“If I had to do it all over again…” – John’s Student Loan Story
John* was supposed to be a success story. He grew up in a middle class home in Elk Grove, CA where his father was a captain of a dredging ship and his mother worked as a chemist for the state. John was a precocious child, earning straight As throughout much of his early education. When he decided to major in history at the University of California-Berkeley, his parents were happy to help to the extent they could. He graduated in 2003 with about $5500 in student loan debt, substantial, but much lower than the national average. He felt lucky.
Still, John wasn’t sure what he wanted to do with his life so like many humanities majors before him, he opted for law school. “I knew that I wanted to make enough money to have a standard of living comparable to my parents and that I did not want to pursue a career in academia or teaching,” he says. “Law seemed like the most logical decision at the time.”
So John headed for Brooklyn Law School where he felt he could gain more varied life experiences. Instead of “backpacking around Europe like some of my classmates had planned,” he wanted to do something that would provide adventure and move his career forward at the same time. He had a $10000 scholarship his first year, but he had a difficult time in law school, and his second year he lost his scholarship. “Looking back,” he says, “I think it would have been helpful to have taken a year or two off of school at some point and work for a living.” Yet, like many of us, John had been told from the time he was a small child that education was the key to success. “My parents had drummed into my head from an early age the importance of getting as much education as possible and encouraged me to stay in school continuously, right up through law school.”
After his first year, John realized law school wasn’t for him. “In law school, I found out I was not a good fit, socially or intellectually, with the kind of people who worked for law firms.” But he had committed himself, and he decided to stick it out. “I really wanted to quit after my first year,” he explains, “but I felt that I had already invested so much money that I was ‘pot-committed’ to use a poker analogy.” He took internships with government law offices and resigned himself to getting through the next two years.
After he graduated law school in 2006, John decided to move back to California to be closer to family and friends. He spent $5,000 on a bar preparation course – a fairly common practice for law graduates – and worked non-law jobs and lived at home while he was waiting for his bar results. He found out that November that he had failed the bar exam, and soon after he had a falling out with his parents. He found an apartment and worked at a collection agency and as a paralegal at a small firm before taking a job at a standardized test grading company. He deferred his loans and took the bar again in July 2007. Shortly thereafter, he took a position as an analyst for the state and moved in with his aunt.
“At this point, I believe I became clinically depressed about my situation and only fell deeper into depression when I found out that I failed the July 2007 bar exam,” John says. He was having trouble at work, but he was determined to pass the bar so he began studying again for the February 2008 exam.
“My low point came last May,” he says, “when I learned that I had failed the bar for a third time and received a probation report that essentially said I was going to be terminated, both on the same day.” His grandmother had recently died and he’d totaled his car the previous month. “After spending a night at the local park drinking heavily, I went to see a psychiatrist and was prescribed Prozac, which helped,” he says. He explained his personal and financial situation to his boss and was offered a transfer to Sacramento in lieu of termination. He reconciled with his parents and moved back in with them briefly before finding his own apartment.
John now owes approximately $130,000 in student loan debt. He makes $36,500 a year, and his minimum student loan payments are close to $1000 a month, though he usually pays more in an effort to pay down the principle. He has never missed a payment, but he sympathizes with those who are even worse off. “I can’t imagine the hell that defaulters are going through,” he says. “I saw what happened to my student loan balance in forbearance and can only imagine how much worse default would be.”
For now, John has no plans to retake the bar. He says he is happy just to be able to make ends meet. Still, he regrets the choices he has made. “If I had to do it all over again, I would never have gone to law school,” he says. “The financial consequences and shame in failing the bar make me feel like a complete idiot. My JD has paid absolutely no dividend for me, more than two years after graduation.”
He adds, “It seems fundamentally unfair that even gamblers can completely discharge their debts in bankruptcy, while student loan debtors, even those who have never missed a payment, are not even afforded the opportunity to refinance their debt, much less file for bankruptcy.”
*Name has been changed to protect privacy.