Disabled, in default, no way out
<p>I became disabled in 1999 with a year to go before graduating with two science degrees and a 3.8. Having transferred from community college to a public university and working 30 - 40 hours per week, my loans were pretty minimal. In-state tuition was a lot lower then.
My health insurance company decided that none of the hospitalization, surgical or other major medical costs were covered. I didn’t qualify for unemployment disability because my work-study jobs were classified as financial aid and not employment. No one was at fault; had it been a drunk driver or work-related, I could have sued or gotten workers’ comp.
When it was clear that my disability would be permanent, I notified my school and applied for Social Security Disability Insurance. With no income and a family that was barely scraping by before, plus tens of thousands in medical bills, significant ongoing medical costs and no insurance, there was no way I could pay on my loans. When I applied for relief I was told that I needed to send in copies of the approval from Social Security. The problem? Social Security can take eighteen months to approve applications. My case was obvious enough that I got through in nine, but I have spoken to a woman who waited two years.
Before the six-month grace period had expired, I called the loan company (a contractor working with the lender, Bank of America) and asked about a deferment. I could send a doctor’s note, copies of hospital records, a letter from the admins at the college. None of these qualified me. A copy of my Social Security application wasn’t any good until it was approved. Had I been able to get unemployment or state disability, those papers would have given me a temporary stay, but I did not. Because my previous income was inflated by my loans and grants - which had gone straight to the university - my applications for emergency assistance programs had been denied.
Before the phone was cut off, the harassment from collectors began. They were abusive and demeaning, implying at one turn that I was a deadbeat who deserved my misfortune and at the next that I could just make money magically appear. They called my father, who was already devastated that he had so little to share with his suddenly handicapped child, and insinuated that he was on the hook for my loans. (He wasn’t. I was an adult student and had been emancipated as a minor anyway).
When I explained why I could not make the minimum payment, one agent told me, “you should have thought of that before you applied for the loan.” How was this supposed to change my decision making? That is why I had had health insurance, and one of the reasons why I was trying to get an education.
I became homeless. I slept on friends’ and relatives’ floors, finally got Social Security and stable housing. When I contacted the note holder I was told that the minimum payment was $350 - nearly half of my $800 per month disability check. Upon default the loans had been paid by the Department of Education, bundled with other defaulted loans and sold off to a debt collector for pennies. They had doubled the principal with penalties and fees. They are also exempt from the relief process that binds the original lender through the Federal guarantee, so I could not apply to clear them once I had proper documentation. The company was free to decide how many regular payments bring a loan into good standing. When I pressed one agent for a number, she finally admitted that I should not to expect them to be reclassified until they were fully paid off.
Had I been able to return to school part-time, I might have been able to finish my degrees and qualify for a job that would have allowed me to support myself while working within my limitations (my work experience is in poorly-paid manual work that I can no longer do). The university staff were very sympathetic but could neither allow me to return nor release my transcripts while I had loans in default. I did find several incredibly generous instructors who allowed me to audit classes - and even encouraged me to participate fully and held onto my grades in the hope of turning them in for credit once I could enroll again - but eventually it became too painful to pursue something I would never get to use.
Every few years my loans get flipped and I get dunning calls from some new company that tries to imply that I owe them twice what the last bunch of scammers claimed, which is double the bill from the one before. They are liars. I owe the Federal government about four thousand dollars, which I would be happy to repay either at payments of $50 per month or once I can get my degrees and a job.
These lowlifes threaten to garnishee my Social Security and there isn’t a damn thing I can do about it. Even if I had the money I wouldn’t give it to such sleazeballs.
