Suicide Over Student Loans. Tragic But Understandable.

It seems more people are contacting me these days who look at suicide as a way out of primarily private student loan debt. I’m sure you have the same visceral reaction as I do and feel everyone needs to be talked off the ledge. But in the hard light of day, considering suicide as a way to deal with student loans isn’t an uncommonly considered solution in the face of no other good solution. For the record, I’m not endorsing suicide as a way out, just acknowledging what others are feeling.

Let’s look at some of the recent reader feedback on this. Take the new lawyer with $100,000 in student loan debts who can’t find a job paying more than $40,000 a year. Her private student loans only have one real option, forbearance / deferment. Under that approach the payments are waived but the interest continues to make the balance due larger. The temporary respite from current loan payments only makes the repayment problem worse in the future. “I guess my question is whether I should try anything else before committing suicide,” the reader asks.

John said, “My student loans are almost $42,000 dollars. I frequently think about suicide; thinking about my son is the only thing that has so far kept me from committing suicide.”

Michael said, “Suicide as the option to get out. Do not want to work the rest of life thinking about this debt. If I cannot be free, I would prefer to be dead. I am going to die anyway.”

Student loan debt now exceeds the total owed in credit card debt. In 2005 under what creditors heavily lobbied as bankruptcy reform, the bankruptcy law was changed to not allow private student loans to be discharged in a consumer bankruptcy.

But until recently, private student loan lenders were dishing out loans like free cheese. There was significantly less regard to the ability to repay based on traditional lending criteria. Just look at the drop in acceptable credit scores approved after the bankruptcy reform bill went into force in 2005. “Hey, Bob they can’t get out of them anymore, lend away.”

Or how about we look at the cross section of private student loans across all ranges of credit scores. If lending was based on risk alone, the years 2005-2008 should not be relatively flat. Since 2008, lending standards in the private student loan market have tightened. Lenders are not able to easily sell off the student loans they originate, so they have more “skin in the game” when it comes to the borrower’s ability to repay. More skin equals more reasonable lending criteria.

And once attention was placed on the student borrower ability to repay in 2009, look what happened with loan volume that required a co-signer. It rockets up.

And which types of programs are co-signes on the hook for? Take a look.

It’s not the students that are now trapped in this dark pit of student loan debt. The co-signers are being dragged under as well.

See also  Student Debt Kills Dreams

Let’s turn back to the underlying problem with the dead end private student loans and why some consider suicide as a way out.

As the Consumer Financial Protection Bureau has noted, private student loan lenders set people up to fail with debt that can’t be discharged in bankruptcy. The private student loan lenders pushed students into lives of terminal debt slavery without much apparent regard for the borrowers.

Recent CFPB and Department of Education research found:

  • Most private loans have few options for payment modification or forbearance. Most private loans have variable rates, making estimates about future debt payments difficult. Prior to 2010, federal law did not require a disclosure showing the actual interest rate on a borrower’s loan until after the lender documented the loan, approved the credit, and readied the check for mailing.
  • Some lenders bypassed school financial aid offices and marketed loans directly to students. As a result, in many cases, the school could not review the borrower’s financial need, compare it to the loan amount, or even verify that the borrower was enrolled. Many lenders also lowered the minimum credit score required to receive a private student loan so that they could originate and then sell off more loans. Many students did not understand the differences and features between federal and private loans. They ended up using riskier private loans before exhausting their safer federal options.
  • Defaults on private student loans have increased since the financial crisis. Based on the CFPB’s sample, there are now over $8.1 billion in defaulted private loans, representing more than 850,000 distinct loans. Congress amended the bankruptcy code in 2005 to make it tougher to discharge private student loans. Borrowers reported their lenders were unable or unwilling to modify or adjust repayment terms.

Faced with loans that may never have been appropriate or affordable, an unwillingness for lenders to make reasonable repayment adjustments, and the non-dischargeablility of these private student loans, it’s easy to see why some people feel trapped and without hope. You can certainly understand why some consider suicide as their only way out.

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Maybe there is some hope for those considering suicide as a reasonable way out of private student loan debt. “Our findings reveal that students were yet another group of consumers that were hurt by the boom and bust of the financial crisis,” said CFPB Director Richard Cordray. “Too many student loan borrowers are struggling to pay off private student loans that they did not understand and cannot afford. Moving forward, we must do our best to leave the next generation in a better place than we are today, rather than buried under a mountain of debt.”

“Subprime-style lending went to college and now students are paying the price,” said U.S. Education Secretary Arne Duncan. Potentially, some help may be on the way.

If you are as concerned as I am about this situation I invite you to sign this Change.org petition for meaningful private student loan reform.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.


Damon Day - Pro Debt Coach

18 thoughts on “Suicide Over Student Loans. Tragic But Understandable.”

  1. suicide is the only way out of hopeless debt slavery. if you’ve already taken the loans just go ahead and do it. if you are thinking about going to college on debt just waste away in the gutter instead – it’s more financially responsible.

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  2. (I apologize in advance this comment is so long, but I have no where else to go…) I’m only coming upon this article in 2015 after doing an exhaustive search on the effects of insurmountable student debt on graduates’ lives. I suppose I shouldn’t be shocked that our country finds itself facing some of the most volatile debt (student loans) all while the “experts” keep pronouncing college to be a financially sage investment. Money is, after all, what “it” is all about, and colleges are, thanks to their tactics, largely wealthy. The experience of countless graduates posting about being unemployed or underemployed, it seems, isn’t being taken into consideration. Big (scholastic) Business keeps promulgating the myth of the value of a degree, when more and more of us have degrees, while most jobs require experience–and very specific experience, at that, and yet no one is training us, or is willing to allow us to acquire on-the-job experience. The competition for the very few jobs available is unreasonable, and keeps getting worse. Employers admit they can’t even look at the volume of resumes they get for a single job posting. But so long as wealthy politicians’ and corporate CEOs’ children are safe, who the hell cares about the rest of us?

    I graduate from two Ivy League institutions with STEM degrees. Biggest mistake of my life. I’m heavily in debt, and cannot even get a minimum-wage lab assistantship. I’ve even offered my services FREE to labs only to be turned down. Jobs are awarded to people who KNOW those on company/university lab teams. Connections are imperative. And worse, being unemployed for more than 30 days raises a red flag with future employers. So you take whatever minimum wage job you can find unrelated to your field. But when you apply for a post in your field, you need references. And when your “current employment” is in minimum-wage retail, you can kiss a real chance at a job in your field goodbye, regardless the “expert” counsel that any job is worthwhile and better than no job.

    Before I went back to school, I interviewed heads of programs at 22 universities, asking specific questions about employment post-grad. Universities aren’t required to keep any figures to that effect, which gives administrators an incentive to tell you what they believe you want to hear–that demand in the field you’re considering is consistently growing. You do your due diligence, corroborating this online. Again, the “experts” publish articles about job growth in the field you’re considering, so you take on loans in hopes of getting a better job to pay off your debt. Two years later, everyone else has the same graduate degrees, you still have no experience (you have to keep your grades up at all costs, and working in a PhD lab is a full-time job in itself), competition is fiercer than ever, jobs have been outsourced (even in STEM), and you’re also competing with visa-holding foreign workers in the US.

    I’m not stupid enough to make this confession using my real name, but I am very close to committing suicide. My parents are already dead, and I have no kids or other human/pet responsibilities. I’ve deferred my loans so many times–and each time feel like a POS for having to admit I’m still a leech & cannot afford the INTEREST on my loans, let alone the principal. I can NEVER pay these loans off. I traded my potential for freedom for college degrees and a lifetime of slave labor. I wish I’d known about the trades. No one ever told me about them. Every single advisor I ever knew pushed me toward college. My single parent pushed me toward college. Though I didn’t go to MIT, I got accepted and attended a pre-frosh event at which one of the university administrators practically guaranteed us lifetime professional security if we successfully graduated. At 17 you’re doing exactly what “the experts” are telling you to, and what they keep feeding you for the next eight years—hope that borders on a guarantee. But there’s nothing besides debt and shame at the end of that tunnel for many of us. And now I hear it was my responsibility to know. Right.

    To the US Academy, graduates’ blood is on your hands—yours and all your minions’, in their infinitely variable guises (the loan officers and administrators, high school advisors who push-push-push college, university faculty and administrators who ply with spoken promises of a far better tomorrow post-graduation, and the online “experts” who keep parroting the hackneyed, specious line that college grads earn more (that, I’m confident, is an illusion of the social backgrounds of those who’re employed, as the immensely wealthy father of a good friend of mine pointed out when he recently commented when I shared with him about the job insecurity-college degree paradox that he’d simply “manage my children’s trust funds and get them placed at friends’ companies.” Lucky them; good that they were born to a wealthy family.).

    And judging from the vitriol of so many commenters’ judgmental assertions about indebted college graduates, things won’t get better. So since I can’t defer again, and my minimum-wage retail paycheck won’t cover my rent (four unsuccessful PhD grads sharing a two-bedroom in the only reasonably safe neighborhood we can afford–more than two hours’ drive each way from the city, where work is) and transportation bill, let alone my educational loan payments, I see no choice but to go ahead with suicide. Thankfully, there are websites that offer the resources I’ll need.

    And lest anyone think otherwise, I was a successful student with excellent test scores and letters of recommendation. Nor did I study puppeteering. All of my degrees are in STEM fields. The competition for decent wages is just too fierce. And my local community college wants over $15,000 for a 2-year certificate in welding. Yeah right.

    There’s virtually no sector of American culture I hate more than the university. College–the Ivy League–destroyed my life. But I’m poor, from a poor (and now dead) family, so my experience just doesn’t matter. Thank you, USA. I gave you my youth and the best of my mind and hands, and you gave me slavery and a death sentence.

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  3. As I type this I am very close to suicide.

    Unlike many, I did get my degrees – a bachelors, masters, and doctorate – in clinical psychology no less (I needed a doctorate to become a psychologist – and I felt it was good career choice – and I’ve always loved helping people). Grad school was very expensive, and I thought long and hard before taking out those student loans – but I was confident I would be able to pay them off over time as I grew my private practice. I was my education as an investment in my future – now it’s a death sentence.

    Due to a 3-year bout of severe depression during my residency, I didn’t get licensed – that was death to my career. I tried to get back on track but ran into obstacle after obstacle. I finally gave up and left my field – only to find that my degrees and work experience (in mental health) were essentially useless in the marketplace. Life rapidly began to go down hill and my loans began to default (I’d always been very responsible with money, but had to use credit cards to survive on several occasions).

    Fast forward 17 years. My student loans have ballooned to over $250,000 (and they just keep growing and growing). I make a meager income doing freelance work, but depression and anxiety make it very difficult for me to be productive, so my income isn’t reliable. I stopped dating years ago because of my debt – I was ashamed and also didn’t want it to impact someone else. So I am completely alone. My dreams of getting married, having children (too old now), having a nice home, and a good career – all normal things – are dead.

    I’m in my 50s and have no future. None. My credit is destroyed. I live in a very tiny apartment and worry constantly about losing my home. I have no hope of ever even making a dent in these loans, let alone paying them off.

    I already made a very serious (and almost successful) suicide attempt 5 years ago – because I’m just worn out. Not a day goes by that I don’t wish I had succeeded back then. Three days ago I received a summons – I’m being sued by one of my student loan creditors. I can’t afford an attorney, and I’m scared to death. I knew this would eventually happen. I’m also deep in tax debt as well, so have that black cloud over me as well.

    So, Matt (and anyone else who says suicide is such an unacceptable response to a completely UNSOLVABLE and life-crushing problem like this), people CAN’T get out of this situation. YES, I borrowed the money. I didn’t borrow it foolishly or thoughtlessly. Stupid me for not having a crystal ball to see that depression would derail my career. Stupid me for not marrying someone with money who could support me so the little I make could go towards student loan payments (at the tune of well over $1500 a month!!!). Stupid me for wanting to better my life and have a career helping others. Stupid, stupid me!!!!!!! But, if I had gone on shopping sprees or trips and ran up my credit cards for fun, or bought a house I couldn’t afford – I could just declare bankruptcy and at least get a fresh start. Trust me, I’d take 10 years of damaged credit over this nightmare any day.

    But those of us with student loans – who took them out responsibly (or so we thought – after all, when I was growing up education was EVERYTHING) – have no way out. And they just keep growing – no matter what.

    This has ruined my life. I have no future. None. Retirement? Can’t ever do that. I can’t afford health insurance – so god forbid I get really sick or seriously injured!!!

    So, yes, suicide is becoming the ONLY solution I can see. Because I don’t have any fight left in me. And there is nothing about my life that is worthwhile anymore.

    Maybe the laws will change someday – but it will be far too late for me and many others.

    If only I could turn back the clock and never made the decision to become a psychologist….

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