Very long article, but one of the better first-hand-accounts I’ve read. This guy covers ALL the bases.
I support this guy 100%. I’d like nothing more than everyone defaulting on student loan debt. And that includes Ms Freud, who still has $30k left to pay. (But it would be a cold day in hell .. as she is very responsible.)
First, it would cleary help crash the system. Burn this mutherfucka down … the sooner the better … there is no other solution.
Second, because the guy wrote this; —- “If the numbers seem fuzzy it’s because my student loans, private and federal, have been sold and resold and serviced and managed and payments lost and interest rates changed so many times that it’s become impossible for me to track.” ——– What a scam … been there, done that!!
I got divorced. Part of the settlement was that I got stuck with the Office Max credit card, about $1,500. I had a huge amount of bills, way more than the monthly income, so I had to decide whether to pay “Peter or Paul”. I let the Office Max bill slide, although I had every intention of paying it off. Well Office Max sold off the debt. I get a call (and letter) from the new owner of the debt …. it’s now about $1,900. (Even though they probably purchased the debt for $700, or less.). They were willing to drop maybe $100 bucks, but no more. I told them they can go fuck themselves Fast foward …….. the debt was sold many more times, accumulating more and more penalties, fines, charges, and other bullshit …. eventually reaching around $8,000. They never got a dime from me. Somebody won. Somebody lost …. and it wasn’t me.
“Hello, My Name is Stevie and I’m a Student Loan Deadbeat”
By Stevie Diogenes
I am a Student Loan Deadbeat. This is a story of how I accumulated nearly $200,000 of student loan debt, escaped the illusion of debtor’s prison, and manage to get by in spite of crushing debt. I hope this serves as a guide for others who are struggling with overwhelming student loan debt, and helps them see that there is life after default.
I expect to be mocked and ridiculed by libertarians, those sanctimonious Randian cheerleaders who pepper their rants with the phrase personal responsibility while bragging about working 20 hours a day at 5 different jobs to pay their student loan debt and validate a rigged system.
And I expect to get death threats from tea party plebians who will grunt, in a nonsensical manner, something about me being a taker and mumble the afterthought, “if ya couldn’t afford schoolin’, maybe ya shoudda got yerself a job, ya damn libbrul.”
I know I’ll hear from right wing conservatives who believe that I got myself into this mess and, because other people in my situation paid their extortionists for freedom, I must do so as well, or starve and sleep on the street as punishment.
And I’ll get the certain condemnation from Christians who will judge me for not obeying my masters; those brilliant Cruzian elitists who think Jesus preached capitalism and died for the sins of the wealthy.
But I write my story anyway, in spite of the risk of ridicule and death threats and judgment. I write my story because today, in America, lives are being ruined by a rigged student loan system. Hundreds of thousands of U.S. citizens just like me are struggling with student loan debt they cannot pay. Hundreds of thousands of U.S. citizens just like me are in default. This is America’s shameful little secret, and it must be exposed.
They tell me my total student loan debt is approximately $185,000 and increasing everyday, with about $90,000 in default. I’ve carried some of this debt since 1986; I know I’ve paid approximately $40,000 over the years, and they tell me I owe more today than the total of all the original loans combined, thanks to interest, penalties, other usurious fees.
If the numbers seem fuzzy it’s because my student loans, private and federal, have been sold and resold and serviced and managed and payments lost and interest rates changed so many times that it’s become impossible for me to track. I’m not sure what I owe, to whom I owe it, what I’ve paid or the interest I’m being charged. About that student loan interest rate fight in Congress? I couldn’t have cared less. Frankly, my student loan debt could be a $1 million now and it wouldn’t make a bit of difference.
I’m married to this student loan debt. For better or for worse, richer or poorer, she has stayed with me through a divorce, a bankruptcy, and years of unemployment. As I grow older and less able to pay with each passing year, she becomes more demanding, a cranky old woman losing her hearing, continuously nagging me in increasing volume, unable or unwilling to hear my responses. She annoys me daily and will be at my side when I die. But the annoyance is trifling compared to my glee over the fact that she, too, will die, right along with me.
Like so many other naive souls — poor, wretched trophies of human traffickers — I was lured into my trap with a promise of a better life. But, unlike the others, led to their traps by shadowy, sneaky pimps, I was coerced by flashy hustlers who deceived me with legitimized aplomb. Those oh-so-righteous bankers who rode into my life on sedan chairs, supported on the shoulders of the U.S. government and shaded beneath a banner sporting all the colors of law.
The trap was skillfully planned and executed, born of a brilliant collusion among government, bank and financial industry scoundrels. Through contracts, social and legal, they bargained for their benefit (obscene profit for themselves) while guaranteeing me a lifetime of servitude and unmanageable student loan debt.
“Those loans paid for your education. It’s your responsibility to pay them back.”
My response: I earned my education through hard work and perseverance. If only I could have purchased it, I would have saved myself years of hard work, hours of sleepless nights reading and studying, stress-filled days worrying about making the grades and passing the classes, and thankless jobs, struggling to impress temporary bosses in unpaid internships so maybe, just maybe they would hire me upon graduation.
Student loans DID NOT pay for my education – I earned my education. But because I was born to the 99%, the gate to the opportunity to earn an education was locked to me. Student loans allowed me to rent the key to open the gate; student loans allowed me to join the lucky children of of 1%, those born within the gates who will never need a key.
Little did I know that that key I rented with student loans would also open the door to a trap from which I would never escape.
“You signed a contract. You must honor it.”
My response: a legally binding contract requires a meeting of the minds. In a rigged system, there can be no clear, mutual understanding of the terms so no meeting of the minds can exist. Even if there was, unjust enrichment for one party at the detriment in perpetuity of the other party should clearly make that contract null and void. After all, who in his or her right mind would sign up for a lifetime of enslavement to debt in exchange for no guarantee of a verifiable or tangible benefit? [Obviously I am not a lawyer; my argument may sound reasonable, but it has no legal basis].
“I paid my student loan debt and it would be unfair to me if you didn’t have to pay yours.”
My response is this: at which point did fairness become a factor? Is it fair that children of the wealthy are free to work hard and earn an education and enter the job force with no crushing financial afterthought while the rest of us must become indentured servants in exchange for the mere opportunity to work hard and earn that same education?
In the U.S., college tuition is a regressive tax. To a wealthy citizen, $200,000 buys a pair of earrings or a couple of designer handbags; to the wealthy, education is merely an accessory. For the rest of us, college education is essential. It can mean the difference between reliance on taxpayers and food stamps while juggling jobs at Walmart and McDonalds, or getting a real job, paying taxes and providing opportunities for our own children.
One year later the illegal plant is declared a legal commodity. The first man is released after spending six years in prison and the second man is released after spending only one year in prison. Is it unfair to the first man that the second man is released from his debt?
Some will decide to embrace the chains of their student loan debt using personal responsibility as justification for their sublimation while chanting the following mantra:
I must pay off the student loan debt I was forced to take in order to get the chance to work hard and earn an education that would hopefully qualify me to hopefully obtain a job that would hopefully pay me enough so that I could hopefully pay off the student loan debt that I was forced to take for the opportunity in the first place.
Back-breaking denial feels good to some people. They see debt as bad and hard work as a virtue, closing their eyes to the fact that people who work 20-hour days making poverty-level wages are nothing more than pathetic victims of a rigged, cyclic system from which there is little chance of escape. Thanks to Fox News, these victims see themselves patriots as they take second jobs at Walmart and McDonalds, the sweat of their backs easing their slide into the abyss of modern day slavery.
But not everyone watches Fox News. There are people who see the “work ethic” lie for what it is, mass hypnosis shared by shackled, happy slaves. They see the student loan debt trap for what it is. And they are beginning to revolt.
PLAYING THE GAME & THE “INEVITABLE DEFAULT”
Although my federal student loan debt ($95,000) is current and managed through Income Based Repayment (I pay $50 per month, which doesn’t even cover the weekly interest), my private student loans have been defaulted through no fault of my own.
For a while I bought into the personal responsibility lie. I managed my private student loan debt meticulously for 25 years. When I couldn’t make the payments, I filed for deferments. When those ran out, I had my student loans placed into forbearance. When that was no longer an option, my loans became delinquent. I consolidated twice to buy time.
After I got a job making $30,000 gross a year, I set myself up on the IBR plan for my federal loans, calculated what the private student loan debt collectors could garnish, divided that amount by the number of private student loan servicers I had to pay, and sent regular payments to each student loan servicer, not missing a month for 5 years straight. It wasn’t enough.
Private student loan debt collectors made my life a living hell. They called me, my family, my office, and my references continuously, sometimes multiple times a day. I received at least 5 letters a week, issuing threats and demanding more payment.
I tried to reason with the private student loan collectors. I wrote letters showing them my budget, telling them I had little money to live on ” and they responded with a letter in which they actually admitted the system is rigged against me. In the words of Student Loan Servicing Center:
“We sympathize with your situation; however, we do not offer a program to reduce your balance …”
“You may benefit from an extension if you are unable to pay due to financial hardship ” keep in mind that customers who are experiencing long term financial problems will not benefit from this as it simply post pones the inevitable default.“
My private student loans were put into default by the private student loan servicers because my five years’ worth of consistent monthly payments was unacceptable. Legally, they could set the payment terms to whatever they wanted, so when they declared me in default, I began to see the light.
I immediately stopped paying on the defaulted private student loans. And I eventually stopped hearing from them. And I started to finally find relief from the mental trap of student loan debt.
REDEFINING PERSONAL RESPONSIBILITY
Banks, the government, brokers and collection agencies found a way to unjustly profit off the desire of the 99% to earn an education. They designed a system that would reward lenders and collectors for forcing debtors into default. Creditors reap a 25% collection cost profit on top of the original debt amount if a loan goes into default. Naturally, that 25% is added to the balance of the debt.
They call the part we play in their unscrupulous little game our Personal Responsibility. I think we need to redefine Personal Responsibility.
If I had irresponsibly gambled and lost $200,000, and had no means to pay, I have the option of going to bankruptcy court to get my gambling debt discharged.
If I had irresponsibly bought a bunch of designer purses and shoes and clothing and gallons of martinis on credit, then lost my job and found myself unable to make a payment on my credit card, I have the option of going to bankruptcy court and getting my credit card debt discharged.
If I’m a corporation or a banker who carelessly loaned money to people I knew would be unable to make the payments, I have the option of being bailed out by the government and the taxpayers, or filing for bankruptcy and getting a fresh start.
But if I am an individual seeking an education, and I borrow money in order obtain the opportunity to go to college, work hard and earn an education, then find myself unable to obtain a job or afford my student loan payments, I go into default. The legal protection given to careless corporations, irresponsible gamblers or mindless shopaholics is not offered to me. Bankruptcy court is off-limits; I’m legally bound to my student loan debt forever.
The question of personal responsibility should be directed toward the lenders and the U.S. government. In the case of student loans, money is loaned carelessly and without restraint because the intent of the banks is not to be paid back; the intent is to make an obscene profit, either by selling or defaulting the debt . The banks have no financial incentive to help a debtor stay current on the debt; quite the contrary.
Perhaps banking responsibility is different than personal responsibility. The banks couldn’t wait to give me money to attend law school, and they gave me even more money for living expenses while I studied and worked countless hours as an unpaid intern. The fact that I was a poor risk (female, over 40, with a terrible employment record, a former bankruptcy and a low credit score) was not a factor when the banks considered my loan application.
After finishing my first year of law school, I knew a career in law wasn’t for me. Unfortunately, it took a whole year of my life, plus $25,000, to find that out. My only hope to pay off my now $50,000 in student loan debt was to obtain my law degree and become a lawyer, so I went deeper into debt and hoped I’d eventually make a lot of money. My grades weren’t great, but that didn’t matter to the banks. They gave me even more money secured only by my hope.
Imagine my surprise when, in my third and final year of law school, I received a letter from the Board of Admissions telling me I may not be financially fit to sit for the bar. Although I submitted my application at the beginning of my first year, it took the Committee on Character and Fitness nearly three years (after I buried myself in approximately $90,000 more student loan debt) to question my fitness to sit for the bar since I had had a prior bankruptcy on my record.
My financial character was good enough for the banks to loan me over $100K to go to law school, even with a former bankruptcy on my record.
My financial character was good enough to get me into law school and keep me there for three years, even with a former bankruptcy on my record.
My financial character was only brought into question after the banks gave me the money to attend law school, after the law school was paid, and after I earned a law degree. For nearly three years the Committee on Character and Fitness couldn’t be bothered to review my application — in which I clearly admitted my former bankruptcy.
In hindsight, I should have walked away. But I fought and was eventually allowed to sit for the bar (a high price, paid with student loans). Needless to say, I did not pass, I did not become a lawyer, I did not get a good-paying job and I did not earn enough money to pay for my freedom from the soon to be $200,000 student loan debt.
THE COMING REVOLT
What the banks and the collection agencies and the brokers fail to realize is that there is nothing easier than practicing civil disobedience when you have no other choice.
I carry the label of “Student Loan Deadbeat” with pride. I made no mistakes and committed no crimes. My situation is not a result of any sin. I was lured into this student loan debt trap, and the idea that I should seek forgiveness for my predicament is as ludicrous as expecting a human sex slave to seek forgiveness for being unable to pay for her freedom after being bought and sold against her will.
As a Student Loan Deadbeat, I no longer see myself as a victim. I know I have no chance of earning the kind of money it would take to pay off my debt. I don’t work crazy hours at menial jobs so I can futilely toss hard-earned money into the bottomless pit in an attempt to gain the respect of half-wits and brag about my bootstraps.
As a Student Loan Deadbeat I don’t see myself as irresponsible. I see myself as a freedom fighter, a promoter of justice for other Student Loan Deadbeats, a rebel against the phony debt prison pushed upon me and others like me by a criminal U.S. Banking Cartel. Student Loan Deadbeats don’t play a game that is rigged against them. Student Loan Deadbeats are not obedient whores working to enrich their wealthy criminal pimps.
So what is our personal responsibility as Student Loan Deadbeats? Since we have seen the fallacy of the trap of student loan debt, we have a personal responsibility to warn others and expose the lies told by society, government, corporations and banks. We have a personal responsibility to free ourselves and others from the illusory debtor’s prison. And we have a personal responsibility to change a corrupt system.
WHAT TO EXPECT AS A STUDENT LOAN DEADBEAT
Student Loan Deadbeats do not have it easy. We cannot live like everyone else. Our struggle is continuous; mindfulness must become a way of life. I’m in my 50s, with no hope for retirement or even a full-time job. I earn money when I can get work from friends, live with roommates, barter, exercise and write. I live for today and fight my battles when I can.
And I do so with understanding and acceptance of the following:
I will probably never be bailed-out. Because of my student loan default, I will always be treated as less of a person, refused the same rights as others with “legitimate” business, gambling and consumer debt. There will be no fresh start for me.
I will never be employed. At my age, with my employment record, getting a good job is hard enough. A default on my record and a bad credit score (whatever that means) makes it virtually impossible to find long-term employment. Even if I got a real job, it would be difficult to keep due to constant phone harassment by debt collectors, the risk of embarrassing garnishments (after 2 garnishments an employer can legally fire you) and a looming court case.
I will never be able to run for political office. I am suspect, dirtied, worth less than others because my student loans are in default. Oh, if only I had merely hired prostitutes, or had illicit sex in a public restroom, or took secret, illegal contributions from powerful corporate interests or unscrupulous business owners ” I could be candidate material
I will never get a credit card or rent a car. I pay cash for everything. I will never have a credit card or finance anything again. If I need a car, I borrow one from my friends, or rely on others to rent it and sign me as a second driver.
I will never live alone. I cannot get a lease with my credit history. I must live with roommates and rely on them to obtain the lease in their name.
I will never get a cell phone in my name. This is probably a blessing anyway; no harassing calls. I have a friend who buys a package deal and I pay him to use his second phone. I never answer calls from someone I do not know.
I stay off social networking sites. If I share my story or a comment or opinion, I use a pseudonym; why make it easy for the thugs to find me? I know that anything I say can and will be used against me in a court of law, and I do everything I can to avoid being stalked, hounded and harassed by student loan debt collectors.
If I get a message saying I won something, I ignore it.
I will never get married again. Potential spouses are afraid to be associated with my student loan debt.
I will never have a savings account. I will never have more than $500 in the bank. I will never have a retirement account or assets or anything that can be taken away from me. I know the government can empty my bank account at any time, without warning.
If I get any extra money I immediately use it to pay medical expenses or buy essentials like glasses or get my teeth fixed or fix my laptop or shoes or buy second-hand clothing or luxury non-GMO food.
I am constantly afraid of being arrested. I review the State and Federal court dockets each week, looking for my name. I know the tricks debt collectors have been playing. I know they can file a lawsuit against me, not give me proper notice, and have me arrested for contempt of court for not showing up for a court appearance for a case I never knew existed.
Fridays are especially unnerving; debt collectors work with law enforcement to arrest debtors on Friday afternoons so they cannot process bail and must remain in jail until Monday. This is illegal is some states but, in the case of debt collections, legality is irrelevant.
HOPE FOR CHANGE?
Student Loan Deadbeats cannot buy houses. We don’t pay much income or property tax since we don’t make much money or own assets. I’ve learned to live below my means. I am a “non-consumer.”
On a lighter note, I am free of the headaches that go with full-time jobs and “owning” houses and cars. No more office politics, no more maintenance and repairs, no more worrying about making a mortgage payment on a house actually owned by a bank.
I’ve discovered James Altucher and his unique perspective. He has helped me see my situation as a positive rather than a negative. His words have given me the incentive to fight.
Making a living by my wits, living off the grid, leaving the rat race and conquering silly materialistic urges has helped me grow as a person. I fear less and take more risk. And I practice “onedownsmanship” with pride.
I’m learning not only to embrace my no-strings-attached lifestyle, but to love it. You can call me a loser but, the way I see it, I’m a winner.
If you’re drowning in student loan debt, or are now in default, stop being a victim. Stop playing a rigged game. Avoid applying for credit. Live simply, and stay off the grid. Live with roommates, borrow the things you need and barter your talents in exchange for necessities. Keep track and claim all your income and make sure you pay all taxes you owe. (There is nothing wrong with paying taxes; everyone should pay their fair share. Only greedy criminals and spineless lemmings avoid paying their taxes.)
Become a proud Student Loan Deadbeat and show the world that student loan debt is nothing to be ashamed of. Talk about it. Write about it. Debt prison is a mental construct, so free yourself in your mind.
But remember, you’re still a target of the powerful game players so be careful and mindful as you embrace your newly found freedom.