Student Loan Debt: My Personal Story
I have a very personal story to share with all you people out there
with student loan debt. I am sharing this story in the hope that
as many people as possible can learn from my mistakes. This is a
true story that happened to me back in 1999.
I had been out of school for quite a while. I was working at a big
law firm in New York City making a decent living, paying my bills
and some of my debt. I had (foolishly) incurred a lot of
credit card debt in my youth and I was really paying for it. I also
had about $11,000 in student loan debt from a Federal Subsidized
Stafford Loan I had taken out when I was in school. I wasn't paying
my student loan debt. In fact, I completely ignored my student loan
debt, throwing all the threatening letters I received into the trash!
My thinking was, "what could they do to me? If I ignore the
debt the government will step in a pay it off. Besides, those monthly
payments are way too high!" There was a moderate amount
of guilt associated with my actions, but it's hard to feel sorry
for the richest government that has ever existed on the earth.
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So I was moving along with my life, happy to be slowly improving
my credit rating by paying of my old credit card debt. I got a raise
at work and started investing a large chunk of my paycheck into
my employer's 401K plan. Yeah, things were OK and getting better.
It was at this point in my life that I opened a business checking
account because I had big plans of quitting my job and starting
my own business. I started making small deposits to this account
every week or so and soon I had over $1000 in that business account.
And that's when it happened.
One day, I was performing a routine balance check on my business bank
account and found that my bank account was completely empty! Shock?
Horror? No, it was more than that. I nearly fainted! I immediately
got on the phone with the bank to get an explanation. They informed
me that my money was legally withdrawn from my account by a law firm
representing the government in student loan default matters. I got
the phone number for that law firm and called. They told me that they
had obtained a "judgment" against me in court 3 or 4 years
prior, and that they had every legal right to seize any and all money
in my bank accounts. Wow. That's some serious power, eh?
So, all those threatening letters I was throwing away: I really shouldn't
have done that! If I had responded to those letters, I would have
been able to avoid the nightmare that I have just described. If I
had contributed a little less to my 401K and made payments on my student
loan, I would have avoided having my bank account emptied. And to
add insult to injury, because my business bank account was empty,
the bank assessed some very large and nasty fees due to lack of funds.
For the class of
2000 in the USA,
the average
student loan debt
for college graduates
was $13,000.
The average for bachelor graduates was $19,500. |
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Student Loan Consolidation: Do it!
Hey! Learn from my mistakes! Consolidate your student loan debt
and do it now while interest
rates are still low. If I had consolidated my student loans
years ago, I would have been able to secure a fantastic interest
rate, which would have made my monthly payments far more manageable
and I would have been much more inclined to keep up with my student
loan payments.
The market for money for the average consumer is the best it's
been for many years. Take advantage and get a great consolidation
interest rate for all your student loans. The economy will be strong
again soon, and that means higher
interest rates. If you don't consolidate your student loan debt
now you'll probably regret it. I am not saying to go for the first
student loan consolidation offer that comes your way. You should
shop around for the best consolidation deal, just as you would shop
around for the best mortgage
or credit
card deal. Nowadays, there are a plethora of organizations out
there that specialize in buying student loan debt (it's obviously
a very profitable thing to do these days.) All that competition
is great for you, the consumer, so let the consolidation companies
fight for your business. Don't settle for anything but the very
best deal.
Thanks for reading and good luck!
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