I have ~$100K in student debt...from undergrad. A very long story with legal, emotional and financial questions after the jump.
This will be very lengthy. Apologies in advance.
Too make a long story short, I grew up in a very small town in the midwest, the sort that no one ever leaves. I worked extremely hard growing up to gain acceptance to an elite university far from home, which I did.
This was during the height of the easy lending boom. My situation was common: my father made too little to simply pay for me to go, but made too much to receive any significant aid. And so, in order to go, I was going to have to pretty much take it all out in student loans.
Now, I really knew nothing about finances when I was 18. I was a heady intellectual kid who lacked a lot of common sense and life skills. Furthermore, my acceptance to this far-away elite school was foreign not just to my family but to my entire town. I was like the hometown hero, and I was told by most everyone that it would be worth it, that student debt is 'good' debt, that 'what an opportunity!' etc, etc.
Couple that with aggressive marketing by the largest lender in my home state, especially aggressive marketing for private loans, and my own determination to attend this school, I signed the papers for the loans I supposedly needed to go - not really understanding (at all) what I was getting myself into. I'm not trying to make excuses, just trying to explain why and how I got myself into this situation.
School was a shock. Having been pretty isolated as a kid, I was pretty surprised to discover that most of my fellow students had parents who could just write checks for their tuition, give them large amounts of spending money, etc. Not wanting to let myself, my family or my town down, I just buckled down, worked very hard, and didn't really make many friends or 'connections,' as I didn't have an extra dime to spend going out, etc. I was awesome at school. I graduated with a near perfect GPA, two majors, etc. I had planned to take a year off and then hopefully enter grad school and pursue a career in academia.
But then my student loan payments came due, and for the first time I really realized how fucked I was. I had never been completely financially independent, had never really understood what 'wealth' was, and learning all of this the hard way was, well, very hard. Suddenly grad school became not an option, as I didn't want to take on more debt. While many of my fellow students had the leisure to travel abroad a bit after school, wait for a job they really wanted, take some unpaid internships, etc., I had to immediately take whatever jobs I could find. Most of my loans are private loans, which makes deference, forbearance, and forgiveness essentially impossible. Around this time I basically had a huge breakdown. My life and my dreams felt crushed, I felt hopeless, alone and downright angry. It became hard to more forward.
To make matters worse, of course, the economy collapsed just as I entered the workforce. Finding a job as a recent grad with no experience was next to impossible. My parents weren't able to help me out at all, so I worked odd service jobs until I got an office-y job in the non-profit sector. It isn't at all what I had seen myself doing with my life, I really don't like it all that much, but I don't have many options. I make a small salary, but it's enough to meet my minimum student loan payments - which barely cover the monthly interest. I have health insurance and got on meds - which have done wonders - and I feel a bit less anxious about the whole thing. But still, not a day goes by that I don't think about it, that I don't feel regretful and hopeless, that it doesn't give me little moments of panic.
I'm smart, talented in many areas, and very hard-working - yet my future looks increasingly bleak. Things like going to grad school, buying a house, starting a small business, taking any sort of risk feels pretty much out of the question. To make matters worse, a year after I graduated, my alma mater started this program where students from families making less than $100K a year either paid no tuition or very little. Coupled with looming student loan reform, I get into a bad cycle of self-pity - like I feel I did everything right growing up, and largely in part due to timing (economic, political), I screwed myself by just trying to get a great education.
My questions are:
1) Legal (YANML/YANAL): in the past three years (coincidentally the years since I graduated), my private student loan lender has come under state and national scrutiny, and is often cited as the apotheosis of the broken student lending system. There's been a deluge of scandal surrounding the firm. Emails were subpoenaed which detailed the firm's plans to "very aggressively" market private loans to students and families, turning them away from safer - and cheaper - government-backed loans. Myriad ethical complaints have been filed against them, accusing them of false advertising for marketing themselves as having "the cheapest school loans in the nation," which is untrue, for not giving adequate information to students before giving them loans, for persuading students to take private loans instead of government loans, and for making students borrow more money than they need. They've been attacked for not being transparent in the slightest, for paying executives and board members extravagant salaries even as students of this state had the highest student debts in the country, and for seating board members who had conflicts of interest. The state issued a mandatory audit (which i think is still underway), forced the removal of several board members, etc.
On top of the ethical concerns surrounding my lender, the school I attended was also part of the financial aid workers taking kickbacks scandals. While I have no proof that this occurred between my lender and the financial aid office of my school, it's a troubling side note.
Now, I know that I and I alone bear responsibility for this mess - and I'm not looking for an easy legal out. On the other hand, I am growing increasingly concerned, the more I research the allegations, that the money lent me was done so in an unethical way. I was one of the students they aggressively marked private loans to, persuading me it was the best option, that it was necessary for me to do if I wanted to go to school, etc.
Granted, any sort of hard proof beyond ethical accusations, the state audit and lots of terrible press, I don't have any hard evidence that anything explicitly illegal took place.
Is is worth contacting a lawyer and discussing possible options or actions in this regard? Are there other ways I might use these allegations to negotiate different loan terms? If so, what other information might I need and what would be the best way to proceed? Or is that a terrible idea and I should just let the legal thing go and accept it?
2. Economics. I work a full-time salaried job + a small part time job in order to afford living. I make about $2,200 a month and pay $700 on my student loans (I'm on a gradation plan - my payments will go up every year). I save a little each month, which is tough, and I live like an ascetic. Given the job market, I don't see myself being able to find a higher paying job anytime soon. I have no other debts or financial obligations, and don't plan on acquiring any.
Outside of continuing to pay and not default, do you have any other advice on how to manage this debt? If I had to pay the whole thing, what would be the fastest and most efficient way to pay it off?
3. Emotional. The debt is like a chain. I struggle with some pretty serious depression and anxiety to begin with, unrelated to the debt, which I sort of manage with medication. The debt on top of all of this just makes things worse. I have an amazing partner I've been with for some time - and we are very happy together - but I worry that by not leaving her I'm holding her back from a prosperous life. because of the debt I carry. She's very supportive and reassuring about the whole thing, but it eats at me.
Lastly, what are the ramifications of moving to Mexico, Canada or overseas and simply leaving the debt behind? I know this seems like a terrible idea on many fronts, but desperate times call for desperate measures, and I'd be lying if I said I didn't consider it with some frequency.
I know - I made my bed and now must lie in it. But advice on how to deal with the aforementioned issues would be extremely helpful and encouraging.
Throwaway email: arthur dot mcpants at gmail dot com.
Thank you for reading this short novel. You guys are the best.