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The New Indentured Educated Class
by Chase Cryn Johannsen
November 18, 2010
If only they had their health …
President Obama has emphasized the importance of higher education, and recently implemented ambitious higher education finance reform that will serve to benefit college students now and in the future. Although these changes are noteworthy, little has been done to help the many individuals who currently owe student debt, particularly private debt, and are no longer in school. With high unemployment and a stagnant economy, many student debtors are finding it increasingly difficult to repay their student loans and also cover the basic cost of living. An array of situations make it difficult for student loan debtors, whom I call the “indentured educated class,” to effectively pay their loans. This article will explore the relationship between student loan debt and its effect on those with health problems, using testimonials of those who have experienced this crisis and my own experience as the founder and executive director of the nonprofit All Education Matters Inc., where I receive hundreds and hundreds of stories a week from individuals who owe student loan debt.
Mrs. V received an MBA in 2007, and her husband recently graduated with a doctorate in Chemistry. Mrs. V has been struggling with health problems since the birth of her daughter, suffering from complications after having a cesarean section. In addition, the couple’s health insurance barely covers the basic cost of medical treatment, and their premiums are high. Because of this, Mrs. V and her husband realized they had no choice but to borrow more money once they had their daughter.
“I had to have surgery to fix a complication with my c-section. Again it cost us thousands of dollars out of pocket, even after paying incredibly high insurance premiums,” said Mrs.V. In many ways, Mrs. V and her husband are fortunate—they are able to make their loan payments. Mrs. V’s medical problems were short-term, but the couple continues to struggle financially as a result. Other debtors, with persistent and lifelong health problems, find themselves falling deeper into debt. Many of them fear there is no way out.
The testimonials from another indentured graduate, Mrs. P, and her two daughters, Amy and Jessica, illustrate the perilous situation that so many debtors with chronic health problems face. The two sisters attended DePaul University in Chicago, and both are recent graduates. Learning of my work as an advocate for student-loan debtors, their mother was the first person in the family to reach out to me. She has her own student loan debt, and she cosigned on her daughters’ loans.
Jessica has always struggled with serious health problems. When she was 16 years old, she had a heart transplant. A year and a half ago, she had her second organ transplant, this time it was a kidney, donated by her sister Amy. Despite these major surgeries, Jessica always wanted to go to college, as did her sister—they thought degrees from a good university would ensure that they would make decent livings. Even though they had received a few scholarships, they found that they needed to take out loans to cover the total cost of tuition. Fortunately, they were able to avoid taking out private loans, in which lenders can garnish wages without a court order and use other harsh ways to deal with debtors. But now out of school, Amy and Jessica are finding it increasingly difficult to pay their student loan debt.
At this juncture, Jessica said, “the total debt, it is safe to say, between the three of us is around $90,000, and that does not include the cost of late fees and accruing interest for the time my mom’s loan was put into forbearance.” One would assume that the two women, who have business degrees from a well-established university, are at least making decent wages. Like so many student debtors, however, that is not the case. Jessica earns $12 an hour, and Amy makes $8 an hour, plus tips.
Sadly, Jessica also continues to have health problems. “I just recently got over a cold. For most people this is not too much of a concern. But for me, I almost had to go to the ER. I still had to miss a day of work, which adds up. I am out of sick days, and any days that I have to take off will be taken out of my paycheck.” Moreover, her recent transplant makes it necessary for her to have regular tests. “I get a least two [tests] every month or so. This last transplant made things even more difficult to pay my student loans. It has really been hell.”
Another member of the indentured educated class, Ms. T was able to go on disability for medical problems that she attributes to the stress of owing $177,000 after obtaining a bachelor’s degree in Sociology from the University of Southern California. That mindboggling sum has mostly to do with the amount of interest (as high as 10% on the bulk of her loans) that has accrued on four loans she has through the lender ACS. In addition, Ms. T’s aunt was a cosigner on her loans, something that causes her a great deal of emotional distress.
When Ms. T’s health problems began, she was terrified that she would lose her job for being ill and missing work. After six months of being at a job she had fought hard to obtain, Ms. T began experiencing chronic bladder infections. “I had an infection that was so bad, it turned into a kidney infection. I had to go to the hospital two days in a row to receive intravenous antibiotics and other fluids. I remember worrying so much about missing work. My life depended on work, because I wouldn’t be able to survive if I lost my job. The stress of not being able to pay my loan was [overwhelming]. I could not do that to my aunt, because then she would have to pay. I continued to have chronic bladder infections for the next five years. … I would miss days of work, and I would freak out because I knew that I did no have anyone to fall back on.”
Ms. T wanted more than anything to work for a nonprofit after graduating, but instead found herself working 12 to 14 hours day in a job that caused her to develop other health problems. For instance, she had to be around loud trucks. Every day for nearly five years, she was exposed to the noise of truckers releasing their air breaks and driving over speed bumps, which caused the containers of their chassis to lift, and then drop back. “Over time, my friend and I realized that I could not hear as well as I used to. I also started having ringing and pain in my ears.” She added, “here I am, I’m 29 years old. I have chronic bladder pain that occasionally goes away. I have carpel tunnel—my hands work like a 90-year-old woman’s. I have hearing damage so my ears are like a 90-year-old woman’s, and I have so much stress and anxiety that I have panic and anxiety attacks that are scary as hell.” Ms. T has not yet defaulted on her loans, but must endure a tenuous situation as a result of carrying such a high burden of debt.
Another indentured graduate, Ms. B presents the worst-case scenario for student borrowers. “I am the first in my family to go to college, and somehow I think I would have been better off with a high school diploma.” Unfortunately, her sentiment—the regret of obtaining a degree is shared by thousands of student loan debtors, especially among those who have found themselves dealing with mounting medical care costs. It raises an important question about the cost of higher education: What does the student lending crisis look like when understood from the perspective of an individual or entire family who affected by health problems and health costs, and who are also struggling or unable to service student loan debt?
Ms. B graduated in 2003 from Belmont University with a degree in Music Business. She has defaulted on her private loans with Sallie Mae and estimates that her total debt including federal loans is approximately $87,000. “I have been unable to keep up working multiple jobs to try and pay for my rent, utilities, medications, doctor’s visits, etc. With no insurance, the prices just keep going up.”
To make matters worse, Ms. B is harassed continually by her lender. She explained, “The calls [from my lenders] got more hateful and abusive, and I began having massive panic attacks. They called me at my work, my school, my parents. This year alone, I have missed over a month of work without pay, and I have to choose between medicine that makes me well enough to go to work, or things like food.”
As Ms. B explained, fitting student loan payments into her monthly budget has become impossible, and it is clear that Ms. B did not wish for her loans to go into default. “I am an overachiever and a hard worker. I have had the same job for six-plus years. My car is a ’99. I was not raised to spend money wastefully. Nevertheless, I will never be able to have anything. Own anything. Marry anyone. I have kept my job in a horrible economy, even when many in my industry [lost their jobs as a result of] downsizing. Yet I am sick and depressed. I am scared, and feel like I am in a hole from which I will never get out.”
These testimonials are just a few that illustrate why the U.S. and its educated citizens are facing a serious and significant dilemma. Indeed, recent reports show that student loan debt has now surpassed that of credit card debt with the estimates of outstanding federal and private loans nearing $900 billion. That number alone suggests that there is a full-blown student lending crisis, but the personal stories from indentured educated citizens provide us with an intimate snapshot of the human condition for a student loan debtor. When one’s education debt burden is combined with health problems and the cost of medical care, many student loan debtors experience severe depression and even suicidal ideation.
These stories reveal to us how difficult it is to be part of the indentured educated class. All of these individuals have had the misfortune of suffering from an array of health problems, which has made it difficult, if not impossible, to pay back their student loans. On top of the physical problems they have dealt with or continue to contend with, the emotional and psychological pain has taken its toll. Again, the Obama administration has made great strides in higher education finance reform—and health care reform too. However, these testimonials from current student loan debtors indicate that more reform is needed.
____________________________________________________________________
Chase Cryn Johannsen is founder & executive director of he nonprofit All Education Matters, which advocates for student-loan debtors and a blogger for the Huffington Post.
Related Posts: Debt-for-Diploma System (pdf); As Student Debt Increases, Colleges Owe More in Performance; Student Debt: Earnings Premium or Opportunity Cost? (pdf)
Tags: All Education Matters, Chase Cryn Johannsen, debt, health insurance, health problems, higher education finance, student loans, Tamara Draut
15 Responses to “The New Indentured Educated Class”
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Curious what you think the public policy solution to this should be? What reform, specifically, would you like to see? If we figure loan forgiveness is neither responsible citizenship or sound public policy (not to mention political policy for either party), what, then, would you suggest to lawmakers in Congress and the White House?
Thanks in advance for the reasoned response.
Pete
Hi, Pete,
I have some suggestions for solutions to the problem, and would gladly share them with you. In my view, only the banks and corporations receive bailouts and forgiveness. God forbid we should allow that to Americans who sought degrees such a thing - that would be absurd! That is, however, another story . . .
-Cryn Johannsen
Founder and Exec. Dir. of All Education Matters, Inc.
Pete, I'd like to sit down with Mr. Rodriguez to discuss policy plans. I've been writing him for months and have heard NOTHING back from him. It would be great to actually have a conversation. I have some ideas that I'd like to share with the White House.
We - the indentured educated class - deserve a place at the table to discuss the student lending crisis.
Respectfully,
Cryn
@Peter R
I have no idea. Isn't that what we elected the 545 people at the top making decisions for the rest of the country to do? "Sound Public Policy"? Is it "Sound Public Policy" to allow the private education loan institutions of the country to continue to suck the buying power out of the country while they have record gains? Paying their CEOs and top figures ridiculous salaries and bonuses in the name of education? Is it sound public policy to stand by and watch while the largest one pays $200k to a campaign for the soon-to-be speaker of the house, Mr. Boehner? All because its "legal"? Good thing the laws aren't made by the actual people huh Mr. Peter R?
The Buying Power (20-45s) of the country are so locked-up paying for mortgages disguised at Student Loans. Where, besides a failed mortgage market, do you think the money for the economy is? Do you know that Student Loans now surpass credit card debt in the country? I, Mr. Peter R, would never say that I am not responsible for my own actions, however will these people and companies creating the policies that literally lock-up the educated people of the nation be as responsible? No never. They did nothing wrong. In the face of the law they did nothing wrong. But we know morals and ethics don't really pertain to these people do they Peter?
We're built from the beginning to believe in education from the time we are young children in this country, and bred to believe that some piece of paper will get you somewhere for the future. How can you get somewhere when you've purchased a 4 year degree at $100k at 22 years old coming out of the gate with no end in site? Then looking for a real job for a year and the debt in some cases has almost doubled? Or better yet, in my case, getting through 2-3 years of school and finding out you can longer borrow the money to finish the degree, but still be stuck with the debt and STILL be responsible to pay it back with out it? At least with a mortgage you can go into foreclosure. That's encouraging.
Heck Peter R, I bought the car and they forgot to give me the wheels! The funny thing is they want me to drive it anyway! haha! I bought the house and they forgot to put a foundation under it, so its unliveable by the law! The CEO of Sallie Mae still gets his custom built golf course though! I guess its just a matter of when you were born. Some people get all the luck Peter R! The nerve huh?
WHERE IS THE RESPONSIBILITY OF THE LENDERS???! Of my free government that was meant to "serve and protect"? At $200k in campaign contributions from the lending companies, how can we compete when you're serving and protecting the
wrong individuals???
Mr. Peter R., I have loved my country since I was a child and was always taught to love my country. I've never before wanted to leave so badly. I have personally interviewed tons of people with debt the size of mortgages. People in even WORSE financial distress (if you can imagine that) than me. This is what keeps me afloat though. The fact that some poor sucker was duped into believing that a higher education would bring them prosperity in their lives, prosperity that would help them have a good life. That makes me happy that I am not them. Isn't that kind of sick?
My last and final question for you Peter, is, What do you think the buying power of this country would do, if you relieved them of just HALF of their student loan debt? If you took that recent $600 Billion and just relieved us of HALF our debt? Save your answer I'll tell you. We'd buy Homes. Cars. Begin families. Start living life instead of being a slave to a society and a government that no longer has the interest of the actual people in mind. That's what we'd do. I promise you the economy would be so stimulated it would be like getting a jump start in the dead of winter.
One way to start to solve this problem is to halt the ridiculous fee hikes in education which continues to beat the rate of inflation every year (I live in Southern California).
@Pharmacy Student - I think that's a great suggestion. It is terrible what is happening to the University of California school system.
In my case it is asthma.
I have no health insurance now, and an Advair Disc waiting for me down at the pharmacy. But it is 250 dollars without insurance. So I am trying to beg, borrow, steal the money for it.
In the meantime I wake up every single night with terrible attacks of asthma and cough so hard I think my brain rattles against my skull.
And a tickle in my upper chest like you wouldn;t breathe.
I use the fast acting inhalers, which I can afford. One is a prescription Albuterol, and when that doesn;t cut through the asthma after 5 or 6 puffs in succession, I take a few puffs of over the counter Primatene Mist.
MY heart is really racing now, but the breathing has eased, and the coughing has stopped.
And @ Peter R, this is from a Poem called: "Song Of The Galley Slaves" by Rudyard Kipling
.....
The salt made the oar-handles like shark-skin;our knees were
cut to the bone with salt-cracks; our hair was stuck to
our foreheads; and our lips were cut to the gums, and
you whipped us because we could not row.
Will you never let us go?
By the way Peter R,
I graduated from Law School, and curse the day I ever took out student loans. Sometimes curse the very very day I was born.
And certainly have nothing but fear and regret with which to live out the rest of my miserable days.
I am deeply in debt, and poor.
Poor until the day I die.
What I wouldn't give to be able to sleep all night without waking up once with an asthma attack.
But I also recognize that there are people with worse health problems than mine, as Cryn describes above.
That sounds pretty serious. We all have our struggles. I'd like to share your story as a matter of fact over at All Education Matters, Inc. Would you be willing to send me a long testimonial via email (ccrynjohannsen@gmail.com)? You can remain anonymous. I hope you are willing! Thanks so sharing - that's not a good situation for you, and I am doing everything in my power to make sure that our voices are heard.
My parents are currently helping with my student loan debt, but that will change soon. They can't really afford it, but neither can I. On top of that, I have a small sum of credit card debt that I haven't been able to take care of due to either unemployment or low paying jobs. It's terrible when you have to decide between rent or a bill -- or rent and food, the bill not even being an option really.
And now the medical issues. I've had to deal with stress, depression and anxiety for years. It gets so bad that it agitates some other condition I can't afford to pursue, which has lead to paresthesia and temporary (so far) paralysis. And now my doctors feel I have endometriosis. However, the only way to diagnose this is through surgery -- something I've had to push off for months because I cannot afford it. I can barely afford to pay off my previous doctor's visits and trip to the ER. My health is getting worse, and there are days when I can hardly move. Who wants to employ someone who is this sick? But I can't take care of the issue until I get a job with benefits.
The daily calls from creditors is terrifying. I completely understand why people in debt become suicidal. They give you no way out. The offer no solutions to help you with your situation. I'm on unemployment now (the company I was working for went under), so I've begun to finally be able to pay off some of my debt -- very slowly. However, first I was told if I made payments I'd be fine -- but once I made payments they said my debt could still go to the courts unless I pay ALL of the overdue balance at once. They change their statements every time. There never appears to be a light at the end, no chance for any drop of hope.
We need real, concrete solutions to this debt issue. And soon.
I know I'm not that far in debt, but something must be done.
Thanks for sharing your story. I obviously agree that we need concrete solutions to the student lending issue now. By 2012 outstanding student loan debt (private and federal) will hit $1 trillion. That's a problem. A big problem.
I'm not a policy analyst, and so can't comment on how we deal with those who are currently indentured. But the public policy "fix" in the long term is simple, and will not happen for a long time.
When I went to college in 1976 in Michigan, my annual tuition at a public university was less than $1500, which I paid in cash with no loans required. I dropped out for reasons other than financial, and when I went back to school in California, my community college tuition was $5 per credit hour, and my subsequent tuition at the University of California at Berkeley in the late 80s was still well under $2000 per year, which I paid in cash with no loans required. And when I did my Ph.D. at the University of Wisconsin as an out-of-state student, I had two years covered by research grants, and was able to pay the $14,000 annual tuition for the other three years through the savings I'd amassed as a well-paid college graduate.
Public education used to be public. Our state and federal taxes supported things like libraries, public K-12 and higher education, so that they could be enjoyed by all citizens regardless of wealth. No longer. We now demand public services without any intention of taxing ourselves to have them, and the results are predictable. I just paid my income taxes last night -- I make a good living, and take only standard deductions with no fancy tax magic. And my federal income tax amounted to only 15.3% of my annual gross income. That's just wrong. And it's why these stories are as common as they are.
Herb,
Thanks so much for sharing. That is absolutely wrong, and I am afraid you're analysis is right(I have discussed similar things, and am actually working on a piece about the privatization of UW-Madison). These things - education, among many other things - is no longer regarded as important to support through public funding. Neoliberalism has triumphed, and it makes me quite concerned for the future of this country. I'd like to post your comment over at my blog - All Education Matters. Please let me know if you have objections. Thanks.
-Cryn Johannsen
Founder & Exec. Dir.
All Education Matters (http://alleducationmatters.blogspot.com)
I read the article, and it is impressive. Should these people request a forgiveness? Should government help these people in this circumstances? I am really scare about it. How we can solve this problem? Thanks,
Christine,
I am working on ways to solve the problem. It can't be done all at once, so incremental changes are the way to go. Sadly, the political climate is so severe in this country that forgiveness is not likely. Of course, the climate can change dramatically, so who knows what lies ahead. For the moment, that's off the table. That doesn't mean there aren't other ways to solve the crisis.