It figures. My first loan consolidation was in 1991 – after my Master’s and before my PhD work. In the previous year, all student loan consolidations were completely subsidized. From the next year onward, all loans had separate bookkeeping for GSL and SLS loans, so that the GSL loans would continue to be subsized.
What’s the difference? It appears that the whole time I have been in school, even my GSL loans were accumulating interest to the tune of 9%. The total is now close to 3x the original amount. And that is before my PhD work – note the year of 1991. So now that I am consolidating all my loans, it gets tricky.
I have not passed the legal total amount of borrowing – but that total is only the amount disbursed (or as I like to think of it, “dispersed”). It is not the total owed. The total owed is considerably, considerably more. Did I say considerably? As in… like… the total mortagage on our unpaid-for house? Or as in double-digit multiples of my not inconsiderable credit card debt? As in maybe 9 or 10 cars, although I’m not sure since I don’t have a car? I’m trying to put things in perspective.
Somehow I was thinking that the interest on these loans was covered by the feds while I was in-school – wasn’t that the whole purpose of the in-school deferment? Now that I have my PhD – in the humanities…. if I got a real tenure-track position (adjuncting by the course doesn’t pay very well – only slightly more than one student loan payment) then I could maybe do it. If I didn’t buy a car or pay off credit cards.
Thanks to the laws now, you can’t even really default. They take your tax returns (assuming there were any), they garnish your wages, they destroy your credit, they add their collection and legal expenses to your tab without any (noticable) oversight – I think if I left the country, Interpol might even come to find me. If I declare bankruptcy, I still have to pay the student loans. Only if I am dead or completely disabled…. anyone got a hammer? (that’s a joke!)
Ok, so it gets worse. The consolidation from 1991 was at 9%. It wasn’t entered into the federal database, for whatever reason. In any case, the interest can’t be changed. All of my other loans being consolidated now will come in with a weighted interest of just over 3%. When you add the (enormous figure of the) previous loan, not only does the total go up… a lot… but also the weighted interest goes up… a lot.
And the monthly payment, even at interest-only for the first couple of years, jumps up…um..well, you know. This is to the point that my husband and I discussed the possibility of having to divorce for financial reasons. You think I’m kidding? Except that wouldn’t really make much of a difference to anything because THERE IS NO ESCAPE.
This is one of the few countries that doesn’t provide for higher education for smart people. I had one of the top SAT scores in my senatorial district – because of that and the Pell Grant program, I was able to go to undergrad. Of course, the Republicans are trying to cut the Pell Grant system. Don’t forget that it was our dear departed Reagan who made grants taxable. And Clinton only managed to get a small part of his program for the interest on student loans to be a tax deduction like the mortgage on a house (I expect to see even that gone shortly).
Everything after my undergrad years was done on loans. I graduated from high school in 1982. I got my PhD in 2004. In the humanities. I’m not part of the old white boy network because I’m female. I’m not part of the political-adjustment network because I’m white and straight. I do interdisciplinary work, which everyone pays lip service too but few departments actually incorporate. Basically, the only way I’m going to get a job in this market and in these economic times is to write about three best-sellers in a row. Is it time to get my real estate license? Maybe I could sell Amway – I used to be a Jehovah’s Witness – there’s not a lot of difference… hee hee.
There was a movement to try to allow incoming student loan consolidations to be refinanced with a new lower cap – but nothing has come of it that I can tell. In this administration, which aims to break us all, I certainly don’t have any hopes for it.
It’s been a horrible day. My only real hope is that they have the dates wrong for when all interest on the loans weren’t subsidized. My next call is to the Department of Education. The “loan servicer” suggested I call my congressman, but hemmed and hawed when I told her I lived in Georgia – I didn’t hem and haw – I laughed out loud.