I am a financially struggling graduate of an ABA law school who has failed the California bar exam twice. I currently owe approximately $140,000 dollars to federal and private lenders, obligations split roughly 50/50 between the feds and a private lender after consolidation. I currently work for the state of California as an analyst. I estimate that unless I pass the bar and move into a much more lucrative job with a private law firm instead of government service, I will need to put ALL of my after tax income into loan repayment for the next FOUR years in order to pay off JUST MY PRIVATE LOAN while keeping current on my federal loan. I currently live with my aunt rent-free and drive a car to which my parents hold title (Chevy Cavalier) which I need to get to work. I have no assets other than my checking account. I am 26 years old. I sincerely sought to obtain a higher paying job after graduation, but things simply did not work out. I did not graduate very high up in my law school class and my struggles with the California Bar (which, by the way, I came achingly close to passing last time) have made me virtually unemployable in the private legal sector at the moment.  I am not asking for sympathy, which many responders to this site are loathe to give anyway. I am, however, asking that readers recognize that many people who have chosen to pursue higher education, especially those whose families were not able to foot their bill and who had to rely on private loans, are now finding themselves in financial distress. As far as I'm concerned though, if you received a fully funded graduate education, I do not want to hear your moralizing about "responsible borrowing" or "taxpayer bailouts." If you criticize my decision to go to law school, fine. I actually agree with you. I now wish I hadn't. Call it one of life's little lessons that keeps on reminding me every month about what I learned with perpetual 1,000 dollar bills. But be sure that you succeeded in grad school on your own merit and that mommy and daddy didn't foot the bill before criticizing others who made the same decision as you.

When i was 16 I got hooked by a predatory "trade-school" that convinced me to not only take out thousands of dollars in debt, did so fradulently by telling me that I could get a degree despite being a high-school drop-out. I signed the papers they pushed in front of me, and without a co-signer (remind you I was 16) the school and the lender proceeded to fleece me for every dime they could get.

In the first 9 months of the school, they got me to take over $5500 in loans out, in addition to filing for a federal PELL grant that when I received they required that I sign the check over to them. After sitting in useless classes finally concluding in sitting in an empty classroom (no instructor) for two months I dropped the school and moved on.

10 years later United Student Aid Funds sends me a letter demanding more than double the original $5500 in loans because of "penalties and interest" For 10 years since, despite multiple appeals they are *still* chasing me for that debt (now almost 20 years after the original loans were taken out, disregarding that that the state of Arizona has a statute of limitations on all debts education included.

Education loans *MUST* be made dischargable in bankruptcy to prevent this kind of abuse and fraud. The Federal Student loan program is complicit in fraud every time they allow a fly-by-night school take advantage of the hope and dreams of children and young-adults.

Now I know this is not the norm, but so long as laws are absolute there can be no justice and escape for people like me.

In my last post I complained about the amount of my debt due to my undergraduate and graduate education. Now, I'm obviously no economist, but I'd like to think that law school did improve my simple deductive reasoning skills somewhat. So I propose that New America researchers conduct the following investigation:

1. Do a quick google search for tuition rates at various public and private colleges and graduate schools over the last 20 years.

2. Notice the dramatic increase?

3. Does the increase track the inflation rate over the same period?

4. What is the average starting salary for the students of the various schools upon graduation?

I'll leave the analysis of the data to the professionals, but I am confident that students today are paying dramatically more than their predecessors for the same education, but earning about the same or less (infation adjusted) upon graduation. 

 The problem is that the private lenders have gotten too cozy with the school administrators. The lenders know that:

1) the "undue burden" standard for dischargability of student loans in bankruptcy court is extremely difficult to meet under current interpretation of the law being made by federal courts, and

2) that tucking the non-dischargability of private loans into the 2005 Bankruptcy Amendments is likely to go unnoticed (for a time at least) because the burden falls on a relatively small (but growing) portion of the population that is forced to pay interest rates sometimes higher than that of a credit card. My own private loans carry an 11.5% rate. This allows the lenders to generate large returns with relatively low risk. (provided Senator Dodd fails in his bid to make private student loan debt dischargable in bankruptcy like it used to be.)

As a law student, I helped process the bankruptcy petition of a woman who ran up close to $60,000 in credit card debt by taking cash advances and going to Atlantic City. Aside from some harrassment at the hands of the 2005 Amendments which forced her to take meaningless "debtor education seminars," she was able to emerge from her bankruptcy debt free. If I tried the same thing, I would run into the "undue burden" standard and would surely fail, based on my age and lack of physical impairments.

 An open question to the community:

Why should we as a society penalize people who could not afford to front the exorbitant sums being demanded for higher education, but reward someone who lost the same sum in the casino. I'll answer it. The casinos have better lobbyists than students.

I have an undergrad and graduate degree. My original loan balances were 60k in federal loans and 20k in private loans. It is now claimed that I owe over 200k total. Now out of school for over 12 years I am stuck in a low level management job with little opportunity for promotion. Luckily I have enough money to live a minimal lifestyle and have good insurance. I have looked extensively for better employment but a variety of factors have thwarted my efforts including the fact that I have defaulted loans. I live paycheck to paycheck with no retirement savings and continually facing both the Feds and a private loan collector who never cease to harrass me for payments I cannot and will never be able to afford. I fight back the best I can but it is clear they will never stop. But since I have no hope of meeting their demands I continue to fight them as a matter of survival.

 What angers me the most is how the law has changed over the years since I graduated. There are no grandfather clauses ever included to help the older borrower who relied on prior law. So I feel I was told one thing and then they changed it to their favor and there is nothing I can do about it. Let me explain.

In 1998 the SOL for federal student loans was eliminated. I graduated several years before then when the law said you could Bankrupt SLs after 7 years. I knew that back then and NEVER would take out any loan that I cant bankrupt especially a SL which is like an investment. But suddenly, I couldnt Bankrupt my loans anymore and never had a chance to since I hadnt been out of school for the required 7 years. I did not even know the law had changed until about 2000.Then in 2005 the new law eliminated the ability to discharge private SLs in Bankruptcy (although many private lenders have long argued that the 1998 law did that). So basically when I took out my loans I was told and the law was that I could bankrupt all loans (federal after 7 years) and the private loans were like any other unsecured debt. Then after I took out the loans and graduated and could not find the job that I had envisioned they changed the law to no bankruptcy for either. Moreover many private SLs are now saying there is no SOL on their loans as well. I do not believe that as 20 USC 1091 does not mention private SLs which in my opinion are still unsecured debts although you cant Bankrupt them anymore. Before anyone lectures me, ask yourself how you would feel if you bought a car or house under current law where you can give them back and not owe anymore if you file Bankruptcy and then one day the law changes and you are obligated to pay for them no matter what even if they do not work or are worthless. And dont whine to me about this being taxpayer money. The private loans are certainly not taxpayer money. Why does the govt need to make a private loan risk free? Thats just a subsidy to rich banks. As for the federal loans, yes that is tax money, but the IRS now has many options to reduce or eliminate overdue taxes. Why do federal SLs not have the same options? Answer is that rich people who owe taxes dont want to repay them and have the money to change laws in their favor but the broke student borrower has no money and therefore cannot affect our current law which is geared towards generating profits for big banks even if the federal govt has to be the big bully collector.

Remember this: I am not the insurer for higher education and the law will not make me so. People can use borrowed money to gamble or make risky investments and then file Bankruptcy and not pay if things go bad. Why are SLs not allowed the same option? Is the govt aware that the cost of education is too high in proportion to the economic opportunities available while the quality of education has declined? Yes I say but the govt wants you to subsidize higher education because they are too lazy or stupid to fix the problem. Thus they force the problem on you. Dont let them get away with it. Fight back by contacting Congress, the Secy of Edu and using existing collection laws like the FDCPA to avoid paying amounts you cant afford. I am never giving up. I will fight until I die and then I win anyway. Good luck everyone.

I transferred to a private college in 2003. I am from a poor family and I have a physical disability. My tuition for my first semester was $14,000 and I had to get a $10,000 Sallie Mae private loan. My second semester I only had to get a $5,000 Sallie Mae loan because I fought to get a federal loans. I was not offered a federal loan my  first semester and I remember they pushed for these private loans. I was the first person in my family to go to college and I moved 1,000 miles away from home to attend this school. My family was not involved in my education and I had to make my own decisions. I had to rely on the school. They really took advantage of me because I was oblivious to the financial aid process and I was from a very poor family who was not involved. I did receive the Pell grant and a small scholarship but I feel that I could have benefited from the small interests of the federal loans.-I now have a Master's degree and I am paying all of my loans back now. I have about $72,000 in loans combined; $22,000 total from Sallie Mae because the interest accrued while I was in school. The only loans I am having a difficult time with are these Sallie Mae loans. The federal loans are easy to pay because they are willing to work with you. Sallie Mae is a ridiculous company and colleges should be ashamed to use them. I recently called my undergraduate school to question these loans. They stated they have notes in their system that I never turned in the federal promissory note for that first semester and that's why I had to get such a high private loan. That is ridiculous! I lived on campus next door to the financial aid office and they had me come to their office on several occasions to force the Sallie Mae papers. They made it clear to me that I had to get this loan, this was the only way that I would attend their school. I was stuck 1,000 miles away. This is not fair-