What does student debt really look like?
One place that you can get the kinds of hair-raising stories that show what so many borrowers are dealing with is Reddit, the forum-based site where everyone’s ideas and opinions get up-and-downvoted across the web.
You can really imagine the heartache caused by these types of student loan problems when you hear real people’s stories.
Real-life Experiences Shared By Reddit Users
“I got fleeced by my first school I went to for a bs degree that didn’t even net me a real career,” writes Scooblyboop in the r/Frugal forum. “The school lost its accreditation right after I left and closed its doors after multiple lawsuits. I had to go back again and struggle to get through my 2nd round of school to get somewhere but set myself back even more with debt.”
This is NOT an unusual situation, either. One of the borrower categories that the Biden administration is trying to help right now is people who attended a school that just didn’t deliver on its promises, in one way or another.
Scooblyboop explains: “I feel like they took advantage of us at an impressionable age. ‘They’ being the schools and loan companies. I was not prepared in high school or taught about any of this. … I fought really … hard to even get to where I am. Higher education is a racket for how it’s currently set up, and even though I was able to finally pay my debt off today, I still feel angry and frustrated with this system.”
The Challenges Borrowers Face With Student Loan Debt Over The Years
This poster also gives the following background of the long and tortuous history of the debt itself:
“I have been repaying back loans that go back to 2008. At one point in time, I could barely afford to pay the minimum back. Made payments for 8 years straight at one point, and found out that I literally was not making progress with knocking down the principal. It was 8 years of never missing a payment and I pretty much still owed the same amount and I realized how much I wasn’t prepared/taught before I took out student loans. These loan companies know exactly where to disperse your minimum payments across the loans to make sure you will really never stop paying them.”
It’s so true: lots of borrowers feel this way, like they encountered some kind of bait and switch.
The Impact of Inadequate Education
“I owe $62,000 in student loans through Nelnet on the income based repayment plan,” writes redditor jnfamhubby. “The payments are estimated at $770 per month, with interest rates from 4% to 9%. With daily living and child support I am already strapped for cash. What happens if I pay a little every month? What happens if I don’t pay any? My parents agreed to pay up to my Bachelor’s degree which accounts for $7000 of the $62000. What happens to their credit?”
And that’s not unusual, either. More than a few borrowers feel so beaten down by the process that they are considering underpaying what the account is requesting. Again and again, you see that people are protesting a situation where they simply were not warned about the predatory nature of student loan debt early on.
“I wish I would’ve known what a financial hole I was digging myself into when I chose my college,” writes SistaSaline. “I feel like the student debt is haunting me and has me in a chokehold.”
The Role of Cosigners
This borrower also has a co-signer, which can complicate the situation.
“I have almost 30K in my name and my mom has 106K of Parent PLUS loans in her name,” she writes. “As of right now, her monthly payments would be around $700. At some point, she consolidated all of the Parent PLUS loans into one Direct Consolidated loan. This means the only IDR plan she’d be eligible for is the Income Contingent Repayment plan, which will take 20% of her income. She makes around 40k and is (I think) in tons of credit card debt, so even that might be a lot. The plan was always for me to pay off the Parent PLUS loans. But, I don’t think I could even pay 20% of her income. I make 38k in a high cost of living area – and that’s with a recent raise, so I don’t even know what my take home pay looks like yet. … I just can’t see a way out of this.”
The Burden of High Monthly Loan Payments
In some cases, the monthly student loan payments are like another mortgage, which is untenable for most borrowers.
“My private loan has a monthly payment of $1,124 over 15 years and my government loans will have $326.60 when they resume,” writes poster GammaHuman at r/ApplyingtoCollege. “I went out of state to attend a school I thought I would enjoy more. … I graduated a year early in 2020 because I realized how much I could not afford to stay an extra year to do a dual degree. The dual degree would have been in what I enjoyed studying, and not just the business management degree that I have.”
The Emotional Toll of Student Loan Debt
Then, GammaHuman addresses the reality of dealing with looming debt.
“Honestly, I’m not sure what’s best to write here. … I’ve made it somewhat. I did 3 job jumps in the last 2 years and went from $35k to $55k in salary from the 1st to my current one. But that hasn’t taken away my financial anxiety. Money is a MAJOR source of anxiety. There have been multiple times over the past two years where I dealt with extreme depression, anxiety, and suicidal thoughts because of this debt. Even now that I’m ‘more comfortable’, I still struggle a lot to feel safe. I have a monstrous amount of debt. The size feels insurmountable. I can think in my head ‘oh in 3 years I’ll be making enough that I am comfortable’, but I emotionally don’t feel that way. My heart is still sinking writing this.”
You can feel the emotion in this testimony, and in others, where borrowers anguish over debt they feel will never go away.
Owing More Than What You Make
“I currently owe more than I make monthly in private student loans,” writes PuddledPickles. “With roughly $500 a month being (sic) an interest-only loan. I cannot even afford the interest payments on these loans. I recently went back to school to make sure they don’t default. However, they were marked as defaulted anyway, and I’m in the process of disputing this as I technically started as a student again and thus only $500/month in interest on the one interest only loan is due. I have tried calling, and of course they offer no options, other than it will go after my cosigner and tough luck. I have tried applying for refinancing but can’t because of the hit my credit score has taken. My cosigner lost all ability to work and is permanently disabled now. I desperately have no idea what to do as these loans have damaged my credit to a point where I can no longer rent an apartment, open credit cards, etc. I am in a career field where my income could be high enough to make payments on these in 5 years, but that’s a big maybe if career trajectory is great. At the rate things are going, I’m scared I will be financially insolvent.”
Resources and Opportunities to Navigate The Challenges of Student Loan Debt
Unfortunately, these kinds of stories abound. But some of the resources and opportunities that we cover on this site have saved millions of borrowers from the pressures of being broke and in debt. So keep an eye out, and know your rights when it comes to your student loans!
