“We have served our sentence…” – Louise and Paul’s Student Loan Story
When Louise* decided to go to college, she knew she was on her own and she planned accordingly. Her parents had a rocky marriage, ultimately ending in divorce, and though they would have liked to help her with her education, they didn’t have the money. “As a college student, I took out minimal student loans for fear of debt,” she says. “I went to a SUNY school so the cost would be low. I sometimes worked three and four jobs to cover my expenses.”
While she was still in college, Louise met her future husband, Paul, who was then studying at private four year school. Like Louise, Paul was paying for college himself, but unlike her, he taken out a large amount of student loans to fund his education. Paul was the first person in his family to go to college and his parents, a construction worker and a homemaker, encouraged him to take out as many loans as he could. Louise wound up leaving school without her degree and she and Paul married soon after his graduation in 1985. She had around $5000 in student loans; Paul had $16000.
Although Paul had a degree in engineering from a good school, the economy was tight and he had a difficult time finding a job. He entered a training program that paid under $5 an hour and was hired on permanently with the promise of higher wages down the line. Louise had a minimum wage job at a pet store, and it was hard to make ends meet, but they weren’t worried. “Our luxury was beer and pizza,” she says, “but that was ok. It was what being 20-something was about.”
Then, the unthinkable happened. Paul got laid-off and was out of work for six months before ultimately finding a job as a security guard. In the meantime, they fell behind on their student loan payments and soon they were bombarded with calls, asking them to pay large sums of money that they simply didn’t have. “We started playing the ignore game,” Louise says. “If you ignore it long enough, it will go away.”
Paul was ultimately rehired at the company that laid him off and then progressed through his career, always seeking jobs that would use the skills he had learned in college. Worried they were running out of time, they also began to expand their family and had three children in five years, “blessings each and every one,” Louise says. Throughout their childhood, Louise was a stay-at-home mother and an active member in her church and community as well as an artist and singer. They tried to catch up on their student loans, but when creditors called, they demanded large sums, sometimes up to $2000. Louise and Paul’s attempts to negotiate lower payments were refused and they were told to sell their car and threatened with wage garnishment. Unable to make the large payments demanded, they again began ignoring phone calls.
Louise and Paul are now in their mid 40s and have been married for over 22 years. A few years ago, they took out a federal consolidation loan to try and pay down Paul’s debt, which had ballooned during their time in default. After fees and interest were added in, they now owe $56,000 on the original $16,000 loan, and the loan continues to grow at a rate of over $300 per month. Their expected payments are over $650 a month, but their “disposable” income for things like medical bills, household goods, school supplies and car insurance is only $1000 a month, and they are once again in default.
Louise and Paul cannot afford to buy a home, and they fear for the future of their children, now 17, 15, and 12 and all honor students. “I feel shame and terror,” Louise says. “Shame that we cannot help them. We do not even have a house that we own to use the equity or sell to put them through school. Terror that in spite all we have gone through, my middle daughter seems determined to take out loans for college.” Their oldest daughter is now a senior in high school and plans to attend community college before transferring to a four-year institution to become a teacher.
Louise’s husband continues to work as a process engineer and she continues to make award-winning art and sing when she isn’t taking care of the household. She is also an inventor and has created several products, including a moisturizing cream that her friends and several family members swear by. She would like to start a company so she can market her invention, but because of bad credit, she can’t get a business loan.
Louise’s story is filled with regret. “I feel like a failure,” she says. She is the first to admit that her husband and she haven’t always made the best choices, but she feels they and their children are being unduly punished for mistakes made years ago. “My husband was under 21 when he signed on for his loans,” she says, “and under 18 when he signed on for his first loan. So before he was really an adult he did something that has affected all our lives for over 20 years and promises to affect us for the next 22.”
However, as I listened to Louise’s tale, I couldn’t help but think that, really, the choices they made weren’t so irresponsible or bad. One choice she regrets is that she and her husband didn’t file for bankruptcy as soon as their financial troubles hit because the changes in the law since that time have made it virtually impossible for most people to discharge their student loans. To me, this shows that they fully intended, in all good faith, to pay off their student loans, but a variety of life circumstances intervened. This wasn’t irresponsibility or poor planning; this was life happening.
Louise is especially frustrated with she and Paul’s lack of protection because their loan is through the federal government. “It implied safety to us and our parents that this was U.S. backed and therefore our rights and needs would be watched out for,” she says. “We did not take it to mean they could charge us interest higher than most home loans forever and leave us feeling helpless and hopeless. The federal part is what has made it lethal. We have no recourse against the government.” She wonders why, at the very least, the government can’t stop adding more and more interest to the loan.
Louise recently wrote a letter to her congressional representative begging for help. She had Googled “theft” and found that people who steal large amounts of money are typically sentenced to anywhere from 3 months to 30 months in jail. “I maintain we have served our sentence 20 times over,” she says. Her analogy is an apt one except that she and her husband’s crimes were really no crimes at all – they simply wanted to make a better life for themselves and their children. The true injustice is that they continue to be punished.
*Names have been changed to protect privacy