“Dear Steve,
I’ve been paying my Sallie Mae Loan, after borrowing the money to go to film school. The education was great, but the film industry supports freelancers exclusively almost, at least when it comes to Editors or Visual Effects people. If you noticed, even the special effects scandal at the Oscars with the “Rhythm & Hues” company going out of business. Even though they were employed on multiple $100M+ movies, they were given a fraction of the budget.
So it’s been really hard finding full-time work, even the most successful people are freelancers. They can be laid off anytime, and replaced instantly. I work on films and behind the scenes, but each project pays $500-1000 per project. Some of these projects require months of follow-up service and never seem to end.
So my Sallie Mae loan is $60,000 + 8.5% interest which is about $700/month in payments. That is basically every penny I make some times. My parents can’t even afford the loans, but help out by covering half sometimes. I simply don’t have enough money to pay rent and my loans at the same time. It’s literally impossible unless I take on more and more jobs simultaneously, which are difficult when the clients require 24/7 service till the film is done. Sometimes they watch over your shoulder till 5am!
My question is this, if finding full-time employment is considered a rarity in my industry and being partially employed and only making <$20,000 a year jumping from film to film, would I be eligible for bankruptcy? Tell me if I'm wrong, but I have $60,000 plus 8.5% interest in Sallie Mae Loans, and even though my parents co-signed they cannot afford the payments either. So paying off my loans would take 7+ years, and my debt would leave me with terrible credit till it's paid off. Which honestly, I can't say if I will be able to afford to live and keep up with the coming change in technology putting me out of work. I would need to learn new editing programs and workflows, but I can learn that from home.
If I file for bankruptcy I could essentially wipe my debt clean or at least partially and put that money into my retirement and healthcare. My credit would be ruined for 7 years, like it would be anyways. The only difference is that my money can be spent on getting on my feet and starting my own business full-time and not have to blow entire checks on interest filled loans. My industry doesn't check into credit scores when they hire freelancers either, they just look at my past work and decide on my portfolio.
I just want to know, what should I do?
Thank you for taking the time to read this.
-Harvey"
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Dear Harvey,
Until Congress passes new laws to make private student loan debt dischargeable again in bankruptcy you are student with whatever options Sallie Mae offers. However, if any of your loans a government backed student loans, you’ve got some good options there. See The Ultimate Guide to Dealing With Student Loans You Can’t Afford
Sign the petition to pass the Fairness for Struggling Students Act of 2013 – Click to Tweet
I’d love to tell you your story is unique, it’s not. In my day I’ve heard very similar stories from all people involved in Hollywood, including actors. I even had a client once that was an Oscar winner and was struggling.
If Sallie Mae won’t budge and you have no federal student loans to consolidate then your only other choice is to file bankruptcy if you have any other debt to make room to make your student loan payments.
Please post your responses and follow-up messages to me on this in the comments section below.
