Financial woes and student loans

Miscellaneous and Personal Stuff I Must Share
1

So I’ve gotten myself into a bit of a mess. Hold on, because it’s time for some serious tl;dr.

I’m 28. I was raised to know that I was very smart, and my brain would take me far one day. My parents always stressed that I was to go to college one day, so I wouldn’t have to work as hard as both of them had to (my dad owns his own contractor business for 30+ years; they never wanted me to have to work my body as hard as he’s had to). So, I did my part: I worked in school, I got accepted to a good school that offered me what I wanted and gave me a $10k a year scholarship to boot. Awesome! Luckily I have parents to encourage me and to help me navigate the loan process.

It’s ten years later. When I was 18, I did not pay as much attention to the loan situation as I should have. Doubtless, my mom told me everything she was doing, but I just don’t remember. I graduated college after some time (took me a few years while working retail concurrently), moved across the country, fell into a bad violent relationship, and finally the loan people found me. I was extremely apologetic and set up a payment plan, and haven’t missed a payment yet. Granted, it was a huge shock for someone to tell me “hi, you owe us $18k,” but like I said, I’ve been making payments, and I was okay with having that debt and paying it back, and haven’t missed a payment.

A week ago, I got a letter saying that now my wages are being garnished. What?! I’ve been making payments!! I spent two hours making phone calls (“your loan’s owned by this company,” “no, it’s actually this company,” “nope, try here,”), only to find out that apparently I owe an additional $16k on top of what I thought I owed. Never received a letter, a phone call, nothing from this other company. I realize that was my responsibility, but I had no idea!

So my debt’s doubled, I owe almost $34k to various companies. On top of that, I’m already paying $200 a month to the loan I thought I was paying down, and the garnishment adds $300 on top of that. I net approximately $1500 a month. Rent’s $500, student loans another $500…today I washed jeans and got a hole in one knee and I cried because I can’t even afford new pants.

I am not an extravagant person. I do not buy anything. I get free QuickBooks subscriptions from my job and I set up my life as a company so I could track my money better, and I can’t cut anything from anywhere else. My money all goes to loans, my phone ($47/mo, flip phone, no data, just service and texting), groceries, rent. I don’t even have the option to consolidate or rehab the loan unless I make “voluntary payments” on top of the garnishment. How can I make MORE payments on top of the current ones when they’re already literally killing me?

How can I ever own a home or have children? I’m so deep in this hole that I can’t see a way out. I have a good job with great benefits but every time I try to improve my situation it all just gets worse.

Thanks for reading. Sorry for the rant.

PS I really do want to pay down these loans somehow, I swear I’m not trying to weasel out of anything without paying so please don’t think that

2

Have you checked out the William D. Ford Federal Direct Loan Program? In that, the Education Department takes over your loans. One plan has you making payments based on your income level, and whatever is left unpaid after, I think, 25 years is forgiven, although the forgiven amount is counted as income for income tax purposes.

EDIT: It’s not just for current students. They can take over the loans you have now.

3

How many hours a week do you work to net $1500? If you’re only working 40 hours, you could get a 2nd job for evenings or weekends. Most professionals I know in their 20s work more than 40 hours. If you’re already working overtime and only making that much money… well then I guess that’s not an option.

4

Meggroll - Are you working in the field your degree is in? $1500/mo is only about $12.50/hr before taxes, I’d bet. That’s not much money. Are you looking for a better-paying job? A second job is also a good idea, although better to work one if you can manage without a 2nd.

Good luck. Being a grownup is hard work.
StG

5

$500/month for $34K is a lot. What is your interst rate? 13 percent?

6

Get rid of your cell phone. Get a Voice phone number. You can call and text from your computer. If you really need a phone when you’re out, get a T-mobile prepaid. You can get one that is 10 cents per minute or text.

Get a roommate.

Figure out what is going on with these loans. You don’t want a call from some other loan company in a few years saying you also owe them thousands of dollars.

7

I had a similar problem, and my wages were garnished. Thankfully I didn’t have to pay as much.

Get a second job. Nail down exactly what you owe. Let 3-6 months go by paying the garnishment and then call the garnishment company and beg and plead for a lower payment. By then you will have shown good-faith payments; they may be in a mood to negotiate. Do not be ashamed to tell them your circumstances. Tell them you have a hard time making ends meet for food, and without food, you can’t pay the loans.

And never stop paying off those loans. $32 K is NOT an insurmountable amount of money. It sounds like it is, but you can do it. At $500 a month it’s 68 months which is just under six years. If you can get a second job or get a better paying job you can pay it off. If not, it takes you ten years, but you won’t be dead or anything at 38 (says the 37 YO who is currently taking on NEW school loans).

Get a roomate.

Having a home is not out of your reach. You might just have to delay a bit. I probably won’t buy a home until I am in my forties. Of course that is personal preference, but it’s not the end of the world if you don’t, too. People live longer and longer these days.

Having children relies entirely on you getting a better job. I’m not one to say that you should be rich before you make babies but I definitely think you should at least be able to afford the basics.

And most of all, relax. You’re 28. You have time. You can make this work. It’s just money, and it can be earned. Have heart.

8

Another “been there, yeah it sucks” post. I second the advice to nail down exactly what you owe and to whom. Make an appointment with your alma mater’s financial aid and ask for help. Negotiate, and move things around. You can get through this! It istough but not impossible. Hang in there.

9

My husband had the same problem 20 years ago. One of his loans was sold off. So he thought he was paying all of the loans, but he was missing one of three.

He ended up declaring bankruptcy, paid off all the defaulted loan, once the bankruptcy was over, paid off the other loans, had several tough years, married well :slight_smile: and is now financially stable. There is hope.

10

Are these federal loans (or can they be made into federal loans?) The federal loan repayment plans are awesome, and will never take more than 15% of your income.

11

I agree it’s not insurmountable, but you don’t appear to be taking interest into account. It won’t be paid down that quickly.

12

Yeah, it totally sucks. I have about three times your school loan debt, if it makes you feel any better.

As for having children, well, here’s my “plan” (i.e., how things shook out for me). My husband makes enough to support our family, and I’ve stayed home with the kids. For 10 years, I’ve made $0, and the vast bulk of my loans have been in forbearance and deferment because of that. My loans are through Sallie Mae, and they haven’t hassled me about it - I just fill out the form each year, honestly swearing that when I get a job, I’ll resume payment.

I’m also seriously considering work for a non-profit, because if I do that for 10 years and pay (even income-sensitive payments) that whole time, whatever might be left will be written off.

Definitely nail down the total you owe, to whom, and if you can consolidate/move to a better company, and/or get income-sensitive payments set up.

13

Thank you all so much for all the kind words and commiseration. It really, really helps to know that I am not the only one who’s screwed up like this.

A few people mentioned getting a higher paying job. I actually just started a new position at my current company paying a dollar more an hour, with potential for up to $9k in bonuses. Assuming I get those bonuses (which I should, I’m currently killin’ it), I’ll get approx $39k before taxes. However, I haven’t gotten any of those bonuses just yet…but I will. The dollar raise has been invalidated by this garnishment, and I can’t get a higher paying job yet, because I just got this one.

I did apply at a few retail places, including the big box store that employed me previously for nine years (nine years! whoa). I haven’t heard back from two of them, but one told me that they can only have someone in for days…which is when I currently work. But I’m trying.

I do have a roommate. I have a live-in boyfriend who is thoroughly wonderful. He does pay his half of the rent, and can be relied upon to cover the rent if need be, so I suppose I was slightly misrepresenting the situation. The thing is, it’s very very difficult for me to feel comfortable with relying on someone else, especially a guy. I came out of a violent relationship before this one, and if I can’t support myself now, what happens if this relationship were to go bad? I know that my boyfriend is reliable and kind and loves me and would not put me in that position, but retaining my independence has always been paramount and having these debts makes it so I have to rely on him. It’s just a weird psychological thing that I have I guess.

Ugh. This month has just been a roller coaster. My car crapped out, and I can’t afford to get it fixed, so we’re down to one car and carpooling, which is okay but not ideal. On the good news side, my boyfriend just secured a position with a seven dollar an hour raise plus bonuses (!) and benefits, so hoping hoping HOPING that it all evens out soon.