Monday, September 12, 2011

Defaulting on Your Student Loans

So many of us have fantasized about defaulting on our student loans. We imagine a collective refusal to pay our debt. We'd do this together, we say. We'd show them. We'd just stop paying entirely, and then the financial institutions who turned us into these indebted zombies would really pay. One reader of mine, a very astute economist, insists that we must revolt in this manner. He calls for a debt revolt on all things, not just student loans.

But then we - the student debtors - stop and think about the co-signers. For those of us with co-signers, we realize we're trapped. We'd have to get our mother, father, or grandparents, perhaps a friends - the co-signer(s) - to agree to this decision. (This is what many of you have said has held you back from committing suicide, something which devastates me every time I hear that admission). Suddenly, default doesn't seem like a possibility, and so we begin to despair.

Recently, I learned that a neighbor had lost his job in construction. I said to my husband, "how is he surviving? It's hard for me to understand. He has no income."

My husband laughed and said, "that's where something called savings comes into play. You know, there are people who've socked away enough money that when bad things happen to them, like losing a job, they can depend upon it."

I suddenly felt beside myself, a feeling I don't often get when it comes to being a debtor, and I said, "We're so screwed. How will we ever have any substantial amount of savings with these goddamned student loans? It's not just us! There are hundreds of thousands of debtors like us. What will happen to us when we're that age and you lose your job or I am diagnosed with cancer? We're over."

So, when you imagine defaulting. What's your initial feeling? Does it change? Do you always feel the same about the idea of doing it?

Also, here's a real shocker. Student loan default rates have risen sharply. Gee . . . wonder why . . .  What's Arne Duncan's brilliant response to the student lending crisis?!? He said in a press release, ""These hard economic times have made it even more difficult for student borrowers to repay their loans, and that's why implementing education reforms and protecting the maximum Pell grant is more important than ever. " Perhaps "education reforms" means helping current debtors? I'd love to be wrong, but I seriously doubt that is what this man means. And how will protecting Pell grants help those of us drowning in debt, jobless, and already out of school?!? I don't see the logic, Sec. Duncan. Once again, the department comes off as sorely out of touch and incapable of solving the crisis, even though they could be instrumental in help us.

Related Links

Bob Drummond, "U.S. College Loan Defaults Highest Since 1997," Bloomberg News (September 12, 2011)

"Now Is The Time To Invest in CURRENT Borrowers," AEM (September 1, 2011)

Riiight. In my dreams . . .
Artist: Dave Coverly 


Rhonda K. Donaldson said...

I went here and calculated how much the student loan people would get if they garnished my wages. I send them that amount every month. As long as I am paying something, I understand they can't default me. If this is untrue, they will still only get what I am paying them now. It's not a win win situation, but it is one I can live with and actually pay my bills with 15 bucks left over for gas and food. I have slowly whittled away at my credit cards and paid all but 3 off. It isn't easy...the weight gain from buying food that will stretch out all month doesn't help. I don't eat out nor do I go to the movies unless it's a treat from someone else. What I would like to see is an end to all this so I could save some cash and marry my boyfriend and have a child or two. But the way things are going that isn't gonna happen anytime soon.

Cryn, keep up the hard work! I know it's tough but if we all hold it together we can prevail. Thanks for what you do!

Anonymous said...

I'm well on my way to defaulting. I've been robbing Peter to pay Paul for so long now, there is nothing left to "rob" an therefore, nothing to pay.

I tried to refinance my car to squeeze out an extra $150/mon, but I can't get a refi loan b/c of my debt to income ratio.

I hate to bring my mom down with me. She is unemployed and can't float the payments either. She's worried about her age and credit keeping her out of the job force.

I already feel like my paychecks are good for so little, if they garnish my paychecks, I have even less incentive to work.

I just get so frustrated because I got to the point of having so much student loan debt because I was trying to be responsible and work hard to make my life better.

Now I feel as if I would be better off -that I could afford to be poor - if I was a manager at McDonald's instead of having a masters.

I try to be hopeful about my future, but secretly, I'm very depressed. If it wasn't for my kids, I don't know that I would bother to try anymore.

Cryn Johannsen said...

@Rhonda - thanks for your kind words. We need to keep on fighting!

@Anonymous 4:47 PM - thanks for sharing. This can be very demoralizing. But we're here fighting, and we're not alone. That's what counts. I refuse to leave the country, so I am living with my in-laws to make this non-profit work. It's worth it - this fight is critical. Don't give up. Your family needs you. Hang in there. You're stronger than you think.

But I do understand. After the 10th anniversary of 9-11, I thought, "this country is exhausted. We are fighting endless wars, and we are no longer investing in our own country. I'm exhausted, and I know I am not alone."

We need to turn things around. We need to start investing in our people and in our communities. That means that the indentured educated class needs support. It needs it badly.

AtheistATLLawyer said...

Defaulting on student loans? I have no choice! When you make 10k a year as a "lawyer" do you think you can pay back 75k in student loans? Of course not!

What are they going to do?? I don't plan on ever paying back my student loans. Fuck the shitty gov't and fuck this awful country.

This is the result of the law school scam. Patriots turning their back on this "country" BECAUSE IT IS SHIT.

It was all a lie. And now I know. Too bad I just figured it out. At the ripe old age of 27.

Anonymous said...

Default, for me, tacked an extra fifty thousand dollars on my loan, which made the loan top 250K, and pretty much put the finish line too far out of reach, or all hopes of paying the loan off in other words, barring a miraculous windfall such as a lottery win, or finding a buried pot of gold with my metal detector.

Or discovering an oil well like Jed Clampett.

Cryn Johannsen said...

@AtheistATLawyer - I feel your rage. That is why I am doing everything in my power to raise holy hell about this situation.

I know a lot of people are defaulting and have defaulted because they had no other choice.

It's disgusting and wrong and we need to do something about it.

I don't say fuck this country, because there are too many great people here.

The remembrance of 9-11 and how people sacrificed their lives for others is proof of that. And in saying that, I do think it's despicable the way in which the Bush Admin turned that into something else in the years that followed, and Budweiser had ads last night to buy their beer by using 9-11 images (fuck those assholes). That's all shit. But you know what isn't shit? Those people who decided to take down United 93. Those were good people. The people who helped each other out of the towers. The first responders who gave such a shit that most of them DIED under melting rods of twisted steal in order to evacuate others. As people went down the stairs, those men and women WENT UP. They went up because that was the right thing to do. In a small, Irish neighborhood that was hit the hardest, police men there watched out for a shop owner named Mohammed. They were worried that he'd be targeted, because he was from Lebanon. You know what? He wasn't, because people had opened up their arms to him years earlier when he opened a bagel shop. 9/11 didn't change that for him, and he's still there and happy to be part of that community. Someone could come back and accuse me of being overly-sentimental, but I say screw that. This shit MATTERS, and we need to remind ourselves of the fact that there are good people out there and that they do good things for one another.

That's why this fight is worth it, because there are lots of great people who don't deserve to be a part of this bullshit system. We need to band together. We need to remind ourselves of what it means to look out for each other. We need to revive democracy. I know. I know. I know. It's always been bullshit. Perhaps that's true. But at least we TRIED to live up to certain ideals and principles. We need to get back to the basics and reclaim those things.

We need to insist that our institutions reflect the good things about us, and that means that you and others who have defaulted should be given a break. You don't deserve this shit.

Yesterday reminded me of a lot of painful things, especially the way we went to war for no reason in Iraq. So many lives lost. So many innocent lives. At the same time we stopped investing in our communities and people here. It's painful, because it's the opposite of how people responded on that dreadful day. They should be our role models, because they gave a shit about one another. And as a result of giving a shit, there were lots of people who survived that event.

I give a fuck about this country because it produced Father Mychal Judge -

We need to think about how we can give a shit and then demand change.

I'm exhausted and tired of this bullshit too. We don't deserve to suffer under these economic conditions. It's un-American.

Nando said...

We need to hang these banksters and "higher education" pigs, by their thumbs. I'll bring ht brick-bats.

Rose, Esq. said...

"We'd have to get our mother, father, or grandparents, perhaps a friends - the co-signer(s) - to agree to this decision. (This is what many of you have said has held you back from committing suicide, something which devastates me every time I hear that admittance)."

This is just devastating to read. Shame on everyone who is a part of a system that drives our nation's most promising people -- those with the intellect and motivation to pursue higher education -- into such a hopeless state.

I thank God every day that I opted not to have cosigners for my students loans. Not because I am suicidal (I'm not) but because if things ever hit rock bottom my family will not be on the hook for my loans. Cryn, thank you so much for having a forum for those of us who are drowning in debt. There are so many of us: good, hard-working people who did what we thought was right. You may not have a huge savings account to draw from, but the advocacy that you do is priceless. <3

Anonymous said...

Whatever happened to Suze Orman's alleged plans to do an update on Student Loan debt?

Anonymous said...

It is 475 AD, next year is 476AD.
Did the Romans suddenly all leave? Did the Romans suddenly stop farming? Did all trade suddenly stop? No. It just got a little worse every year and generation until the Forum collapsed and the stones were pillaged for pig stalls.

One Who Survived said...

Cryn, I partly disagree with this bit you wrote:

"I give a fuck about this country because it produced Father Mychal Judge"

But I say, the USA did not "produce" Father Mychal Judge; God did. And as for the temporal culture that produced Father Mychal? It was first and foremost CHRISTIANITY, and only secondarily

I wish more Americans, including American Catholics...

...(I am not presently accusing you, Cryn, but I AM accusing legions of American Catholics who have very f---ed up priorities between the Church and "USA")... I was saying, I wish more Americans would remember the historical fact that what they assume to be "American" values - like equal rights, and liberation of slaves - were NOT invented by the USA in 1776 or 1787. Rather, those putative "American" values are 100 percent of Christian origin, including traditional Protestants (the ones who mainly settled what is now the USA), whose values in turn are ancient Christian values (and particularly Augustinian-Christian, the values of Catholic and traditional Protestant and Orthodox Christians.)

Modern Age "Science" does NOT give any empirical evidence for how or why we ought to care about equality or Human Rights. If anything, Modern Age "Science" says the opposite, as Hitler and Lenin correctly deduced. There is NO "Scientific" empirical evidence for any MORAL claim of how and/or why the weak should not be exterminated by the strong!

And so, in light of the above, when Thomas Jefferson wrote, "We hold these truths to be self-evident, that all men are created equal", he was in fact stating a claim based on FAITH, NOT SCIENCE! And his faith in the moral equality of Man, was based upon his Christian heritage.

Christ's teachings about the categorical equality and dignity of ALL Humans, WAS UNPRECEDENTED in His time! (And no, there were NO Buddhist (nor any other) precedents for it; if anyone wants to argue with me about that, then please do so on a different thread. And don't even get me started on bloody Hinduism, an arrogantly and PROUDLY Racist religion!)

Until the advent of Christ into the World around 2,000 years ago, absolutely NO culture in the world - NONE - believed in 100 percent mercy for 100 percent of all Humans. (Even Jesus' Judean/Hebrew compatriots only believe in mercy for their own nation, NOT for "the Others") The FIRST person in all Human history who ever taught total equality for all Humans - and total mercy even for enemies, "Love your Enemy" - was Jesus Christ of Nazareth.

(Anticipating objections by "multiculturalists": Yes I know, for example in the Baghavad Gita, Krishna teaches something like "All is one, and you are inseparable from your enemy." But Krishna did NOT teach LOVE of one's enemies, nor any mercy for them!)

No, Jesus taught something totally unprecedented, about total, UNRESERVED mercy and compassion for all.

But in Jesus' time, the Romans had evolved culturally to come CLOSE to such an ideal - which is why God chose Rome to become the worldly capital of His Church. And so, here's a historically plausible example of the civilisation into which Christ was born - oh and by the way, I'd like to imagine Cryn as a kindred spirit of Atia (the proud mother of Octavian!), because in THIS world, I think there are some times when Cryn ought to tell her enemies, "I don't give a fuck about what you say!" ;-) :-)

Here ya go:

Lysander said...

It has been observed, and I think bears repeating, that if student loan debt can truly fit the definition of usurious and that we are, in fact, an indentured class, then we are not meant to pay these loans off - EVER.

We need our co-signers on our side, not only for our sake, but for their sake too. How many of your parents still work? How many of your co-signers actually have good credit still? How many can actually afford to do something with their good credit (like buy a house or car)? How many do or will need your help in advanced age?

If we can make ourselves "too big to fail" we just might stand a chance. In the mean time, we can pay ourselves first, encourage our co-signers to do the same and wait for the banks to go through the due process it would take for them to garnish our collective wages - assuming we even have jobs at that time.

We are rapidly approaching a time when we literally have nothing left to lose. When conservatives tell us to eat cake, we need to let them know we meant to take the first bite out of their doughy white asses.

This is Fight Club, people! We serve and cook their food, we park their cars, we care for their children - we are the infrastructure they base their decadence on. We are the hands that built Metropolis and we are the hands that can tear it down too.

I am NOT advocating for violence, I AM advocating for a motion, a statement, a demonstration so bold and dramatic, and perhaps extreme, that they have no choice but to hear us.

Collective default? Count me in!

One Who Survived said...

PS to my above comment,

And THIS clip from "Rome", titled, "About Your Father", is very close to MY heart, vis a vis my own daughter whom I was not able to introduce myself to until she was 9 years old (because she was born in a country other than mine - a country I was not permitted to live in - and her Mother lied to her about who her real father is, until I was able to tell my daughter):

One Who Survived said...

Strictly speaking this is "off topic", but I think Cryn will agree with me that it's very much on topic:

The final scene (17 minutes) of Akira Kurosawa's last and final movie, "Dreams"; this particular and final scene entitled "The Watermill Village" to my mind expresses and encapsulates the ultimate ideal to which Cryn and many of her friends are striving:

AtheistATLLawyer said...

One Who Survived,

O rly? Christ-insanity?

Let me help you "learn" something.

"Cursed be Canaan! The lowest of slaves will he be to his brothers. He also said, 'Blessed be the Lord, the God of Shem! May Canaan be the slave of Shem. May God extend the territory of Japheth; may Japheth live in the tents of Shem and may Canaan be his slave'. " -- Genesis 9:25-27

"When a slave owner strikes a male or female slave with a rod and the slave dies immediately, the owner shall be punished. But if the slave survives a day or two, there is no punishment; for the slave is the owner's property." -- Exodus 21:20-21.

"Your male and female slaves are to come from the nations around you; from them you may buy slaves. You may also buy some of the temporary residents living among you and members of their clans born in your country, and they will become your property." -- Leviticus 25:44-45

So much for your cult err, I mean "religion" am I right? You religious freak?

But AtheistATLLawyer, those verses are from the old testament! Not the New testament. we go!

"Who then is the faithful and wise slave, whom his master has put in charge of his household, to give the other slaves their allowance of food at the proper time? Blessed is that slave whom his master will find at work when he arrives." -- Matthew 24:45-46.

"Slaves, obey your earthly masters with fear and trembling, in singleness of heart, as you obey Christ; not only while being watched, and in order to please them, but as slaves of Christ, doing the will of God from the heart." -- Ephesians 6:5-6.

"Slaves, accept the authority of your masters with all deference, not only those who are kind and gentle but also those who are harsh. For it is a credit to you if, being aware of God, you endure pain while suffering unjustly. If you endure when you are beaten for doing wrong, what credit is that? But if you endure when you do right and suffer for it, you have God's approval." -- 1 Peter 2:18-29.

I rest my case your honor.

Draken Korin said...


Well said. I too, forcefully am pushing for the Collective Default.

I differ from you in that I *DO* advocate violence - where needed - for as has been pointed out by someone else, America has become a culture of cruelty, and, as you said, ..."We are rapidly approaching a time when we literally have nothing left to lose. When [the predatory class] tells us to eat cake, we need to let them know we meant to take the first bite..."

So I say, Collective, Intentional Default definitely - to bring them down - and YES to striking back with an iron hand against the cruel is *justice* - it is not wanton violence, it is *correct* violence-of-action in defense against threats to our welfare.

Draken Korin

Agile said...

Good information on education. Keep going on...Education is very important to every human

warwick555 said...

It is obvious from all the statistics out there as well as the horrifying antidotes that this is an insane situation. I am fortunate that I qualified for IBR for my government loan student loan payments, but I foolishly signed private loans back in 2006, not realizing that the 2005 law said the creditor could collect unless I was dead -- no matter what the circumstances. Fortunately, the institution I attended turned out to be fraudulent, but now I have to prove that in order not to pay the loans. They haven't come after me yet, probably because a lawyer I hired called up Sallie Mae and detailed the fraud charges against that school. However, I still find myself worrying about the situation. I find comfort in praying, although I understand Mr. Atheist, because that's how I was until I had a spiritual experience. Until you have one, no argument or teaching can persuade you that God is real. Once you have one, no amount of atheist arguments can talk you out of your belief (unless you disable your brain with drugs or alcohol, and then you might see little pink bunnies hopping around your bedroom).

Anonymous said...

While there is merit to the idea that we all stop paying, those of us who have rolled the debt into the new govt program would be garnished within 90 days.

If you really want to cause financial injury to the system, you need to organize a "sit this one out, semester."

Highly unlikely enough momentum/publicity could be generated to get all college students to sit a semester out, but stranger things have happened...and let's not forget the universities who were complicit in this crime...welcoming the gifts and baubbles from Sallie Mae, GLHC, etc. in exchange for promoting their instruments of destruction.

Anonymous said...

I want to be part of a mass student loan default revolt. Let us organize it, get the word out, set the date. Stop "just" talking about it. It's scary as hell, but let's do it, damn it. Let's do it now. Who's with me?

Anonymous said...

Let's start our revolt in the new year. January first. We have enough time to organize it. What do yous think?

Anonymous said...

People, check out this article, "College Loan Scam Flow Chart." Here is the link:

I really think we need to stick together and stand up to this. If we don't, we will be allowing this same corruption to be foisted onto our children and grandchildren. We will allow it to be foisted on each other's children. We cannot fail these generations.

It is clear that no one is going to stand up for us. All of our lives we have been taught by the great leaders of our culture
NOT to support unjust laws. It is our duty.

Since this injustice is happening to us, we are complicit in the crime if we don't stand up against it.

We also need to be accepting of people who, for their own reasons, cannot join us in revolt, but who would if they could. We have to fight for them too. There are enough of us, even if everyone cannot support the revolt.

Thank you.