How do I deal with private student loan debt I can't pay?
March 19, 2011 9:15 AM   Subscribe

How do I deal with private student loan debt I can't pay?

Hey all. I posted about some of my loan troubles before, and was grateful for the help I got. Things have changed a bit since then though, so I'd like to refine the question a little.

I owe roughly $27,000 to Sallie Mae in the form of two private student loans. Money is relative: to many this might not seem so bad, but to me, right now, it's a hell of a lot of money.

I owe another $25,000 in federal loans, but thanks to IBR that's been frozen until I can get a decent job. Still, it's debt that will have to be repaid eventually, and debt that shows up on my financial history.

The problem is pretty simple: I can't afford to make payments on my private loans when they go into repayment in May. There was some confusion in the first thread, so let me be clear: I really can't. I gross $700 a month, and all but a trivial amount of that goes to food/shelter/other basic needs.

I have very little chance of getting a decent job in the next few years. Six years of college, but no degree, and now I'm out of time and money. And even people with impressive and deeply "practical" education are struggling to find decent work right now.

What's worse is that I'm cosigned on this with my Mother. She makes more of course, but she also has more bills to pay, and my brother to support, so she's not in any position to deal with the payments. And I don't want her to suffer for my failures/mistakes.


I've called SM several times and gathered the following: they can't discuss specifics until 48 days before repayment starts (lovely), but offer that I can pay monthly "penalties" of $100. That's half the normal payment, but still far to much for me to afford, and of course it doesn't count toward the principle at all, so I'd be pouring money down a black hole.


Also, for those who don't know: Private student loans are, legally, almost impossible to get out of. Can't be discharged in bankruptcy (except in obscure and almost impossible to get conditions), can't be negotiated down, can garnish wages and trash credit score once they default, etc.

What on earth can I do? Hire a lawyer (the law seems to have no protections for me, and the fees would probably start to approach the loan itself anyway)? Sell all my possessions and live on the street the rest of my life?

I'd love nothing more than to get a real job and start paying everything back, but I haven't found a way yet, I don't know when I will, and when I do get an opportunity it will almost certainly take time and money to take advantage of it. What are my options, besides to, as Hunter Thompson so eloquently put it, "Eat shit and die"?
posted by wanderingchord to Work & Money (20 answers total) 8 users marked this as a favorite
 
A couple options:

If you are grossing $700 per month, that's 24 hours of work per week at the federal minimum wage. If you got a second minimum wage job at, for instance, a fast food place and worked 7 hours per week at that job, you would make just over $200 more per month and be able to pay your loans.

Alternatively, you could move in with your mother to reduce your living expenses and use the money saved to pay your loans.
posted by Juffo-Wup at 9:28 AM on March 19, 2011 [2 favorites]


After reading this thread and your previous thread, I agree with Juffo-Wup: get a second minimum wage job if you have to, but do whatever you can to work 40 hours a week. Move back home to reduce expenses (I did this after school, as did most of my friends--those who did are the most financially solvent).

As someone who graduated with about $50k in student loan debt, I know how scary it seems at first. But once you get into the habit of making regular payments (which you'll be able to do if you do the above), it's much more manageable.
posted by PhoBWanKenobi at 9:34 AM on March 19, 2011


Juffo said it before I could, but getting 40 hours a week work is step one to getting up on your feet. If you can do it, even work 60. Anything to drive the income up. Fast food places, factories, landscaping shops (this time of year especially), hell, ride the garbage truck and be a sanitation worker, any sort of trade that you can physically do. Have a hobby that you like to do, and it's something you could make money in? Do that. Get the income flowing any way you can. Once the income increases, the out-go can increase and you can attack these debts.
posted by deezil at 9:35 AM on March 19, 2011


For the record, I've known people without degrees who were able to pay off the same amount of debt on high interest car loans. This isn't insurmountable. I promise.
posted by PhoBWanKenobi at 9:37 AM on March 19, 2011 [2 favorites]


When I had my Sallie Mae loans that I had to repay but couldn't afford the payments I was able to put them into deferment. I was able to put my private loans from Sallie Mae into deferment for 6 month periods and had a total of 60 months which I could defer the loans for. You will end up paying more in the end but it can help you save money now and not worry about it so much. I hope that your loan can be put into deferment to give you some time. Also seconding getting a second job, it will give you less time to think about loans and make some money.
posted by lilkeith07 at 9:54 AM on March 19, 2011 [1 favorite]


Response by poster: I appreciate the suggestion to get a second minimum-wage job, but there are a couple problems with that.

First, getting a second job isn't as easy as you may think. Prior to getting my current one, I was applying to exactly the jobs you describe, some minimum wage, some slightly higher, for months. Almost none of them even gave me a call back. I've been applying (albeit at a slower pace) for several months recently as well. Again, nothing.

Second, even if I was able to get a second job, I would have no time left to try to improve my situation through further education (something more basic obviously, some sort of skilled trade) or something similar. At my default payments, it would take ten years to repay SM, possibly more once the extra interest and who knows what else is factored in.

Third, I suffer from clinical depression, which isn't helped by this and which makes working 40, let alone 60 hours a week in minimum wage service jobs (arguably some of the most miserable there are) a lot more difficult than it would be for the average person.

Fourth, moving back in isn't an option. The relationship there is awful, and that aside my Mother can barely support herself and my brother, let alone find space for me.

In short, I'm trying to get a second job. I could/should try harder. But it hasn't happened yet, it may not happen for some time, and when it does happen I'm not sure I'd be able to handle it. And even if I could, I'd be stuck there for at least ten years.


Also, I'm glad for the reassurance PHoBWan, but I have to point out: Car loans are dischargable in bankruptcy. And baring that, you can always, you know, give the car back.
Neither is an option here. Like I said, I know $27,000 isn't much money to a lot of people. I wouldn't worry about it myself except that I have no decently-paying job, and only a shaky idea of how or when I'm going to get one.

One more update; posts are coming in faster than I can put this together (thanks!). In response to Likeith07: I really would like to do something like that. Unfortunately, like I said, SM isn't telling me whether it's an option or not yet, and it may not be. Are you sure your loans were Private, and not simply federal loans serviced by Sallie Mae? And if you read this and reply, what were the details of the deferment? Did you just get saddled with the interest for those months, or additional fees as well?
posted by wanderingchord at 10:03 AM on March 19, 2011


Can you qualify for a CDL and do you have a clean record? If so, school districts are having a hell of a time hiring adequate quantities of bus drivers; a lot of people don't want to get up that early or can't pass the background check. You could hire on to drive just morning routes and be done with your bus driving job before 9 a.m. In "blue" states these are often unionized jobs so may pay better than minimum wage; if you go full-time you will get benefits.

You have to stop the defeatist talk, though. You CAN work 40 hours a week and still go to school -- I teach at a community college and probably HALF of my students work full time, go to school, AND have kids. Ten years in repayment is NOT that long, you can always go back to school later. You're certainly not going to improve your situation by working 24 hours a week and collapsing under debt. There ARE jobs out there for people without college degrees.

It sounds like you've made up your mind this problem isn't solvable, which means you're unlikely to solve it. Find a second job and attack the debt first; even if you just pull it down to more manageable levels, you'll have a lot more options.
posted by Eyebrows McGee at 10:11 AM on March 19, 2011 [9 favorites]


The people I'm talking about didn't declare bankruptcy, though. That's my point--they were actively able to pay off their loans while working full time at food-service or entry-level office jobs.

. . . are you furthering your education now? Are you calling up the minimum wage jobs to which you'e applied and asking for an interview (seriously, that's the only way I've ever gotten minimum wage jobs, and I've had quite a few), rather than passively waiting for them to call back?

I'm sorry, I understand the difficulty of all of this--but a lot of mefites come from bad family situations or have struggled with depression. If you're working only twenty hours a week, though, you're only digging yourself deeper into this hole.

By the way, it's okay to take ten years to pay back a loan. Hell, a lot of people take thirty. Why is that so problematic for you? It seems like you've been bit defeatist on both of these posts--people give you a lot of solutions, and your answers are, "Here's why that won't work, and this is how my situation is terrible, and so I can't pay any of it."
posted by PhoBWanKenobi at 10:13 AM on March 19, 2011 [4 favorites]


More directly: worry about making time for furthering education later. Right now you have to work to become financially stable. This should be your priority.
posted by PhoBWanKenobi at 10:16 AM on March 19, 2011 [3 favorites]


You absolutely can put your private loans from Sallie Mae into deferment; I know someone who did it. Ask them point-blank about that - they're not going to magically offer it. Use that six months to get treatment for depression and find a full-time job.
posted by desjardins at 10:34 AM on March 19, 2011 [2 favorites]


I worked 7 days a week at 3 jobs for close to 2 years - because I had to. You have to do what you have to do to get out from under that seemingly huge student loan. And now, over ten years later, I've whittled down my student loan to almost nothing. I will say, that over the years, I did request a deferment - a number of times. I too have SM and the paperwork is online, downloadable and takes minutes to file electronically. Get a second or third job, make a dent in your loan and take a deferment in a year or so to concentrate on education - but only once you've managed to start attacking your loans.
posted by ps_im_awesome at 10:42 AM on March 19, 2011 [1 favorite]


I have very little chance of getting a decent job in the next few years. Six years of college, but no degree, and now I'm out of time and money. And even people with impressive and deeply "practical" education are struggling to find decent work right now.

I missed this part on first read. This is your depression talking and it's presenting a skewed view of reality. Yes, times are tough and the unemployment rate is high. That does not mean that you, wanderingchord, will not find a decent job. I'm working as a temp, but I'm making more than I did when I had a permanent full-time job. You can obviously type, you can write, I'll assume you learned how to use at least Word and Excel in college, so there are office jobs for which you can qualify. That's far better than working fast-food or retail. Go to a temp agency; they're less likely to care about your degree or lack thereof. Finish your degree part-time or online (but beware of scams). Just keep putting one foot in front of the other.
posted by desjardins at 11:06 AM on March 19, 2011 [3 favorites]


Response by poster: Well first, it looks like deferment is a real possibility, so that's hopeful. I'll call them up again, try to get some hard info on it.

I resent the idea that I'm "defeatist"; If I was, would I be applying for jobs, struggling through the one I have, looking into other educational possibilities, posting on here? I'm sure that there are many people that work much harder than I do, under much more awful conditions, and I admire them for it. But everyone is different. My situation is hard for me. Also, again, clinical depression. That tends to warp reality a bit. So if I seem overly pessimistic, my apologies.

Finishing my degree isn't an option. Believe me, if it was just a matter of toughing out a few boring/challenging classes I would have done it. The department for my major is a mess. The teachers and admin are border-line abusive. At some point I might try for a different one, but again, not an option short-term.

Bus driver sounds interesting, but wouldn't work for me. I have a..."Problem with details." Might be some sort of ADHD, I don't know. But I really shouldn't be doing anything where people's lives depend on me. I have trouble driving stick without frequently grinding gears: I shudder to think what I'd do in a bus.

The comment about interviews is valid. I've heard this a lot, but never really understood the proper policy there: Do you wait a few days after turning your info in and then call and say "When are you interviewing?" or that you'd like an interview, or ask if they've looked at your job app/resume yet? Whenever I did it always seemed like I was doing something odd or unexpected.

Thanks for the kind words Desjardins. Like I said above, you're probably at least partially right. But let me be clear: it's not that I don't think I'm capable of working a better job. I know I'm a fairly smart, capable, fit guy. It's that I have no idea how to get from here to there. That's what scares me. How does the whole temp agency thing work? I've just been scanning want ads, local craigslist, university job boards, that kind of thing. The "city" I live in is only about 61,000 people, so I'm not sure how many office jobs there are, but I certainly can type and do basic wordprocessing/excel. Something like that would be great if I could find it.
posted by wanderingchord at 11:21 AM on March 19, 2011


Best answer: The comment about interviews is valid. I've heard this a lot, but never really understood the proper policy there: Do you wait a few days after turning your info in and then call and say "When are you interviewing?" or that you'd like an interview, or ask if they've looked at your job app/resume yet? Whenever I did it always seemed like I was doing something odd or unexpected.

Yeah, wait a few days, maybe a week, call up, tell them that you turned in a job application and that you'd like to set up an interview. It might seem odd because few people do it, but the worst they can tell you is that they've already filled the position.

You might also look into substitute teaching at local public schools. Usually, all that's required is 60 college credits and some fingerprinting. Also, crossing guard jobs? That sort of thing. Check local newspapers.
posted by PhoBWanKenobi at 11:30 AM on March 19, 2011 [1 favorite]


Best answer: I have found a lot of luck with temp work. I've worked through AppleOne temp agency, and have always found it to be a low stress way to find relatively well-paying work, considering I don't have a college degree.

I had previous office experience, which was really important to them, but it may be possible to get your foot in the door there, get an assignment at an office, and then use that experience to get further assignments. The process was basically this: I made an appointment with AppleOne on their website, went in and took a typing test, filled out some forms, and started working with an agent at their office to fine tune my resume for specific assignments. Then they'd send me out to an interview, some of which I was hired for on the spot. Go in to work for a few months, rinse, repeat. I never made less than $12/hr full-time working for them.

The only caveat is that I'm in the vast southern California area; I can't speak to the temp job market in your small city. Check and see what temp agencies are located nearby and give it a shot; I've always found it to be a great way to find work when I really need it.
posted by malapropist at 11:34 AM on March 19, 2011 [2 favorites]


Best answer: Yes my student loans are private loans from them and was able to put them into deferment. Trust me even though your going to pay more knowing that you don't have to worry is a weight off your chest right away. I'm pretty sure when the loans go into deferment the interest rate on the loans goes up some. I will have to check my records to see. I know before they were able to put my loans into deferment they had to mail me forms to sign off and say that it was ok, so you will get all that information and sign off on it before it takes effect. When you talk to them on the phone be honest and be upfront. They will probably put you into deferment for economic reasons so they will ask if your working and all that. Good Luck I hope that everything works out for you!
posted by lilkeith07 at 1:48 PM on March 19, 2011 [1 favorite]


Best answer: How does the whole temp agency thing work?

I've gotten two permanent jobs that initially started out as temp jobs, and like I said, I'm currently working another temp job. (Who knows where it will go.)

Look around your area for agencies. Google [your town] + employment agency. The big national ones are Kelly and Manpower - see if they have offices in your city. Apply to all of them. It will be a basic online application and they'll send you some form email thanking you for your interest. Wait a couple of days and if they don't contact you, call the office and tell them you applied online and you're interested in coming in to talk to someone. They'll ask you what kind of job you're interested in. Don't say "anything." Know what kinds of jobs they normally post, and say you'd like to use your skills in [something relevant], but that you are flexible. If it's an office job, they'll probably give you a test of your skills. Microsoft Office tests are like "how do you find the sum of column A and display it in column B" or "how do you insert the page number in the footer of a document." List every piece of software you've ever breathed upon in your life. You just need to get your foot in the door. I never even saw SharePoint before I started this job, and now I'm working on a big project related to it.

Don't let it scare you. You're resourceful - you've written plenty of papers for school, right? Involving research? And you're asking questions here, right? Apply for jobs that you're not quite sure you can do, and then figure out how to do them. You'd be surprised what kinds of places need office help, too - check out small manufacturing firms and the like.
posted by desjardins at 2:00 PM on March 19, 2011 [2 favorites]


I'm pretty sure you'll be able defer as well, but even if you can't graduated payments are an option, and they would allow you to, for example, make interest-only payments for a while to give you time to get on your feet.

I sympathize with the terrifying feeling of having these loans hanging over your head, and a lot of other people are in the same boat. There are options out there and you'll figure something out. Good luck!
posted by Ginkgo at 4:38 PM on March 19, 2011 [1 favorite]


Response by poster: Thanks so much, all of you. I know I sound kind of dense with some of this, but better to admit it and start learning, right? And now it looks like I have something to work with. So, to review:

-According to multiple comments that I probably can get a deferment for this loan too, at least for a little while (though it might mean higher interest rates)

-I'll definitely start calling about interviews now after I apply.

-I know we've got Manpower and Kelly here. Desjardins comment looks especially useful, I'll keep that bit about being specific in mind. I'm no master of Word/Excel, but I know the basics, and I'm a fast learner. $12 for office work would be fantastic. Chances are it's a lot less here, since cost of living is so much lower, but even nine or ten would be quite a step up. I always had kind of a vague notion of temp agencies, didn't think I was what they were looking for. Now that I know otherwise I'll definitely dig in and see what I can find there.

Again, thanks for the info and for tolerating my grim demeanor. You've been a great help.
posted by wanderingchord at 6:30 PM on March 19, 2011


Manpower also tests typing speed when you go in, so if you're rusty, write some extra-long posts here on metafilter to practice. :)

There are two other things you can do when you're more-or-less unemployed. You can look on Craigslist for one-day gigs or other random cash like focus groups or online polls. You can also try to get a day's work via Labor Ready ("work today - get paid today"). just click on "find a branch near you," call that office, and say you'd like some temporary work. Labor Ready hires for things like events (moving tables, setting up chairs), construction labor (sweeping, shoveling gravel, unloading the truck), roadwork (being the person who holds up the "Slow" sign -- actual Labor Ready job my friend did). The key my friends said was to be there early and to come wearing work-ready clothing (boots, thicker jeans).
posted by salvia at 1:10 AM on March 20, 2011


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