In the last two years, what was the scariest moment you recall? It’s a simple question, loaded with implications. I won’t contaminate the results by providing examples. Be as honest as your conscience (and readership) warrants.

Scariest moment? There have been a few. The most recent was the moment I discovered how many of my student loans had actually been accruing high interest (compounded quarterly), the entire time I was in graduate school. My actual loan debt is more than double what I borrowed (which was substantial enough). When I realized that my personal debt was more than the value of our home, and that I was already 40, and that no-one seemed to be hiring in my field, and that it was entirely likely that this debt will destroy the rest of my life, I was more scared than I had ever been before. I staggered around clutching at my heart. I had panic attacks. I had hysterical crying jags. I discussed divorce with my husband. I wrote terrible poetry.

Then I got extremely extremely angry. I don’t like to be frightened, and I don’t think this situation is fair at all. Even if I declare bankruptcy, none of the debt can be discharged. The Department of Education has told me that since Bush took office, there has not been one case nationally in which a bankruptcy judge has done so. I can only claim financial hardship for a couple of years, and the interest accrues (again, compounded quarterly) at about $1000 a month. If I don’t pay at least that much monthly, the balance goes up not down. If I am unable to pay and go into default, they will immediately add 25% to the total amount, and then come after me. They will garnish wages, report to the credit bureaus, and all sorts of other nasties – and I’m pretty sure that at some point in my life, I will be experiencing all of this. At this moment, I won’t go to debter’s prison, and when I die, they won’t go after my son – but if this adminstration goes the way it seems to be going, I don’t think I’ll even be able to count on that.

The fact is that even with tax debt and child support, you have some way to file a grievance or to settle. With student loan debt, you’re just up the creek. One consolidation loan I made in 1991 can’t even be refinanced. The original lender doesn’t exist anymore, and the loan was sold years ago – it wasn’t even listed in the national database. This loan will remain at 9% interest even if I bring it in to my other consolidated loans. So, the rest of my debt, which I refinanced at 3.5% would then do up to about 6%. I tried to get it reconsolidated under the government Direct Loan program, which would have shaved less than a point off the interest, but my lender refused to send the information. They said that they weren’t required to by law, and so they chose not to. After several conversations, they sold my loan to someone else.

The rest of my loans have been refinanced, but the truth of the matter is that I don’t currently take home anything close to the minimum payment. Even if I was able to paid everything on time, I would be paying on this debt until I was in my early 70s. How many people out there could make a payment of $1600/month on top of your other bills?

I came from a working-class/middle class background (depending on the year and my mother’s marital partner). My parents were unable/unwilling (not sure of the combination) to finance my college education. The only reason I was able to go to college at all was because of my high SAT scores. I succeeded in finishing – finally – and now I’m a bone fide PhD, but it appears (at this point at least) that my PhD won’t be enough to pay for my PhD. I’m thinking about attending a weekend “get your MBA” program. Jeez – I might as well just give up and become a realtor. After all these years of hard work and sacrifice, it sure is a slap in the face.