Monday, October 20, 2014

Where is the champion of those saddled with student loans?


Let me start off by saying, I recognize, no one made me take out student loans. They were the only way I could afford graduate school, and I was grateful for the opportunity to go. Despite my debit of $49,500 upon graduation I did not regret my decision (although I did regret not trying harder to find scholarship options). I was fortunate enough to start working at a full-time job exactly 6 months after graduation - precisely when I became responsible for repayment. Everything was great.

Not long after I began working the government instituted a policy of loan forgiveness for anyone who worked in civil service. Although I qualified, as an employee of the U.S. Environmental Protection Agency, after crunching the numbers I saw I was ineligible because I made too much - a back handed compliment if there ever was one. I felt like the stereotyped middle class - making too much money to qualify for any assistance, but not enough that I actually could afford all of my expenses and have room to breath at the end of every month.

Ultimately, I was a vision of the American work ethic - hard work paid off in the form of an increased salary, something I know many, many people go without (including some of my coworkers who were denied even a cost of living adjustment for years). With this added income I increased my student loan payments to more than was required. I felt good that I was saving money by reducing the amount I would have to pay back over time in interest. At the rate I was going I would be able to pay off my loans a few years early. I wouldn't be able to afford buying a house at the same time as  many of my peers, but at least I would have this albatross off from around my neck.

To make a long story short, I decided to pursue my dream in life, a luxurious first world privilege if there ever was one. I took an unpaid leave of absence from my job and was able to negotiate a reduction in my monthly student loan payment - roughly half of what I had been paying. I was able to make these payments every month over the last two years. Sometimes I didn't know how I was going to do it, but always something came through - be it a tax refund, a surprise job, etc. Then, a couple of months ago I started a new, full-time job, something I hadn't had since I took my leave of absence two years prior. I'm in a completely different field, something that has absolutely nothing to do with either of my degrees. At first I was resentful I had these loans - what was the point if I'm working in an unrelated field. I expressed these feelings to an older woman in my neighborhood I spend time with (older in age but not spirit), and she corrected me - saying that my anger at my loans was misplaced. Of course, she was right. I was mad that while I finally had more money to my name than I had for a long time, I still couldn't spend it the way my friends did (vacations, cars, even going out to eat), because I had my loans to pay. This is an idea worth exploring another time, but tangential to the issue at hand.

I had been thinking about how to manage my loans. Friends told me about companies that would buy out my loans and let me pay them back at a lower interest rate. It was something I was considering, but was hoping to wait until I got some sort of a raise - at least enough of an income that I could approach an American financial institution asking for a loan and not be laughed away. But, the clock that we forget is always ticking in life caught up to me. Last month I received an email informing me that since it had been two years, not only would my student loans increase to what they had been previously, when the amount was contingent on an income that was roughly three times what I'm making now, but that there would be an extra amount added each month, to make up for the full amount I had not been paying. Essentially, I was told I would have to pay almost three times what I would had been paying. Not just once - but every month until I paid off my loans. The amount demanded by my student loan provider was about half of my take-home pay. I did not worry about this - how could they expect me to come up with this? I submitted a request for a reduction in my monthly payment, happily sharing my previously embarrassingly small salary, brimming with confidence that my request would be accepted.

My only response ended up being a notification that the massive monthly payment was successfully extracted from my bank account. I gasped in horror - what should have lasted me three months, which was plenty of time for there to be miraculous influxes of money here and there to allow me to continue my payments - had suddenly vanished. I frantically took to social media, asking for help what to do. More than a few people, with varying degrees of seriousness, suggested I withdraw all my assets from the US and just forget about the debt. Since I was living abroad without any plans to move back, what did my credit score there matter any way? While it sounded satisfying in my state of panicked anger, it was not a real solution for me. I acquired this debt honestly, and willingly, and so shall I pay it back.

So why am I here? Because my consternation is not unique to me. Perhaps my financial hardship was acquired in a uniquely fun way, but it is the same hardship shared with so many Americans around my age today. Saddled with a debt that cannot be vanquished the way so many others can. Student loans are not, or at least should not, be considered more impervious than vanity purchases on credit cards. Why can private loans be renegotiated for more favorable rates, while something that was undertaken for edification, be more rigid that the financial obligations of income taxes. How is it that a society that is so fiercely proud of the right to an education, and the idea that one can improve their lot in life through education, subject those that can't meet the expectations of repayment to a fate worse than many crimes. Try getting a job, let alone being able to rent an apartment or lease a car if you have on your credit report that you failed to pay back your student loans.

At the end of the day, I'm not disappointed in the choices I've made. I'm disappointed that as a society we are able to effect changes that are so meaningful to people's every day lives in a positive way - yet the problem of student loan debts continues to cripple not only those bearing them, but society as a whole. While corporate 'people' were quickly bailed out, in order to prevent the economic fallout on the nation, our economy is quietly stifled by a problem that no one is able to rally for a solution. How much more stimulated would the economy be if there was a stimulus package helping to reduce the interest rate for student loans - allowing them to be paid off faster. Why do economic packages from Congress need to be 'shovel ready', couldn't they be just as valuable if they freed up Americans from bondage to miserable jobs or liberated them from their parent's basement because they could finally afford their own place? Where is the champion of this movement? I'll tell you - probably working two jobs just to make ends meet.