Wednesday, December 8, 2010

Hump Day Horror Stories: Don't Go!

I had a good week.  Remember, I'm a hustler.  So I have used my law license to get a broker's license and I have had a couple of listings.  Haven't been able to sell one yet, but I was showing a condo to an older lady and she said something that made me smile.  One of my clients was calling me non-stop (a divorce client and YES they do that) and I had to take the call in front of her.  She said, "Oh, you're a lawyer too?"  "Yep.  I am," says I.  She said, "Oh, Lawyers aren't doing too well anymore.  My niece regrets going, she's earning nearly nothing."  The message is spreading.  It's taking time, but it's happening.

Many people come to BIDER by googling "what happens when I default on student loans."  I know we talk about it in roundabout ways, but i thought I should look for more illustrations of it.  So, I went over to to look for stories about lawyers who are behind on their loans.  Here is a sampling of what happens when you anger Aunt Sallie:
I finished law school in Pennsylvania in 1998.
I never received a summer internship/clerkship and due to family problems back home I only worked part time in the summers for solo-practitioners.
When I graduated, I moved to California but never got any job offers.
So I moved back to Virginia and "temp'ed" at big lawfirms in D.C.
I got paid $10-15/hr to move boxes and file papers in a suit.
It was mind numbing and had NO potential to grow into a good job.
I had passed the VA bar exam too, but without a summer clerkship, nobody would hire me.
I left to work in the booming Internet field in 2000, but my company was bought by WorldCom which ended up going bankrupt and I was laid off in 2002.
I paid my loans up until that point, but after being harassed while unemployed and having them capitalize my interest every time I took a deferment, I gave up.
I took out $80k in Federal loans and needed an additional $20k in private loans to cover living expenses for the 3 years while in school.
Now my loans are in default, I still don't have a job or a career path.
While I was in major job hunt mode, I was rejected for being too nice, requesting too much salary, and even at Starbucks I was rejected since I came from the Corporate world instead of the restaurant industry!
During all of this, I developed severe clinical depression and contemplated suicide since my life appeared to have all but stopped.
I have started my own business and I am doing OK, but now I am being sued for some of my loans.
I don't have any savings and the only thing I own is a car which might be taken to satisfy part of the judgment for my outstanding loans.
Bankruptcy was meant to give people in dire need a fresh start, and that is exactly what I need.  If nobody will hire me in my profession that I went to school for, and my backup profession didn't pan out, I could use some assistance, not a demand for the FULL amount!
I have no idea what the future holds for me and I feel embarrassed for my family and friends that I am in this situation.  I was just trying to better myself and instead I am FAR worse off than if I had not even gone to college!  A simple life is all I want.  But the ridiculous size of my loan payments compared to my earnings make just eating a struggle.  If it were not for friends and family I would not be here today, but I am tired of being a burden.  And sometimes the only way I can stop thinking I am being a burden is to .....
Thanks US Government and Sallie Mae for turning a creative, intelligent, funny, & athletic human being into a suicidal piece of societal detritus. At least they will have to write off my loans when I am gone.

I went to law school specifically to study environmental law so that I might work in the public interest to save our resources for future generations.  I attended Vermont Law School, where I was only able to attend because of the availability of student loans.  When I graduated, my debt was nearly $100,000.  When I first graduated, I took an entry-level position at a small non-profit, and I was immediately forced to consolidate my loans because I could not have afforded the payment otherwise.  When I consolidated, in 1996, interest rates were high, so I became locked in at 8%, which the loan company told me was a good deal, as interest rates could be as high as 12-15% or more if I accepted the "floating" interest rate.  Since I needed some stability and predictability in my monthly loan payment, I locked in at 8%.  Now that interest rates are lower, I've tried everything to find a way to lower the interest rate.  And for ten years, I've been paying a huge student loan payment, and I still have another $60,000 to pay off! 
I've stuck to my guns on doing public interest environmental work, so I have continued working for state government or non-profit organizations, and I currently make less than half of what starting associates make at law firms.  But, as a result, I have no savings, next to nothing in my retirement account, and I've not been able to purchase a home.  With the real estate market spiraling out of control, my chances of being able to afford a home now are next to nil.  I am absolutely outraged that this country allows people who simply want to better themselves, and in some cases, help to better the world, and instead of helping these people to make a contribution, we are penalized and financially crippled for a lifetime.  It is absolutely criminal in my mind.  What can I do to help bring this issue to light?  I just saw your editorial in the Baltimore Sun, and I was so relieved to FINALLY see that there is an organized movement on this issue.  -Meredith Lathbury, Vermont Law School, Class of 1996, non-profit environmental attorney.

I was admitted to one of the top 14 law schools in the country. And while I did well there I was forced to take out $150,000 in student loans. I know that is a lot of money but I figured this is prestigious, I can get a job making six figures. 2 years after graduation I was still unemployed (I had above average grades but I for some reason no one wanted to hire me). While collection notices came in I just ignored them, figuring the government would have some program for those of us who couldn't afford these extortionate rates. I filed for bankruptcy (which got rid of my 50,000 of credit card debt) which did nothing to stop the loan officers from the DoE. As it stands now I owe 412,329.57 (they expect monthly payments of nearly 4,000) and I am still unable to find a job. I am screwed, I think I will probably kill myself.

I graduated from law school in December of 97. I have paid on my student loans off and on over the past 9+ years and have paid back an estimated $75,000 on a loan that when I graduated was a little of $100,000. When I last checked the pay off amount it was over $135,000 and that's with paying $75,000 + over the past 9 years. I owe more on it now than when I took them out !! One of my loans is in default, they claim I owe them $23,000+ (which somehow jumped from $17,000 in a span of about 30 days) My two other lenders are close to defaulting and I am unsure if I should just let them default. I mean whats the point of paying on these things if you own more on them after 10 years then when you started. Who cares if I owe this money after I die of old age. I am self employed and all of my clients either pay in cash or write a check so the chances of them getting money from a garnishment is low. If after several years of not paying these blood suckers anything wont they eventually roll over and offer you some type of settlement ? I spoke to a friend from law school about 2 years ago and he had defaulted on his loans and he claims they offered him a buy out settlement. He did not own a house at the time, had no real bank account, or car or anything of any real value, he was self employed and worked out of his Dad's office which was in his Dad's name. Is this tactic workable ? Simply give them nothing for several years if needed and wait till they know they are not going to be able to collect then ask for a settlement amount ?
I don't advocate suicide, but interesting that dying
is the only way to relieve you of student loan debt.
Don't you think?


  1. On September 15, the House Judiciary's Subcommittee on Commercial and Administrative Law passed H.R. 5043, the Private Loan Bankruptcy Fairness Act of 2010. This is an important step forward for students and consumers, and we are hopeful that the bill will continue to move forward.

    On September 15, the House Judiciary's Subcommittee on Commercial and Administrative Law passed H.R. 5043, the Private Loan Bankruptcy Fairness Act of 2010. This is an important step forward for students and consumers, and we are hopeful that the bill will continue to move forward.

    Please urge your representatives in Congress to support these bills to provide fair treatment of borrowers with private student loans.

    CLick on the following link to fax petition-Fax one every day from now until the current sessin ends

  2. Remove the noose. It's just not appropriate, it's callous and crude.

  3. No, the noose is appropriate.

    "The other exception concerns individuals who are vulnerable to suicide, a small but significant percentage of the population, who need a feeling of usefulness to others, validation by them and freedom from feeling burdensome, to such an extent that without utilization they feel no entitlement to life itself. "

  4. Keep the noose. People do commit suicide, you know. That happens. Some of them even use a noose. That's reality. I'm not making light of it. That issue is much too close to me to do that. I suppose you think it should be removed, though, because otherwise you cannot continue to indulge your delusion that you live in a world in which it doesn't happen? Well, my friend, some people see that - one way or another - every day. You can't tolerate a photo on the internet . . . .

  5. I graduated from a top 20 law school in 98. I made dean's list first semester but this was not enough. I did not get a placement from OCI. I had career services at my law school look at my resume, and they said it looks fine. Later, I sent out 200 resumes and got nothing. I was horrified. A terrible depression and anxiety overwhelmed me.

    I tried networking but that did not go anywhere. I got so desperate I started cold calling lawyers in the Yellow Pages, it seemed like no one wanted law graduates. I debated dropping out of law school, but I finished it out.

    Later, I started getting hounded by the student loan people. They were harassing me and my family non-stop. I feel depressed and humbled by my experience. I look at how tuition has more than doubled since I graduated, and take small solace that I did not incur almost triple my debt at today's tuition. Maybe at this rate tuition keeps going up my degree will be worth something.

  6. Suicide is not the answer. But I can see how people would feel helpless. You cannot get out of these loans - and the job market is fundamentally restructuring. For $ome rea$on, policymakers, i.e. handpuppets of the banking cartel, feel that it is a good idea to consign an entire generation to a lifetime of debt servitude.

  7. For the people contemplating suicide, why not just consider leaving the country? I would think they would value living debt-free, albeit in a foreign land, over killing themselves.

  8. I do not understand the lack of creativity. I think it's because lawyers, for the most part, always did things the "right way." Get good grades. Go to a good school. Pay your bills. Respect the man. Fork that. Really, this is important...fork that. Every person, from the highest to the lowest will stick it in your ass if you bend over. You have to be prepared for this. Now it's time to stick it to them. Have fun with it. There is a freedom in being totally fucked. There really is. Embrace the freedom or let it kill you. If you do the latter, they win. Now what fun is that?

  9. @Anon. 6:25

    Yes. I said that same thing about this time last year, and now I'm out of the country - on IBR and 3 months behind on the private loans. Job to start next year, sometime. I'm going to try to hold it together until then, but if it's a foreign bankruptcy, a complete avoidance of the obligation to pay or just paying as much as I can (now that I'm in a country that's friendlier to normal, average people with normal incomes and work possibilities), then that's the plan.

    YOU HAVE TO LEAVE THE U.S. The rest of the world is not suffering like you are. It shouldn't be this hard to live your life.

  10. Please take down the noose.

    We have a 9.8% unemployment rate in this Country, and people are living hand to mouth. Law Grads are particularly screwed because they are starting from less than zero. They can't "start over," and are trapped, but there is hope. If that Bankruptcy Bill passes expect to see Student loans tighten up, which will lower the ability of schools to raise tution. No loans + no cash = deflating tuition. That means some of those Diploma mills will collapse. Can you imagine the day that one of them decalres bankruptcy?

  11. I love the "just go overseas" people.

    Do you think they just hand out work visas when your plane lands in London or Perth or wherever?

    Believe it or not, countries not named the USA actually enforce their immigration laws.

  12. What I can't figure out is why 0Ls didn't do their due diligence. I contemplated attending law school. Before I did, I did some research. I talked to my attorney, a former attorney, my brother (who's a VP at a Fortune 500 company), and read about the legal profession.

    One of the best things I ever did was purchase a copy of Robert H. Miller's Law School Confidential. It was the best $15-$20 I ever spent in my life! Thanks to that book, I realized that law school wasn't a good bet, so I didn't do it.

    Guess what? I found out that there are too many lawyers; that getting a job was extremely difficult even BEFORE the economy tanked; ergo, going to law school as a bad idea. Why didn't others do likewise? Couldn't these other 0Ls have done something similar?

  13. This comment is for Meredith. I am the Director of Financial Aid at Vermont Law School. I am writing to encourage you to look into the new Income Based Repayment program that was created by the Department of Education in July, 2009. Under this program, your monthly loan payments are based on your adjusted gross income,so you payments might be more manageable. In addition, they also created a new Public Interest Loan Forgiveness program whereby, if you work in a public interest job, which you are, for 10 years and make 120 on time loan payments under the Income Based Repayment program, the federal government will forgive the remainder of your debt after those 10 years. My understanding is that the eligible employment can have a start date of 2007. You should contact the Department of Education Consolidation Services at 800-557-7392 to see if you qualify for either of these programs.

    Hope this helps.

  14. Meredith isn't on this site, mill schill. However its good to know the debt mills are watching their detractors.

    Besides she already consolidated long ago, and unless it was with direct loans, she is pretty much fucked.

    Between this, breaking up with my girlfriend, and carl crawford signing with the hated red sox, today pretty much is shit.

  15. I'm a 45 yr old non-grad who has worked in the nonprofit world since high school. I just recently realized that my dream of getting a degree might not be a very practical one, which is really sad. I now work in the development office of a law school and am horrified to see the amount of debt graduates are leaving with. We do offer some loan repayment assistance - it's something that we fundraise for. I sent this blog around our office in the hopes of using it as a motivator for our fundraisers.
    If you haven't already, check with your alma mater to see if they can help.
    There are also some federal assistance programs for people working in the nonprofit sector. Contact your school to find out more about it. Also, you can ask your school's alumni relations office for lists of alumni in your area and network. Attend regional events when you can. Keep trying. (and keep your eye on the jobs pages of colleges/universities nearby. The passion you show here can translate well into the nonprofit world.) We should all keep talking about this problem. Giving up won't fix it. Remember that there are lawyers out there who have found their dream jobs and it hasn't always happened quickly. Just don't give up.

  16. David's comment, while addressed to Meredith, might actually be helpful to others.

  17. To David: it's great that you're using those two programs to somehow justify the high cost of law school, but did it occur to you that people can't even get a low-paid legal job these days, let alone a job in public service? Many of us would love to take advantage of those programs, but when earning no money, nor having any chance of getting a real legal job or a public interest job, we're kinda screwed. (Yes, I am also aware that public interest encompasses far more than legal jobs, and includes teaching, law enforcement etc., but a law degree doesn't actually qualify us for any of those jobs. I've tried...)

  18. While I do agree that this is a big issue and there are a lot of people who can't repay their loans. I do have to say some of these people are idiots. I mean, I honestly don't understand how people think they're going to go into the non-profit world and still be able to afford to pay off over $100,000 in loans. I'm sorry you weren't smart enough to use common sense.



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