Sunday, February 21, 2010

Interview With the $500K Doctor, Michelle Bisutti!

Today was my lucky day. No, I didn't get a job, don't get overly excited. I had a chance to speak to the famous, or infamous, Dr. Michelle Bisutti--from the Wall Street Journal article entitled The $500K Student Loan Burden. She was sweet as apple pie, and was very excited to reach out and talk to my readers, who have also suffered from the student loan scam. I spoke to her on the phone and I tried my best to quote her verbatim. Excuse me, Michelle, if I didn't get it quite right. But the message certainly there. Michelle is not a sob story. She's allowing herself to be the poster child for a revolution. I hope she didn't tell her story in vain. Enjoy...

1. Are you surprised at how popular the story from the WSJ has become?
Yes. I knew it would grab people’s attention because of the number, but I’m surprised at how many people picked it up. Rush Limbaugh, Ron Paul and Michael Moore picked it up. Radio commentary and on-line as well. Rush Limbaugh blamed the govt. for the high fees that I was charged. At the time, I thought that he didn’t know what he was talking about, but I’ve learned some things [which I will get into later]. On Michael Moore’s website, one of the most popular articles is one featuring my story. They are on opposite ends of the spectrum, but they both used the article to make their points. It was very strange. Those are the just the ones that I got to. It was nauseating at first to see how popular the article was; I’m a private person and to see my name all over was very embarrassing. But people need to know what’s going on. What’s happening to students is criminal. In regards to the government’s involvement, I thought that Sallie Mae owns Financial Management Systems (FMS), my lender, but FMS is basically a government agency. 80% of its revenues come from the government. It contracts with the Dept. of Education and Dept. of Treasury. It’s basically a government agency. So, it’s the U.S. govt. that charged me that $53K penalty for default. FMS collects on student loans, Medicaid, and Medicare for the government.
2. Why did you decide to give your story to the WSJ? Two reasons. First, I wanted people to know about these crazy fees that you are charged if you default on your student loans. It’s outrageous and criminal and legalized loan sharking. Second, I want parents and their kids to know what they’re getting into when they get a loan. What does it mean for interest to accrue, what does it mean to defer, what happens if I default? These are the tough questions that kids need to ask if they decide to sign on for a student loan.
3. If you could do it again, would you? What would you do instead? I don’t know. There are not too many things that I love to do and medicine is one of them. I used to be a personal trainer. Both professions go hand in hand, really.
4. Why did you decide to leave being a Personal Trainer? That was a side job. I did it while I was going to school. I didn’t think it would be satisfying. I wanted to go to law school, but I found out that Columbus has the most attorneys anywhere per capita. So I decided that isn’t a good idea. At the time, I foresaw taking out 70K in loans, and not finding a job as an attorney. So I went back and did pre-med requirements in two years after college and went to medical school.
5. What is your current monthly payment? My loan is partially in collection. $550-600 and the other one, $990, with only $100 going to the principal. They are trying to charge me another $32K penalty fee, so that the loan can be sold to another student loan company. They are asking that I sign on and agree to that penalty. I am meeting with attorneys and trying to figure out what I can do to avoid this. I’m trying to enter the Income Based Repayment program but I’m not sure what portions of the loan will qualify and what won’t. It’s been 2 months since I applied. I know I’ll be paying this back the rest of my life.
6. What caused you to fall behind? I did my residency and Wells Fargo loans came due 2 years into my residency, so I started paying on those loans. I deferred the others while I did my residency and then I did a fellowship in sports medicine. While I was in my fellowship, I defaulted. I was not making enough to survive, so I couldn’t pay it.
7. Did you live extravagantly while in Medical School? Do you live extravagantly now?? Far from it. I drove a used Honda and lived in an apartment. I haven’t been on a vacation in five years. I still own a used Honda accord. I live in a house my boyfriend owns. Like I said, I haven’t been on vacation in 5 years.
8. What is your plan for tackling your student debt? I have applied for IBR and that’s all I can do. You can’t get out of student loans. I can’t not pay them. They garnish wages. I’m getting 100s of emails about stories much worse than mine. At least I don’t have children and I have a job. I’ll be okay and I’ll be able to pay these, but the fees are absolutely criminal. A lot of these people are not going to be okay. It’s horrible what they are doing to people that tried to get an education, better themselves and live the American dream and now they are indentured servants for the rest of their lives.
9. If called to testify before congress about your student loan experience, would you? Yes, I have become the poster child for the student loan crisis. Without a doubt.
10. Do you have any feelings on the student loan scam? Do you think that the system should change? I think there is a scam, evident by some of the actions of the Bush Administration when they created the 2008 budget. I won’t get into that, but there was something seedy in the way that Sallie Mae was dealt with. But this take over by the U.S. Government of student loans is a good thing, to take out the middleman. But it’s the government is the one that charged me these unreasonable fees. So, I don’t know what to say about that. But I know that the middleman is making billions of dollars off of us, which is criminal.
11. Any advice to students? I advocate higher education, but doing it smart. Take out as little as you can, if you can live at home and stand your parents, take out low interest loans, and be aware of what would happen if you get out and can't find jobs in your chosen field. Especially now, when so many people can’t find a job in their field. Know what kind of money you will be looking at repaying. You cannot get out of student loans. You have to pay them. People say the two things you can be sure of are death and taxes, but add to that—paying off student loans. They need to know what can happen. Get a major that you can get a job with, like being an engineer. But don’t go to school, just to go. Like getting an art history degree. That won’t work and you’ll probably be waiting tables. I don’t want to keep people from going to college, just know what you’re getting into. I have given some thought to whether we’re better as the uneducated masses or the educated masses. I think it’s better that we’re educated. Because if we’re educated, we can fight this.


  1. Great interview, Angel! Thank you for being a part of our blog and sharing your story with us, Michelle.

  2. I don't know. Live like a student while in med/law school or you'll live like a student the rest of your life. I'm sure she shopped too much or something. $500K is unreal.

  3. Such a story is believable. I work at a hospital and one of the nurses i know paid for his daughter's med school education and said it would have well grown into the 500 k area, assuming the student relies on loans for living expenses and school expenses and during the time she does her residency training.

    Doctors' wages are also low now, i was shocked ot hear that the nurse's daughter was only being paid mid 50k range after she has already received her md degree and is interning to become a surgeon. The field of primary dr. isn't where the money is now and most doctors need to get into specialties and become a surgeon to make more lucrative salaries.

    That being said, I recently heard from a friend that another friend of her's graduated from USF law school and hasn't found a job since, almost a year has gone by.

    Its sad how the job market has become for us younger generation folks.

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  6. I think we need to remove all anonymous comments that add no value to the discussion, such as the mental midget at 5:25 AM.

    I like the idea of the interview format, Angel. Question 1 illustrated that all political affiliations have something to fight here. Prelaws should also pay close attention to Question 4.

  7. I guess 10:36 did not read the WSJ article. The original amount was $250K - a typical amount for a medical school education and living expenses. It went to $555K with penalties, fees, and fines - many assessed by the government. I guess the tool at 10:36 also did not read where this woman, Dr. Bisutti, lives in a home owned by her boyfriend and has not been on a vacation in 5 years.

    Thank you for doing this interview, Angel. And thank you, Dr. Bisutti, for your role in exposing the higher education industrial complex. Many of your detractors went to school when it was MUCH cheaper, or their parents paid for it. Most of them are out of touch with reality. You - and legions of others - did as we were told from the time we were able to walk: "Go to school, and make something of yourself."

    We followed this advice, and instead became debt slaves and the banksters made more BILLIO$ off of us. So much for the American Dream.

  8. Great score on the interview, Angel! Very interesting...

  9. People seem to to think that education is an entitlement. It is not. If you cannot afford to go to school then perhaps you should not go. Yes, there are predatory practices in the student lending industry but no lender ever forced someone to borrow such an obscene amount of money to go to school.
    Once upon a time, people saved and put money aside for higher education. Then again, people once made down payments when they bought houses and all but the most credit worthy were denied credit cards. This has been replaced by a mindset that apporves of excess borrowing and cries of "it's not fair" when it cannot be paid back.
    Simply put, those who cannot afford higher education should consider other options. There is no shame in that. There is significant shame in being overly burdoned with debt.

  10. I agree with you, grump. I think that we should be able to save for our education and just go to school on our own dimes. The problem is.. with all of the "free" money flying around, college tuition has increased by 60% since 2000. I just saw that figure on CNN. Once the "free" money is gone, the tuition costs have to slide back to an affordable range. I went to college in the 90s and the education was so affordable at my state school. $5K a year. I paid for it myself. At my alma mater, it's now $11K. That's ridiculous.

  11. Angel: 5K a year at a state school in the 90's. I can beat that. I graduated from a well regarded state school in the mid 90's. Cost? about $1700 in tuition per year. No kidding.

    It really would be best if the loans weren't guaranteed. That would make lenders analyze whether there are sufficient opportunities for the borrowers to find a job to pay back the loan.

    That would mean that basically anyone who wanted to go to a school outside of the top 30 would be on his or her own to pay for it. Schools would either have to close or drive tuition down to a point to where the opportunities flowing from that education made sense on an ROI basis.

    Overall, however, I'm a firm believer that society must be stratified. We used to be able to identify the serfs and the peasants because they were share croppers in agricultural communities or sweat shop labor in industrial ones. It shouldn't come as any surprise that a distinct variety of serfdom arises in a service based society.

  12. I have to kindly disagree with Grumpy Young Man. I personally believe that everyone should be entitled to an education if they want it. This goes back to my posts on the elites and access to the best universities. If someone has the intelligence and the ability to become a top rate surgeon, by all means, our nation should give them the means and financial assistance to attend medical school. Top colleges and graduate schools should not be limited to the rich. If education isn't an entitlement, then most children shouldn't even bother going to school because they'll never be able to afford a college education. Most families today can't afford tuition at the top schools. Even students from middle and upper middle class homes must depend on financial aid, loans, and work study programs, to stay in school.

    I also believe this is the reason why the US lags behind many European and Asian countries when it comes to education, especially in math and science. While other countries pay talented students to study overseas and get the best education to become tomorrow's leaders in science in technology, our nation leaves our children to become burdened with hundreds of thousands in student loans if their families can't afford outrageously high tuition.

  13. Maybe I'm falsely extrapolating from Grumpy's comment... but I think this is how it would play out.

    Loans cease.
    No one goes to college.
    We have a lost generation of students.
    Colleges close.
    Smarter colleges remain open and figure out a way to become affordable.

    I have a vision of professors and politicians that we have strayed from. I'm thinking, they should be eating tuna from cans and passionate about what they do. That should be enough. Professors and Deans should make a low base salary and earn more through publications and speaking engagements... not off the backs of over burdened students.

    In other words, for students to get an education the right way, I don't think the government needs to subsidize it through loans and I don't think private lenders should be involved. I think college and grad school should be affordable. That is the basis of the model in Europe. It's not that a public university in Belgium (where my cousin pays $1000 a year for law school/college) is $25K a year and the government makes the difference. It's that the education really only costs $1000 a year The professors make less. The Deans make less. Universities and colleges operate as non-profits and I am so upset that they make profits hand over fist.
    So, we're saying the same thing. But you have a different idea about how that is supposed to happen, I guess.

  14. I absolutely agree with you Angel that we should follow the European model. Deans and university presidents in the US are way overpaid. Not so much college professors and graduate assistants but university presidents and other administrative officials are paid as much as $500k/year. Law professors too are overpaid for the small amount of hours they actually spend teaching.

    I don't agree we should achieve this model by punishing an entire generation of students. There has to be another way. The goverment should step in to start reforming the system by putting Sallie Mae and Access Group out of business. That will never happen, of course, but it's a nice idea. Part of the problem is that our government puts a greater importance on our military industrial complex rather than pouring billions into reforming the education system from primary to higher education. All of it needs to be reformed and regulated.

  15. Hardknocks,

    I thank you for the civil tone of your disagreement. Frequently people just dismiss me as a "troll". That said,you raise a question of regarding fairness and here is my response:

    Is it fair to indulge the self delusion of those who are mistaken in thinking that they will be the next Clarence Darrow if they borrow enough to attend law school? If they truly possessed such aptitude, they would be eligible for the surprising number of full scholarships available as part of the mega-endowments of top schools. If one struggles with the gate keeping elements of academics such as entrance exams, one should seriously consider the ramifcations of overextending. What's not fair is that there are plenty of lenders and schools ready to indulge such a person if they let themselves get taken.

    If someone truly believes they are exceptional despite a lousy LSAT score or poor grades, they should invest in their fututre and not gamble on it and defer instant gratification. Nobody likes being told that you can't have what you want when you want it. If you truly believe that it is for you, you will find a way. If this was the only option, there would be many fewer people suffering from having not realistically assessed themselves.

    Life is not fair. It is true that some people have a leg up in this race. However, it is equally unfair to to oneself to be blind to reality until it lands you in a dire situation.
    It all comes back to making responsible choices and not buying that which you cannot afford. If you really want it, make the necessary sacrafices of time and treasure and save for it.

  16. To some extent, what you're saying is hard to stomach for many people--but it's true. I like to frame it a different way... by saying that "book smarts" and careers that are considered prestigious are not the only way to be successful. My mother is in the beauty industry and she is brilliant and well-off. She could not have gone to college--even if she was given the chance. But it's not a loss, she's excelled in her career.

    Much of what's wrong with this country is that we are all overburdened and can't take low paying jobs. I'll put myself out there and say that I probably would have enjoyed working with children, but can't because I can't afford to with the loans and all. We don't have a large number of uneducated workers for industry to thrive here. We can't all be in management. So China and India have inched ahead.

    This reminds me of a kid that I used to see at the local drug store. He was a clerk and he was... a little slow. I'm a bitch, whatever. He was. I could tell he wasn't all there. But he was enrolled in community college (with loans) and was hoping to go on to a 4 year university and grad school in anthropology. The system won't weed him out. He will go on in school and get all the degrees that he ever dreamed of. That would be wonderful if it weren't with loans. Do I think he will be employed in Anthropology one day? Absolutely not! He won't make it in the field. He isn't smart enough to do that.

    Call me what you want, but I tried in a million ways to tell him that he should use loans to go to school and that he try and focus on becoming a manager at the drug store. He will earn more money that way and it's not beyond him. But, he doesn't listen. And the last I heard, he had Ds in more than one course.

    To me, education is not for everyone. Plenty of uneducated people are more successful than me and some of them are very enlightened and worldly as well... with expendable income to travel and have hobbies, why would they be?

  17. how dare you guys try to discourage people from pursuing higher ed?

  18. I posted this over at Nando's blog awhile back, but received no response - let me know what you guys think:

    "Just to show everyone how easy it was for our parents compared to our current plight, and just some food for thought in general:

    The federal minimum wage from 1980-1981 was $3.10 and from 1981-1990 it was $3.35. If we assume that an average person could get a job paying minimum wage during the school years of 1980-81 to 1982-83 during a three year stint at the University of Michigan Law School, and assuming that person worked 20 hours per week during the 52 weeks of the three years in law school (certainly quite an easy task if you ask me), that person would have made $10,192.00 over the three year period.

    Now, how much would tuition have been for those three school years? A grand total of $7,266.80!

    In other words, you could work minimum wage jobs during your law school stay and actually come out ahead $2,925.20 when only taking into account tuition versus total minimum wage earnings! The extra money left over represents about $81.25 left over each month.

    I realize you would have to take into account food, lodging, transportation, etc. However, average rent was $300.00 (which if you had roomates would be significantly cheaper - say ~$75.00), and everything else was much cheaper. Basically, you really could work minimum wage jobs back then and pretty much cover ALL of your costs for three years of law school. I really don't even know why people took out loans back then (if they did at all).

    Now, comparing the numbers today:

    Tuition - $129,030.00 for three years of tuition (assuming they don't raise tuition for the next three years...good luck with that).

    Michigan minimum wage - $7.40. Working 20 hour weeks for the three years you would make $23,088.00.

    Running the numbers, you would be left with a deficit of $105,942.00! And that's not even mentioned housing costs, food, transportation, etc."

    With those numbers in mind, I then posed the following question:

    "Maybe someone here can clarify this for me, but why did people really even need loans when all this federal student loan legislation was passed? Are you telling me that people really couldn't come up with the money to pay for their tuition back then? I really find that hard to believe. As I pointed out earlier, even as recent as 1985 (and a few years later even) you could completely finance a top notch law school education. Why were the loans needed?"

    So does anyone have any thoughts? I really want to know why anyone from that day and age even needed loans to finish school. I realize that I only took numbers from the University of Michigan, but I have checked numbers from other schools and have found them to be quite comparable, and in many instances you could fund an education for much less than the numbers cited above. I'd especially be interested in hearing thoughts from those that graduated college from that time period.

  19. Wow. That's some good research there. This accounts for why our generation will do worse than the generations prior. They could either pay for their education in full or have very little in loans and get a college education.

    We must ask ourselves, why has minimum wage increased by $3 and tuition has tuition has increased exponentially?

    Well, the answer is obvious. It's the same reason why real estate went up so high that the bubble had to explode. It was the irresponsibility of lenders in giving loans to everyone who had a pulse because, ultimately, they don't bear the risk of the loan. In the case of student loans--the loans will get paid because you can never discharge them in bankruptcy. In the case of mortgages, the banks would write the loans and sell them--therefore taking the bad debt off of their books. Capitalism is a 2 wheeled cart in this country. We're not doing it right. Everyone must bear the risks of their decisions and prices of housing, education, etc. will level off and drop.

  20. Thank you, anon at 1:24. I'd like to elaborate and respond to your comments when I have the time. You are absolutely correct. In many ways our society was more equal three decades ago than it is today. We've made progress in dealing with racism and sexism but have gone backwards in terms of dealing with economic inequality. I'd really like to make your comment a post if you don't mind.

  21. Late to the post as usual, but from reading the Yahoo link, it looks like some of the collectors violated the Fair Debt Collection Practices Act. Probably past S/L but worth looking into. Also check for state law versions. Great blog as usual

  22. Grumpy Young Man, I have to disagree w/the idea of "higher education is only for the rich." Here's why:

    1. Smart people-poor parents: just looking at my life experience, I'd be out committing crimes at this moment if I weren't doing what I do right now. Grew up in a region I hated w/an alcoholic parent & was even in Special Ed kindergarten before being given the chance to prove myself.

    Most of the people I know who still live there have multiple kids & are going to community college in their late 20s. Some are lucky to have fathers in the kids' lives but there are plenty of single parents.

    Did I mention that many of these people are collecting government aid or using Medicaid to have babies? So if you think that kids should suffer for the sins of their parents, what chance does any kid not born to privilege have at doing anything? If I have the talent for higher education, isn't that talent better served actually doing something GOOD for society instead of doing something BAD? Let's consider more smart people doing this: pretty soon, you're going to see more sophisticated crime, more welfare recipients & higher suicide rates.

    2. Diversity of life experience: there are insights I have from my background that a person w/money simply doesn't have. The same holds true for those from money. Even if some rich person is the nicest, most empathetic person in the world, I don't think that person can be nearly as effective a public interest lawyer as someone who has lived those situations & understands that world. Psychological studies even back me up on this.

    If you fill public interest organizations w/lawyers from money, those organizations are going to be crippled in carrying out their mission & far less effective since they lack credibility among the people they want to help.

    My story is unique in some ways but my point is that if you deny the means for someone w/potential, society as a whole is going to suffer for it. How many people might not have done things if they didn't have benefactors, mentors, etc. to help them? Greatness has come from ALL socioeconomic backgrounds, not just from the rich.

    However, I'm also a realist & a believer in the universe working for those who help themselves be better.

  23. The new "American capitalism" is Privatized profit; Socialized Losses!

    Friedman would be rolling in his grave



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