Our Struggles with Private Student Loans
Last winter, the Consumer Financial Protection Bureau asked students who took out private loans to finance their education to send them comments about their experiences. The CFPB published those comments earlier this week, and I’ve been going through the documents to read what people have been struggling with (I also have about $20,000 in private student loan debt):
I am 24 years old with $69,000 in principal debt and when it is all paid off I will have paid over $100,000. I was not eligable for federal student loans or student aid in any way because FAFSA is solely based on my parents income. My parents were not willing to pay anything towards my education so I was forced to take out private student loans with high percentage rates. This needs to be fixed. I work as a sales rep making $33,000 a year. I struggle to just make my student loan payments.
Private education loans are terrible. I cannot consolidate again, there is no loan forgiveness. I’m trapped with terrible loans for an education which is going to stick with me for 30 years. This is why our country’s economy is failing. I have basically a 2nd mortgage payment of student loans and there is simply no hope for coming out from under this burden. Why do we operate this way? How can you live life to the fullest when these loans suffocate the life out of you?
I took out private loans for part of undergraduate and for Arabic language study while in grad school. I later found out that there were other funding options that should have been available to me. My dad co-signed the loans for me from Citibank and then when I was done with school, I was pushed into consolidating at a 9.2% interest rate and my payments are outrageous and there’s no way of lowering my payments at all. I work for a public library and am doing public service loan forgiveness for my federal loans but every time someone accesses my credit report (for apartment rental, car buying etc.), I am usually turned down because of my private loans.
My federally-backed student loans have been the bane of my financial life. Companies buy and sell my student loans without my consent and charge me ridiculous fees and interest rates regardless of what the government set in place. They have the authority to dip into my paycheck and tax refunds if I don’t pay them in a timely fashion, and for those who experience unemployment gaps the interest grows at an uncontrollable rate when you’re unable to pay. This kills personal finances, artificially inflates Americans’ debt, and ultimately contributes to killing the American economy. If you ever want to help real Americans instead of picking winners and losers by bailing out huge corporations, this is one area that will have a huge impact in stimulating the economy. Give the consumers of our economy some room to breath and continue to put money back into the system with day to day purchases.
I am cosigned on 4 Sallie Mae student loans for 2 of my children.Since I cosigned these loans, I have become unemployed, had a home foreclosure and filed for bankruptcy.These loans of course could not be discharged via bankruptcy and I remain responsible for them.My son graduated school with an Associate of Science degree and is delivering Chinese food.My daughter graduated with a bachelors degree and found job as a Director of a daycare center, she makes $10.00hr. Needless to say that both of them are struggling to live and their student loans are crushing them.They understand that I’m on the hook for them and make every effort to make their payments as scheduled on time.But with this economy, rent, food and transportation over-rides the student loan payment.That’s when my nightmare starts. Once they are 1 day late my phone explodes with calls from Sallie Mae, they do give even enough time to answer the phone and leave a recorded messages to contact a loan specialist to work out MY delinquency. They continuously threaten to report the late payments to my credit (which is already destroyed by my own financial crisis). They are relentless and the calls start at 8am and can go until 9pm. My fear is that if one or both of my children should default they will come after me and I have no means any longer to pay these loans and no way to escape them, they will follow me probably to the day I die.