All my life, I’ve heard people complain about the Internal Revenue Service and how much power it wields over our citizenship.
If a U.S. citizen won’t or can’t pay his or her taxes, the IRS can take their house, take their car, take their belongings, garnish their wages and basically wring the money out of him or her in any way it deems necessary. It can even send the person to prison; just ask Wesley Snipes, who was just sentenced to three years for failing to file his tax returns.
The IRS is, indeed, powerful, but there’s another federal entity that I believe is even more insidious — The Federal Student Loan Authority.
What’s up with that, you say? Student loans are a great thing! They allow people who otherwise couldn’t afford an education to get one now and pay for it later. What could be bad about that?
In answer, let me tell you my story.
In 1987, I got sick of low paying and often dangerous jobs and decided to better myself by completing my education. This was not easy as a divorced mother of a small child, and to make ends meet, I had two full time jobs, but even that wasn’t enough to pay for school. I qualified for grants and got those, but that also didn’t cover the cost of tuition and books, so I had to apply for federal student loans to cover the bills.
I got my undergraduate degree in 1991 and added a third job to the two full time 
jobs in order to help fund the cost of getting my Master’s degree. The stipend I received from OU for teaching freshman composition was small — at the time less than $900 a semester — but it helped pay the bills. I even worked on the side, fixing people’s computers and editing their writing. Even so, as a single mom, I still couldn’t cover all the costs, so again, I had to get a student loan to help pay the cost, always believing I’d be able to make the payments when I got out of grad school.
With three jobs, a heavy class load, papers to grade and a son to raise on my own, it took four and a half years to get what would have normally been a two to three year degree. When I finally left school in 1996, my student loans equaled $57,000. It was a large sum of money, but I still believed I could handle it; after all, my ex husband was supposed to pay child support every month, and I could put that toward the payment.
My first job out of school didn’t pay much (only $28,000), but it kept me so busy that I had to drop all my other jobs. I didn’t mind — there was, after all, a future in it — but it and the lack of the promised and court ordered child support left no money to pay the student loans, which in very short order defaulted.
The government began garnishing my wages soon afterward, and a representative of the FSLA urged me to consolidate my loans. Believing that was the best thing to do, I followed her advice, and as a result, the penalties related to my defaults were all rolled in to one loan. At that point, the principal on the loan rose to $87,000. Why? Because each of the four loans I consolidated had penalties and interest associated them. When those were added to the principal, the repayment schedule demanded that I pay about $900 a month to keep the loan current. At the time, I was bringing home about $1,200 to $1,300 a month, so again, there was no way I could make the payments. Again, the loan defaulted, and the FSLA began garnishing my wages.
Without delving into the story further (you know where it’s going anyway), the loan is now $187,000 and just gets bigger every year. I will never get out from under it unless I win the lottery, which I can’t afford to enter, because I owe so much money. My credit rating will never be good, because it will always loom over my head like the Sword of Damocles. My wages will always be lower than I earn, because they’ll always be garnished, and each year the amount I owe will just get bigger and bigger. (By the way, the last time I talked to an FSLA representative, she encouraged me to let the loan default again, because at least then, I could make the payments through garnishment. We both realized I’d never be able to pay $1,800 a month at my salary.)
The sad thing is that I believe in paying my debts, so the frustration of never being able to pay this debt to the government’s satisfaction weighs on me constantly.
What’s the answer? I’m not sure there is one. Federal student loans can not be forgiven by bankruptcy. One thing I believe must change are the consolidation practices. Students should be told that, if they consolidate, the penalties they incurred will become part of the principal they owe. Once loans are consolidated, even if there were a rule change and penalties could be forgiven, consolidated loans wouldn’t qualify, since the penalty becomes part of the principal upon consolidation. And, even better, once the penalties and interest become part of the principal, you’re paying interest on all of those things rather than just the original principal. It’s like a big ball of snow rolling downhill, gaining speed as it gains girth.
In any case, I believe the federal student loan program is flawed. While it sounds like 
a great deal to financially struggling students, it’s a rock around their necks that often drowns them or, at the very least, keeps them treading water without making progress for the rest of their lives.
I keep hoping for some kind of windfall. The second I got enough money to pay that loan, it would be paid. Forget luxuries or vacations, that $187k would go into the FSLA coffers, and I wouldn’t blink an eye.
But in my heart of hearts, I think it’s wrong for the government to add $130,000 to a student loan (and more and more each year). I think it’s wrong that my original loan makes up only 31% of the total I owe. I think it’s wrong that there is no way, in this economy and with my circumstances, that I’ll ever be able to pay it. I could pay the original $57,000, but not the additional 69% added on in fees and penalties. Not to mention the thousands in interest that are added every year.
At least with the IRS, you know where you stand from the get-go. With the FSLA, you are told what a great deal you are getting into, how helpful consolidation is, etc. and in many cases (for large loans especially) it’s a lie and a trap.
So, if you are a student or plan to return to college and fund it with federal student loans, think long and hard about it before you sign the dotted line. If I had to do it over again, I’d have taken 10 more years to graduate just to avoid borrowing on my education. Try for grants and scholarships, but avoid loans like the plague! Just keep in mind what happened to me and what happens to thousands of students a year.
Next…tuition rate hikes are pricing college right out of most student’s means to pay. What do these hikes pay for, and are they really a way to ensure students have to get loans in order to attend the university of their choice? Stay tuned!
Stumble It!
my Weight Watchers meeting, particularly since I’ve been struggling so much this past month, thanks to my bout with the flu. It feels great to know I’ve lost 10% of my body weight after so many years of trying and failing. I have finally come to understand that weight loss is all about mind set. Through my journey — so far — I’ve learned that I can basically eat what I want as long as I control my portions, and I’ve learned that there is no such thing as failure. For example, this week my friend, Kim, celebrated her birthday, and I had a HUGE piece of red velvet cake with cream cheese icing piled so high that it easy made up a third of the cake’s height. (OMG, yummy!) In the past, I would have considered myself a failure after eating something like that, but now I just count it and go on. The good news is I lost 4.8 lbs in a week, AND had cake. Failure? I don’t think so!
ld be home when the window replacement people got there to measure and replace my storm window that broke in last night’s hail storm. The only thing better than having to wait less than 24 hours to get a broken window fixed after a very damaging storm is the fact that it was the only storm window I had that was letting condensation in, so I needed to fix it anyway. Oh, and getting the afternoon off on a Friday, of course.