I’ve avoided talking about my student loans; the situation has been a distressing part of my life for the last 16 years. I had become very angry about how I understood and misunderstood the situation. Sometimes sharing all that anger isn’t productive, but there is light now at the end of the tunnel and the story must out. Bear with; it’s a long story, maybe seeming even a tad tangential; my experience comes from the 99%, one of those stories not about the successes of the college-educated, but from the margins of low income. In this lifetime good stuff and bad stuff happens.
The son was born in September 1992. I’d had a career as a hairdresser for 20 years and my body had suffered changes from the weight gain of the pregnancy and the last minute major surgery Cesarean section. I had nerve damage in my arms and hands and physically could not do the manipulations of brushing, shampooing, winding permanent wave rods, rolling curling irons, and the other work of hairdressing. I never made much money as I worked and lived in a smaller rural area; we got by.
I had to apply for welfare assistance when the son arrived. The hubster is physically challenged and has work limitations; we finally got a diagnosis of fibromyalgia a year or so after the son arrived. He has never received any Social Security Disability payments; we have always been told I make too much money. I don’t. Make too much money. Never have. We get by, by doing without. That’s enough. I mean, how much do you need, really?
The Human Services department in the area where I received welfare offered a class for displaced homemakers, women who were transitioning from being stay-at-home moms to employed workers, and invited me to attend when the son was 3 months old. If you received welfare in any form you were invited to attend. I was enjoying the contentment of lactation hormones and would have been happy to stay at home with my child the rest of his childhood but somebody had to earn an income for my family and that somebody was me.
It was determined I would be a good fit for this class as I was needing a career change, even though I’d always been employed. They paid for my transportation, for the child care of my choice while I was in class, and my tuition at the class which took place at the local community college. The class hooked me up with an Associate’s Degree program. The program was entirely paid for by grants, and between that and a monthly $300.00 in food stamps and a little over $500.00 from welfare, I could cover the $200.00 rent on the moldy little trailer house we lived in and keep the heat on and us clean and fed and get me to class. I was able to take a part time job as an insurance company’s office assistant that put another couple hundred in my pocket to buy things like shoes and car maintenance and toilet paper. You know, the extras.
I was in student heaven. I’ve always been a life long learner and loved the learning environment. I earned an Associate’s Degree and realized I was a few classes short of being able to transfer to a college or university to earn a Bachelor’s Degree. I had to learn how to use a computer and manipulate various word processors and spreadsheet programs. And I had learned something more important than any degree: that I could make changes in my life that were hard and worth working for.
I took another year getting the transfer credits I needed and earned another Associate’s Degree; in Oregon it’s called an Oregon Block Transfer Degree, and says you have all the credits required for transferring to the college or university of your choice. That extra year enabled me to bring Phi Theta Kappa to our campus, the honor society for two-year or community colleges.
At the college fair late that winter I was solicited only by a private university. The public and state schools weren’t interested in me. I don’t know why as I was a 4.0 student, I had two degrees, and I had chartered the community college’s Phi Theta Kappa honor society as the charter president. Maybe it was my English major. Or my advanced age. But the private university indicated they would provide a full ride.
A full ride I could handle, as my income was entirely non-existent except for public assistance (my part-time job in the insurance office was eliminated as the office downsized) and I needed more tools to make the changes I was considering. To me a full ride meant help with housing for me and my family, and tuition, book, and resource coverage. I was still eligible for small amounts of welfare assistance and food stamps for a short while, to keep me in food and detergent and toothpaste, so I wrote the essay, filled out the application, Mom paid the application fee, and I was accepted. Little did I know. Little. Did. I. Know.
I had to sign a whole slew of papers to enter University and I had to be vaccinated as well. Good thing my medical was still paid for by the state. Good thing we were fairly healthy and other than well-baby checks we didn’t use the system much though we finally received the hubster’s diagnosis.
I was told the university paperwork was to cover the tuition. The explanation was so general I did not realize I was signing loan papers. Yes, I was a probably naïve, I was excited, maybe I did not pay enough attention, I certainly didn’t understand it properly until much later. I’ve never been a high finance kind of girl, money for me has always been about can I pay the rent, keep the heat on, the car running, and put some food on the table. Either way signing loan papers is a whole lot different to me than a full ride.
I received Pell grants and several other grants and scholarships, and during my two years at university I applied for every scholarship or grant I could remotely or not qualify for, received a couple scholarships I didn’t think I had any chance of receiving, took work-study as an option the minute I qualified for it, but ended up with two loans and a university account, or three separate accounts to re-pay. The smaller Perkins loan was only $1000.00 but it took me 15 years to pay that one off. The university account was around $3000.00. The larger federal loan finally ended up more than $21,000.00. Maybe not a lot of money to some people but it was a lot to me and the federal loan was more money than I’d ever made in one year.
As it was, the university did not initially provide housing either. For the first two months of classes I had to drive an hour and a half each way from the area I lived, spending part of my day combing the area looking for houses to rent. I spent time not only in classwork and homework but begging student services to help me with housing. I couldn’t fit my family into traditional student residence dorms. Winter was coming on and the coast range I drove over every day was being threatened with risky snow conditions. I was a unique challenge for the university. I finally told them I was going to have to drop out as making the drive every day was taking its toll on my immune system. I had ended up in the emergency room with strange internal pains which were never diagnosed.
The university decided to let me use a house they owned which in the past had been a frat house. They gave us the key the day before Thanksgiving and we moved that weekend. We routinely answered the door on Friday or Saturday nights to younger students who were looking for the party and we had to send them on their way. The house was what constituted the university account, the rent accumulated for what they charged me for housing. The house was walking distance to the university so I was never late for class and could go home for lunch or break and not spend money in the cafeteria. The small monthly charge covered electricity, gas, water, sewer, and garbage, and admittedly was a nice package for me but it still added up to more money than I had to pay.
Eventually welfare cut me off, saying they weren’t in the business of supporting people getting a college degree. I was so close to graduating I told welfare they could just keep all their assistance. I was tired of fighting for it, tired of having to be re-assessed every three months. I told them I had been poor for a very long time and I was resigned to being poor but come hell or high water I was going to earn my Bachelor’s Degree with or without tax dollar assistance. We got monthly food boxes from the local church and food boxes from Mom which included paper products and cleaning materials.
I graduated magna cum laude with my Bachelor’s Degree, in the top six students of my class. I did not get to own my original diploma because of the outstanding university account. My original degree was destroyed because I did not pay off what I owed within two years. The university charged me for pre-existing damage to the house they rented to me. I had to argue about the pre-existing damage though I freely admitted and readily paid for the damage I did leave as I’d broken a window hurrying to move and had damaged a piece of the carpet as well. I got to own a copy of my degree about 12 years later after paying every month and finally submitting a written request for waiver of the small balance, which they granted. The copy of the diploma cost me $20.00.
In the rush of graduating, trying to move out, and being charged by the university with a judgment for the pre-existing damage and the ensuing defense against that, I missed my student exit interview. I’ll bet I would have understood more about my student loans if I’d remembered that appointment. Ah, sublime hindsight.
My university career was interesting and I will always be grateful for the learning and intellectual environment and best of all, knowing I can learn anything I want to know. I had engaged and caring and supportive professors.
Post graduation blues set in. I had a Bachelor’s Degree and a minimum wage job. At least I had a job. The job turned into a lower management position, with only the slightest increase of income and a greater degree of responsibility. After living in our 1963 school bus in a mobile home park for a few months (another essay) I bought a house on owner contract, fortunately just before the onset of winter which would have been brutal in the bus with a seven year old first grader. I had always wanted to own my own home, and not have to move until I wanted, and now I was the proud owner of a property tax bill. Then I got a slightly better job. And my federal student loans started coming due.
I thought I was getting the right things in place. I had a better job. I was buying the security of a home and the privilege of being a property tax payer. I was raising a small son in elementary school and supporting the hubster with his fibromyalgia. I was keeping the house warm and putting food on the table without one speck of state, federal, public, or tax dollar assistance. We’d even gotten to the point where we didn’t have to ask for food boxes every month or apply for assistance at Christmas or special assistance to pay heating bills through the winter heat assistance programs. When your whole focus is keeping your family fed and housed and warm and clothed federal student loans come low on the budget priority list. And there was never enough to eke out that one extra student loan payment.
I made arrangements on the balances owed to the university and the Perkins loan to make a payment every month. It was never a large payment, five or ten dollars, but something paid on the accounts, and some tough months I couldn’t make even that. It was gratifying to have the balance waived on the university account and get my degree.
When my mom passed away in 2013, I got a very small inheritance from her estate. I didn’t frivolously spend it on myself or take a vacation. I paid the last of the small Perkins loan I had outstanding through the university; the woman who had helped me manage my account all those 15 years baked me a pan of brownies and brought it to my place of work (across the street from her place of work), and the university student loan service department sent me a nice letter of congratulations for closing the account.
The federal student loan gave me forbearances, which meant the account doesn’t just sit there waiting for my payment, it grows every day, getting larger and larger with daily interest accrued. The first few years the account was managed by Direct Loans, then it was transferred to Sallie Mae, now it’s being handled by Navient. Each different company employs a firmer hand than the last; from Sallie Mae on I’ve been inundated with statements and bills and phone calls. After I turned 50, every year when the forbearance negotiation came around I would ask if they would waive the account. I would list all my reasons why I was unable to make payments: small son, disabled hubster, low income, no public assistance for hubster, not a traditional age student already in my late 50s – early 60s and not in the best health, my expenses have never gone down, the whole drill. Many of the account service callers were kind, merely filling out the paperwork line by line and going on to their next call.
They were not always nice. Letters came nearly every week. Dunning phone calls came every day, all hours of day and night. The pressure was encompassing.
Occasionally I would get a loan account service person who saw their job as a power/bullying trip. One man said to me, “With your income you should be able to support a family of six and make a $500.00 a month payment to us”. I don’t know what state he’s talking about here in America, but that is not happening in the Portland metro area of Oregon. My income right now is slightly more than $42,000.00 a year, about $15,000.00 less that the average teacher in the Portland metro area. The son hasn’t launched, the hubster’s physical ability has not had a miraculous change for the better, he still cannot work and we still do not receive any kind of public assistance, my expenses continue to increase though the income has not raised to match. The both of us are still aging and kicking the best we can.
Different federal loan service people offered to garnish my wages and place liens on my property. Yes, as if that might be helpful incentive. Not. I applied for assistance through every avenue I could think of: the honor society I had belonged to, the university’s student loan department, the hubster when he got a small inheritance from his dad’s estate (he spent the money on making sure we had a working car and a safe home). I had borrowed so much money from and owed so much money to my mom, she was no longer a resource.
The federal loan offered a forgiveness program for certain kinds of teachers and public service employees; I qualified for that, but you had to make a minimum payment amount set by them every month for 10 years. I couldn’t make the payment. The program is only 6 years old at this point in 2014 so none of those qualifying and making the payments have had a forgiveness yet.
One time I asked the federal loan service person if I were able to pay off the loan in one lump would they be able to negotiate a smaller amount to close the account. The service person said, “We’re the federal government. We don’t settle.” It reminded me of Lily Tomlin’s “We’re don’t care. We don’t have to. We’re the Phone Company” routine.
I would have loved to make payments. At one point I asked if I could make arrangements to pay $25.00 a month. The federal loan service agent scoffed at me and said it would be like spitting in a bucket. I said I thought they were required by law to accept any payment I sent, and he said of course they would accept the payment; the interest accrual would likely be more than the payment. No gain, more pain. It’s not like I did not think I was responsible to repay this loan, I just could not keep the three of us clothed and fed and housed and warm and clean and working and give my student loan account the payment needed. I never let the loan go into default, always keeping the forbearance current. I kept trying to negotiate a way, any way, to pay for or waive the loan. It was all so very annoying and worrisome.
So. Money well spent on an excellent education turned into a sword of Damocles. Every day I felt I could lose my job or my house because of owing this federal student loan debt. Every year the amount owed increased, making the pressure that much larger. The amount owed was about the same amount as I make in one year’s salary, seemingly an impossible amount to ever repay. It’s one of the elements that prevents me from qualifying for a re-finance on my home mortgage. It felt like there would be no reprieve from this burden of money owed hanging over my head and it compromised the possibility of other financial changes.
I wrote letters to Oregon Senators and Representatives. I wrote a letter to Elizabeth Warren, champion of the people who remembers the day when tuition was small enough to manage at the time of schooling and not crippling a graduate’s life for years after the fact. I wrote to Bill and Melinda Gates, and Warren Buffet, and Barack Obama. I got a nice form letter from Suzanne Bonamici’s office that made it clear an office worker was assigned a job to send every letter writer a form letter though it said nothing about student loan issues.
I got a telephone call from Jeff Merkley’s office in Portland, Oregon. They wanted me to talk to their student loan expert. I talked to the nice specialist for more than an hour and he told me my case is a perfect example of why the way paying for education today is not working for so many students. He encouraged me at the time to use my voice and say so on this blog, to write even more letters as he’d read mine (as he quoted it back to me!) and thought it made the case for change in a good way, and to continue to ask for waivers. But there was nothing his office could do to get the loan waived or forgiven.
The federal loan folks have always been willing to waive my loan under two conditions, and two conditions only. One. I am permanently disabled. Nope, still kicking. Two. I am dead. Ditto. No hope there. I was comforted to know that upon my death the debt would not be taken against my nearly non-existent estate.
It’s pretty terrifying looking at retirement in five or ten years, knowing my expenses would not change, still having the student loan debt over my head at the age of 70 or 80 and with a greatly reduced income and a declining physical ability. My little mind went to worst case scenario places I don’t want to describe here.
If you read me regularly you may remember the hubster’s Aunt Ruth passed away 7, well, 8 years ago now. She had dementia, and we didn’t know what facility she was in or her condition. She was likely clueless about the hubster. We found out about her death last year when an insurance agent was trying to close out an annuity Aunt Ruth had made and found him as the only surviving relative. We located Aunt Ruth’s cremains on a mortuary shelf where she had lived these last seven years, retrieved her from the other side of the metro area, opened probate on her estate, and buried her next to her husband.
Probate can be quick and easy on simple estates or it can be an adventurous ride. Story of my life, this one has been a doozy. Aunt Ruth’s annuity had grown quite large while waiting to find a home; the original amount quoted would have been enough to pay off my student loan, my mortgage, and have a small cushion left over for a couple year’s property taxes and pro-active home maintenance. And with both of us over 60 now that sounded like a gift from heaven. Or Aunt Ruth. Or Providence.
Many of the elements of this estate our current attorney, who specializes in estate and probate cases, had never experienced before. Both attorneys we used had to increase their learning curves as well as we did. We started with the attorney who closed the hubster’s father’s estate and switched to a local attorney, and after going through two attorneys, we got the Medicare/Medicaid bill. Medicare wanted almost to the penny what the inheritance was. What a devastating pop for my little balloon fantasy of financial security as I face retirement.
There was an undue hardship form you could fill out, which the current attorney didn’t think we qualified for and abandoned any attempt to pursue this avenue. I asked for copies of the required paperwork, made more copies for backup, and filled out the paperwork myself, laying out the hardship my family was working through and how this money could make a difference for us.
Technically, we did not qualify. I could read that in black and white. I’ve been so desperate for help I asked anyway. What can they tell you? Yes or no, right? If no, that’s life and you continue to move forward. If yes, godsend, or Ruthsend as the case may be, and you still move forward.
The hubster received a call from one kind and caring woman at the Oregon Department of Human Services who’d read our paperwork and processed the package of required proof-type paperwork I’d sent. She had talked over our case with her kind and caring supervisor and they had talked it over with her supervisor. She said right up front we technically did not qualify for the undue hardship waiver. The hubster answered her questions. She wanted to talk to me because I’d filled out the forms. We talked for nearly an hour, her listening to the efforts I’d made and how they’d worked or not, why we hadn’t paid the student loan from the hubster’s inheritance from his father (what was left after purchasing one used efficient little truck – we only have the one and had worn out our last rig – and much needed house maintenance, the left over amount was too small to make a difference on the federal student loan).
Two days later we received written notification that though we did not qualify for the undue hardship waiver, because of the circumstances they were going to allow and effect payment of my federal student loan out of the estate as part of the probate along with a few other small considerations. The process is almost done. It doesn’t make my finances perfect; it would have been nice to pay my inflated mortgage as well, but that’s another essay. But, it’s oh, so much better a feeling knowing the debt is paid. It matters little that I didn’t “earn” the money through employment. It means everything that family contributed. I hold in my heart Aunt Ruth’s intention all along was to make life a little easier for the nephew she loved.
I’m all kind of amazed at the kindness and thoughtfulness of three female strangers in positions of State authority who took the time to listen to the story of my struggles and do me the honor of believing and supporting my family. I also want to say this is how it should be, not just for me but for all citizens. Jeff Merkley’s office listened and three employees of the State of Oregon listened and actually effected a small but essential aid to a struggling family. I hope they are able to do similar for other folks who need a little help. A little help can make such a big difference. It’s a day of thanks giving for me and soon I will celebrate the freedom of knowing I have paid my student loan and am free from the threat of joblessness or homelessness in debt to the federal government for the price of an education. What an education it has been.
And I’m still learning. Federal student loans are tricky devils. They are designed to create a profit for the government, not to assist students. If you sign your name on the line for one of these loans and you are not already financially savvy, you should probably be required to take a full-term class in modern banking practices, economics, finances. I thought I was going to have some nice interest to deduct on this year’s taxes under the student loan interest line, but there is this little financial trick called interest capitalization, which means interest earned on a federal student loan debt isn’t just interest but through the magic of a little word trick, ta da, *capitalization*, the interest becomes principle, so the actual interest is miniscule and you get little or no deduction because capitalization makes most of the interest become principle. Nice racket.
The intention of the state in making the payment out of Aunt Ruth’s probated inheritance was to zero out the account to free me from this burden. I checked the student loan statement when it came in, and sure enough there was a little tiny balance remaining and a payment due in 2022! I called them one more time and explained the $42,000.00 plus payment was supposed to zero out the account, and I wanted the account to be a zero balance so I would receive no more bills, no more phone calls, and no surprises next year or seven years from now that the account was still open. The little tiny balance is going through the paper work to be waived and the account zeroed out and paid in full. I would have been happy to pay the small balance just to have the whole thing over with, but I am also grateful after paying almost $43,000.00 (yes, you read right, that’s forty three thousand dollars) they could find a way to waive the remaining $77.00.
And how wrong I see our system now in regard to education. Higher education should not be a profit making industry, but that’s exactly what it is. How does an older person go back to college and change careers without incurring huge debt on the eve of retirement? Debt you are legally responsible for and have to pay back even if you don’t get a job in your field. How does a young person face the start of their adult life on minimum wage while owing more than $20,000.00 in student loans? I know some graduates get that high income job and all goes as planned but that doesn’t work for everybody. Many people will delay making a family and a home purchase which delays being a property tax payer which reduces the property tax income for the state. It’s like shooting your foot off because it hurts. It’s really bad math.
Or they default on the loan. Which I can’t blame them for. Once those student loans start accumulating interest and the interest starts capitalizing, the loan amount soon looks like an unmanageable amount. You still have to live. Most of the people I know with student loans do not live beyond their means. Most of them do without so they can pay their student loans.
If education was paid by taxes through the post-graduate level, those graduates could concentrate on getting work and becoming homeowners and property tax payers at a much younger age, paying property tax for a longer period of time, being able to buy more than one home as their needs change – the starter home, the family home, the retirement home – and increasing the overall state property tax income to be used perpetuating the cycle. Which in return would create a more well educated, more dedicated, more secure, and more creative workforce. That’s much better math.
But what do I know? I’m just a 61 year old college graduate who couldn’t figure out how to support my family and pay off my federal student loans until a relative died. The debt is paid and the sword is broken nonetheless. And, no thanks to an attorney who specializes in probates and unprofessionally fumbled her way through the hubster’s case, but by the grace of Aunt Ruth, some applied college education and tenacity, and the kindness of three working women at the Oregon Department of Human Services am I released from federal student loan hell.