Get Out of Debt Guy - Steve Rhode

Should Colleges and Universities Be Held Accountable for Private Student Loans They Pushed?


“Dear Steve,

I’m 28 and graduated from a private college in 2007 with a Bachelor’s Degree in English. Im about 80k in debt and making $9.25 an hour as a daycare teacher. I am married; my husband makes $11.00 an hour. We have a two year old, rent a house, in the hood, for $600 a month, make too much for government assistance and drive a 20 year old car (we only have one car). Sallie Mae will mot lower my payments, Great Lakes and Keybank are about to seize my wages. I sd ont know what to do. We live paycheck to paycheck, we are scraping by to make ends meet. Ive looked into Bankrupcy, but have learned it doesnt erase student loans. I see no end in sight and feel overwhelmed by these loans. Sallie Mae and Key Bank are the worst and wont let me do income sendsitive repayments and even had the audacity to tell me I should cut back on groceries for my family. They feel I dhould be paying 250 a month. If I were making the minimum payments on my loans I d be paying around 600-700 a month. We only bring in 2400 a month, we just cant afford that!

Any suggestions?


Dear Jeannie,

If these are private student loans and not government backed student loans your options are limited unfortunately. Private student loan debt is a generation robber. It saddles people with debt that can’t be discharged in bankruptcy, can add a huge collection penalty and can administratively garnish your wages without going to court. As far as I’m concerned it was always a trap.

It would be interesting to see the colleges that pushed private student loans as a way to sell classes and generate income, be responsible for this mess they profited from and helped to create.

If your loans are government backed then you have some good options including possible loan forgiveness and the Income Based Repayment (IBR) program.

For now, private student loan debt is a tragedy without a solution.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!
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