Why I am Going to Default on my Private Student Loans

student-loan-defaultIn the fifth grade my teacher, Mrs. Ramacier, picked me to teach a lesson on Minnesota history to the class. I remember it because it was the first time I actually thought about becoming a teacher. After the lesson I was pretty sure that’s what I wanted to do, if I didn’t become a movie star or professional athlete of course. As I grew up and realized professional sports were out of the question, and Hollywood wasn’t looking to promising either it just seemed natural to focus on becoming a teacher. I had it all figured out: go to college to get credentialed and then teach and coach at my Alma mater. It seemed like a great plan. Step one: college.

For as long as I can remember my parents placed a premium on education. They, like so many others, saw it as the way to improve the family’s material reality, that is to say education was the way we wouldn’t be broke anymore. To make sure we were properly prepared my parents put their money where their mouth is and sent me and my brothers to DeLaSalle high school. They sacrificed so much in order to pay that monthly tuition. Because of this I knew that education was important and that I needed to go to college, what I didn’t understand was just how vicious the economy of higher education truly was.

My parents assumed that De would prepare me for all aspects of college, including how to pay for it. What they didn’t know was that families like ours needed to be much more proactive about paying for college. DeLaSalle is not tailored for working class first generation college students:  I graduated DeLaSalle without knowing what FAFSA was. I am sure the guidance office had this information, and I am not saying I shouldn’t have been more tuned in, I should have been, but the fact remains De was not worried about whether or not I could pay for college. This inattention combined with my desire to be a college athlete, and a culture that promoted four year universities left me diametrically opposed to anything but a four year school. So, I ended up at Hamline University playing ball and studying to become a teacher. As far as I knew everything was in order. I would have to take out loans but who didn’t?

When I told people I was going to Hamline nobody ever questioned it or how I would pay for it. Everybody congratulated me and was quick to tell me how good of a school it was. Everybody assumed I would take out loans, it was just a given. I was told student loan debt was the best kind of debt to have because it showed “you were serious about your future.”  Nobody even took the time to explain the difference between federal and private loans. So, every semester I went to the financial aid office and got my package, nobody there explained the difference between federal and private loans or asked me what my career plan was to ensure I would ever be able to pay off the debt. As a result I graduated with 35k plus in private student loan debt while still being eligible for 25k worth of federal loans! It seems it was not as simple as just going to college and getting credentialed.

Today, my total student loan debt is over 135,000 dollars with over 70,000 of that coming from private student loans.  Unlike federal loans there is no assistance with private loans, there is no consolidation, there is no income based repayment, nothing; they cannot even be discharged in bankruptcy. The only option the company that owns my private student loans, SLFC, offered was for me to pay 250$ a month for two years. However, this wouldn’t even cover the interest that accumulates and the remainder would be capitalized quarterly. To make matters worse after those two years I would then have to pay the regularly scheduled amount which would be higher in order to adjust for the capitalized interest. For several months I participated in this program only to see my principal balance continue to grow; when I approached SLFC to try and work something out they told me my only option was to pay close to 700$ a month. It just didn’t make sense to continue paying money to watch my debt grow. Something is wrong with this.

Ways-To-Not-Pay-Back-Student-Loan

While student loans have been a part of the national dialogue it has, inexplicably, been limited to federal student loan interest rates. Fundamentally we need to begin to shift the conversation. As a country we can no longer tolerate capitalisms insatiable thirst for commodity, education must be off limits! As an adult, I look back at my journey to this insurmountable debt and see I was destined for this from the jump. Higher education provides the perfect environment for capitalists to squeeze out profit. As manufacturing jobs fled this country, due to offshoring, higher education became even more crucial than it was. Millions of young people, due to America’s deindustrialization, began being funneled to colleges and Universities as the BA became the new high school diploma. Banks seized on this rush, taking full advantage of the increased market, and commodified access to the education. Now, higher ed is among the biggest of big business. Skyrocketing tuition combined with reduced funding has left millions in need of financing their education through private banks. Of course, this will disproportionately affect working class and poor families because, like my family, we don’t know the game and are so desperate to change the economic circumstances of our families that we will do anything to get where we need to go. A college education is often times the only legal route presented to us. So, we gladly play the student loan game and pray that the “investment” pays off. Sadly, for a lot of us it won’t. Today, I owe roughly 100% more than I took out in loans. Yup, that’s right, I owe double! It is true that I will make more money than my parents, and I will make more money than I would have if I had not gone to college, but I will also owe considerably more! This money will not go to building the wealth of my family, it will not go to improving our quality of life, no, it will go to the 1%. It will go to the banks that never have to wonder if student loans will pay off for them, these loans are fully guaranteed by the government; no matter what I do SLFC will get its money, they take no risk! They are making profit from the hopes and dreams of the working poor for a better life. This is different than consumer loans because our life chances are tied to them. There are no factories or mines to go work in if you cannot pay for college or do not want to be an academic or intellectual. College, in this world, is a necessity.

I am doing what I set out to do, teach, and I love it. But now I no longer see my education as a way to get credentialed. I have no desire to coach or do anything at De. Today, I want to use my education to fundamentally change the relationship of my community to resources and power. Today, I want to forment revolution and believe knowledge is key to that struggle. It is sad that knowledge has been held hostage by institutions which are increasingly wedded to capitalist money making endeavors. What does it say about us that banks and multinational corporations receive zero percent interest rates but students do not? Education is a human right. It is time for the Unites States to realize that by investing in education we are investing in ourselves and our future. In order to do this, however, we must break from the deeply engrained thought patterns of capitalism which teaches us we must “get ours” at any expense. We all do better when we all do better.

This may seem like a utopian dream but it is far from it. The United States could easily bail out its students and make higher ed universal. In fact, our future depends on us doing just that. We are facing a crisis that requires all of us contributing our various skills and talents to solve. The environment is deteriorating at un-before seen rates, we have more people in prison than any place on the planet, we are working harder and longer and are less happy and more depressed because of it. The good news is if we alleviate the burden of school debt we will be in a better position to nurture the creativity and imagination of those folks who are currently working in jobs simply to pay the bills regardless if they are passionate or not. Perhaps we can then begin to think about how to put people to work on renewable energy and living wages and create a vibrant sustainable world for future generations. At the very least private loans should be dealt with similarly to federal loans. My federal  loan debt, while large, is very manageable, I am on income based repayment and pay a reasonable amount faithfully every month. This stands in stark contrast to the situation with private loans where they are demanding I choose between my life and my loan.

As for me and my plan, I am a high school teacher. I will never be rich. Yet, I believe that I am contributing to society. I believe that I deserve to have a family and to live in peace and happiness. I believe that I should not have to choose between starting a family and paying my private student loans. So, I will continue to tell SLFC that I cannot afford to pay what amounts to a second mortgage. They will continue to chastise me and my father (my cosigner) implying that we are irresponsible freeloaders. They will remind me that “I did not have to go to college” and that I need to pay. They will do all this while refusing to make it possible for me to live my life and pay off my loan. So I will default in my payment and live my life and it will be worth it. I will make up every morning and put my efforts into improving the world for the young people that come into my classroom and my own future children. I will be healthy and happy and free.

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6 thoughts on “Why I am Going to Default on my Private Student Loans

  1. “They will remind me that ‘I did not have to go to college’.” I AM SICK AND TIRED OF PRIVILEGED (in the very essence of the word) PEOPLE SAYING OR THINKING THIS. And of course they would in this nation that historically promotes a culture of not needing education at any level. It makes you wonder if we’ll once see a day where you will hear “well you didn’t have to live here, you could live in a dilapidated underserved area over there that i myself wouldn’t live in”;
    “well you didn’t have to get a jacket and boots; the Indians were able to make it work in the winter”
    “well you didn’t have to buy food; you could just stop eating for a little bit” (then it becomes a lot bit)

    …and plenty other excuses that will be thrown at you JUST BECAUSE you’re trying to make our country BETTER and more SKILLED while just trying to SURVIVE!

  2. The sad part is that even if you do default they are able to garner your wages and even your tax refund. While I agree totally with their sentiments and I have racked up student loans close to 40k 1/2 private 1/2 federal attending a private Christian college only a few miles up the street north of Hamline U.

    Do’t get me wrong i loved my college experience and the opportunity to move 1000 miles away from home to grow up and learn about the real world. But now that i am older, wiser, married, with a mortgage and work part time and freelance and not really even doing anything remotely close to what i went to school for. the sad reality is i couldn’t pay for college and now I can barely pay my loans and one is in default and I am working to get it back on track because the amount of money I make isn’t much it’s more supplemental than anything so they have nothing to garner.

    I even had a lady in the business office tell me that I couldn’t afford to pay for my school based on my parents 30k a year income, i thought she was so rude at the time…. but i should have listened to her, cause I wouldn’t be in the position I am in now.

    I wish there was an easier solution or more loan forgiveness programs out there. I am not sure I even think its worth it to send my kids to college anymore, however I do think its important for them to be educated and learn a skill or trade… Who knows what it will be like when they grow up or even if college is even around….

    The private college route is not the way to go especially when you feel called to ministry. Barring some type of miracle or us winning the lottery, I do not see us ever paying this crazy debt off!

  3. That’s a sad story. I hope lots of undergrads and high schoolers read this before they sign onto big loans without a way to pay them back. And I hope parents read it before they co-sign on big loans, and encourage their kids to attend schools they can’t afford.

    1. You are right Tim. College is for the rich. The govt is correct to make profit from student loans, even though people getting educated is itself a postivie externality for the country. I can buy a house for 4.5% interest, but student loan interest is 6.8%. Yep, the poor should not be getting educated. you are correct Tim.

  4. Its weird I found this after I just wrote a very similar post, but I however am drowning in debt and wasn’t able to get a degree… read my post I just did! I tagged yours bc I think we all need to stand up together, and try to help us and the generations following us who will be in the same boat, unless we try to make changes!!!! I’m glad to know, I really am not alone in feeling this way!

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