing equity increase in the family real estate to create cash flow, my fledgling law practice crashed and burned in 1998 and 1999. No surprise I suffered depression and dropped off the grid for a couple of months, well maybe it was more like a year to eighteen months, working as a tour guide, car salesman, insurance adjuster and other such odd jobs. My entire life, family and support structure that I had relied on for ten years had disintegrated. In 2000 I got help at my church in the form of counseling, then saw a physician/pastor and began treating my depression. In 2001, with the help of a well meaning attorney who was older and beginning to loss his competence, I filed bankruptcy. Too bad my attorney did not see the legislation change coming down in 1998, he might have been able to help me file much earlier and avoid the mess I am now in. By then of course Student loans had become non-dischargeable (except in cases of extreme physical disability or death). I remained under or un-employed for years, though I was seeking employment everywhere I could think (literally thousands of job applications and recruiters contacted). In the beginning of 2005 I finally landed a job with a struggling insurance carrier, which lead to my current position with a much more stable company.
So this is how it is today.
I remarried in 2005 to a beautiful woman, and have a beautiful son, I have no MD degree as I left that program early, I have no usable JD degree (with the financial collapse and resulting disarray of my office came disbarment (but first my “discipline” was buried for seven years)), surprise the law school I went to has been no help to me.
I was allowed to consolidate my student federal Stafford loans with the Department of Education to avoid default status in 2003. So now I have a consolidated federal student loan of $250,000 +, also there is a $30,000 private loan and there is $18,000 to the school. The big one is all Stafford with a fixed 9% rate, and thus the interest is $18,000 a year on the federal loan alone. Right now I have a deferment in place, meaning I do not have to make payments, but I still do pay something every month to all three loans separately. What started out as a $65,000 to $75,000 principal is now almost $300,000, despite thousands paid on the loans. I have a good stable job, but not six figures or anything, but it still has potential to grow. Even with this job, my prospects are limited by age and likely work life. Further the current economic climate has greatly lowered the likelihood that senior staff will retire and open up potential advancement opportunities. So still you can imagine that with my wife and two year old son to support, even though I have a salary, there is no way I will ever be able to meet the interest payments each year, much less affect the principal balances. So the loans keep growing and growing and growing.
This is the absolute definition of indentured servitude. I recall reading history books of poor people in Europe being given passage to the US with the promise of a new life, only to find when they get here that the interest on their passage is so high that they are forever forced to work it off, and really only one in 20 get that new life.
The conservatives that allowed for the elimination of bankruptcy protections to consumers must have thought that the businesses would be reasonable in their approach. But they were not. Big business, which I am a part of only responses to profit incentive. With the huge disproprotionate insentive to default loans, it is no wonder, that so many of us that ran into difficulties after school, now find ourselves hopelessly buried in debt.
Without the protection of bankruptcy for consumers, which forces the lenders to control their lending practices or risk getting nothing, they unlock the bank vaults and encourage those of us who just want a small piece of the American dream to accept their products and the opportunity it represents, but also all the risk it represents.
The end result is total and complete financial disaster for both parties (lenders really have little more chance of collecting than with bankruptcy, and the consumer is forever locked out of a decent chance at bettering their economic situation) which leads to chronic social ills. I have seen and heard of people turning to illicit means to find ways of servicing their debt. For example drug dealing, smuggling and the like are just a couple of illicit and undesirable methods some might try to turn to in order to cover their crushing debt problems. I have heard we have lost talent from people that have been forced to flee to other countries due to crushing student debt and no possible salvation. The middle and lower middle class can not absorb this level of personal risk individually.
I now live in constant fear that the government or the private loan company will eventually just destroy my marriage and take every thing away I have worked to build these past five years. It sucks. How am I going to retire (I am in my fifties now), how am I going to provide for my son’s education? I never want him to borrow for his education.
How is this American, or fair?
And what if this job I have disappeared in this economy or because of some ill conceived legislation reform ...
What I am asking for is that you support a return of basic consumer protections, not just for student loan borrowers but for all borrowers. The truth is that consumers need the stick of bankruptcy to protect themselves from predatory practices of different industries. When they are taken away, the securities market goes out of control, and all sorts of vested interests develop that cause the system to feed on itself and for it to spiral in growth until it collapses on its own weight.
The IBR does not help me at all. I am 53 with a two year old. Given that Congress stole bankruptcy protections, how are they going to tinker with the IBR over time. Plus, get this, the loan grows to what, 500,000 then when I am 78 I get a bill from the IRS for taxes on the 500,000 that is discharged?
Stories of wooo...
I know there are people that will say, in hindsight, with 20/20 retro-vision, I could have done this, and I could have done that. I agree, but know that in the story that follows, I could not see the future, and everyone, but EVERYONE, from friends and relatives, to school counselors, thought my choice to seek a private law school education was the RIGHT thing to do, I went in in a boom lawyer market and was going to a good school. But then what happened is what I call my pathetic story....
I am the first in my family to graduate with a four year college degree. Not only did I finish my first four year degree, I went on to one of the nations top law schools and now I am working on a Masters in Health Administration. It would look like this is cause for celebration, another American success study, lower middle class citizen rises through the social and economic fabric through the boundless opportunities provided in America. You would think that I should be a truly accomplished individual with a great job and incredible prospects. That is at least what this type of education was supposed to bring when I started my adventure in education in 1983.
When I graduated with my four year degree, there was not a lot of opportunity in Hawaii, and I thought I was smart and I was definitely ambitious. So I took the MCAT (medical school admissions test). I matriculated into medical school. It was a small relatively inexpensive state school. However, I was not real good at biology, and I struggled for three years. In addition in 1986 everyone was saying that we do not need more physicians and that managed care would make everyone a salaried employee. So I tried taking the LSAT and did phenomenally well.
I was accepted into two of the top 15 law schools in the country. For a lower middle class/middle class person like me these acceptances seemed to be truly great opportunities. I read all their recruiting brochures, and it seemed anyone graduating with a decent GPA would easily get a job in a large or medium firm, or even some corporations and earn $70,000 to $80,000 a year which was good in early 1990’s. The promise seemed to justify the marginal appearing risk. I graduated with a B average, but had no job waiting for me. You see we were in another recession and all the corporate merger and acquisition craze had just ended. The big firms did not need lawyers and the corporations were cutting back. Only the very cream of the top made it into the lucrative job market and the rest of us were left hanging.
What I did have was a total of 80,000 in Stafford, private and school loans. So I stalled, I got into a post graduate law program for six months, which increased my student loan balance, but put off payments. Back then I was looking at a monthly payment of 700 to 800, and no job in the offing, I took my in-laws advice and with their help opened up my very own law practice. I was able to find a way to make payments on the loans for several years (though only a year of profit in my practice). Then my in laws got sick, my mother in law and primary supporter of my practice died unexpectedly in 1997, my father in law, a renowned local dentist developed Parkinson’s and lost all his money to a scam artist; the housing market burst, and my wife left with everything of value in her mother’s estate.
With no source of client referrals and without a continuing equity increase in the family real estate to create cash flow, my fledgling law practice crashed and burned in 1998 and 1999. No surprise I suffered depression and dropped off the grid for a couple of months, well maybe it was more like a year to eighteen months, working as a tour guide, car salesman, insurance adjuster and other such odd jobs. My entire life, family and support structure that I had relied on for ten years had disintegrated. In 2000 I got help at my church in the form of counseling, then saw a physician/pastor and began treating my depression. In 2001, with the help of a well meaning attorney who was older and beginning to loss his competence, I filed bankruptcy. Too bad my attorney did not see the legislation change coming down in 1998, he might have been able to help me file much earlier and avoid the mess I am now in. By then of course Student loans had become non-dischargeable (except in cases of extreme physical disability or death). I remained under or un-employed for years, though I was seeking employment everywhere I could think (literally thousands of job applications and recruiters contacted). In the beginning of 2005 I finally landed a job with a struggling insurance carrier, which lead to my current position with a much more stable company.
So this is how it is today.
I remarried in 2005 to a beautiful woman, and have a beautiful son, I have no MD degree as I left that program early, I have no usable JD degree (with the financial collapse and resulting disarray of my office came disbarment (but first my “discipline” was buried for seven years)), surprise the law school I went to has been no help to me.
I was allowed to consolidate my student federal Stafford loans with the Department of Education to avoid default status in 2003. So now I have a consolidated federal student loan of $250,000 +, also there is a $30,000 private loan and there is $18,000 to the school. The big one is all Stafford with a fixed 9% rate, and thus the interest is $18,000 a year on the federal loan alone. Right now I have a deferment in place, meaning I do not have to make payments, but I still do pay something every month to all three loans separately. What started out as a $65,000 to $75,000 principal is now almost $300,000, despite thousands paid on the loans. I have a good stable job, but not six figures or anything, but it still has potential to grow. Even with this job, my prospects are limited by age and likely work life. Further the current economic climate has greatly lowered the likelihood that senior staff will retire and open up potential advancement opportunities. So still you can imagine that with my wife and two year old son to support, even though I have a salary, there is no way I will ever be able to meet the interest payments each year, much less affect the principal balances. So the loans keep growing and growing and growing.
This is the absolute definition of indentured servitude. I recall reading history books of poor people in Europe being given passage to the US with the promise of a new life, only to find when they get here that the interest on their passage is so high that they are forever forced to work it off, and really only one in 20 get that new life.
The conservatives that allowed for the elimination of bankruptcy protections to consumers must have thought that the businesses would be reasonable in their approach. But they were not. Big business, which I am a part of only responses to profit incentive. With the huge disproprotionate insentive to default loans, it is no wonder, that so many of us that ran into difficulties after school, now find ourselves hopelessly buried in debt.
Without the protection of bankruptcy for consumers, which forces the lenders to control their lending practices or risk getting nothing, they unlock the bank vaults and encourage those of us who just want a small piece of the American dream to accept their products and the opportunity it represents, but also all the risk it represents.
The end result is total and complete financial disaster for both parties (lenders really have little more chance of collecting than with bankruptcy, and the consumer is forever locked out of a decent chance at bettering their economic situation) which leads to chronic social ills. I have seen and heard of people turning to illicit means to find ways of servicing their debt. For example drug dealing, smuggling and the like are just a couple of illicit and undesirable methods some might try to turn to in order to cover their crushing debt problems. I have heard we have lost talent from people that have been forced to flee to other countries due to crushing student debt and no possible salvation. The middle and lower middle class can not absorb this level of personal risk individually.
I now live in constant fear that the government or the private loan company will eventually just destroy my marriage and take every thing away I have worked to build these past five years. It sucks. How am I going to retire (I am in my fifties now), how am I going to provide for my son’s education? I never want him to borrow for his education.
How is this American, or fair?
And what if this job I have disappeared in this economy or because of some ill conceived legislation reform ...
What I am asking for is that you support a return of basic consumer protections, not just for student loan borrowers but for all borrowers. The truth is that consumers need the stick of bankruptcy to protect themselves from predatory practices of different industries. When they are taken away, the securities market goes out of control, and all sorts of vested interests develop that cause the system to feed on itself and for it to spiral in growth until it collapses on its own weight.
The IBR does not help me at all. I am 53 with a two year old. Given that Congress stole bankruptcy protections, how are they going to tinker with the IBR over time. Plus, get this, the loan grows to what, 500,000 then when I am 78 I get a bill from the IRS for taxes on the 500,000 that is discharged?