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I Was the Biggest Jerk to Get So Buried in Student Loans

Written by Steve Rhode

“Dear Steve,

I have $130,000 in private student loans from Wells Fargo, Sallie Mae, Citibank and Discover. The minimum monthly payment is $1,595. Since graduating in 2011 with a liberal arts bachelor’s degree, I’ve made monthly minimums through myriad part time jobs, usually several at once, odd jobs and temporary positions through a staffing agency–never finding full time work and nothing within a million miles of my degree field.

I lost the temp job I did have the Friday before Christmas and the loan companies are already escalating contact with me and my family (both parents are cosigners because I was the biggest/STUPIDEST jerk alive in 2008 and I wanted to go to a private liberal arts college.)

I called and begged for mercy beforehand, but there is no mercy to be had. No legal recourse, excellent or otherwise: as of December 28th, 2014 I’ve stopped paying my student loans altogether.

If I were writing a plaintiff assessment it would look like this:

I) I have made good faith efforts to pay my educational loan obligations. ($1,595 a month)

II) I will suffer undue hardship if compelled to pay my educational loan obligations without renegotiation of terms. (It would require approximately seventy-two hours worked a week at minimum wage to maintain–which is the only wage available to me even with an undergraduate degree, gorgeous face, ten years’ experience in customer service and sales, and a natural gift for inbound marketing and social media management. And stump grinding. I rocked my temporary job as a stump grinder.)

III) Had my parents not cosigned, I would not have been able to obtain the loans.

IV) I have been unable to find a job with my degree.

V) The monthly loan payments required are excessive. Again, $1,595 a month on $130,000.

VI) Since graduating, I have worked low paying jobs ranging from $7.49 to $14.00 per hour.

VII) My financial situation is not likely to improve.

IIX) I have no accumulated wealth or assets of any value. Or any assets at all.

IX) These companies have consistently exhibited cruelty, excessive force, and indifference to the extreme of laughing in my face and hanging up on requests for reduction of interest or other reduction of terms.

X) These same companies already call up to seven times a day (documentation available) and that is the tip of the iceberg regarding their criminal, inhumane business practices designed to eat our society’s young. One example: My minimum monthly payment to Wells Fargo is $785. The late fee? $250. Because they assign an individual fee to each loan number (essentially a different loan number for each semester) and it totals to $250.

XI) I took out excess loans not for educational purposes. (Travel, books unrelated to my degree field, luxurious off campus housing)This is highly relevant, if I understand my research correctly.

I’ve met with multiple lawyers in a hunt for legal precedent to take to my private student loan companies to encourage them to establish a fair repayment plan with me; this tactic has failed.

I don’t want a hand out. I don’t want a miracle. I don’t even want a real second chance…I just want some kind of chance at all to repay my debt and live some semblance of a happy life.

I would like to learn your opinion on what my course of action should be.

Thank you very much for your time and attention.

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Dear Sara,

When they invent the time machine we can use to go back and change the past, let’s do it. Till then, it is what it is. Thankfully you have shared your experience and hopefully someone beginning to turn on the path you took will see this and stop to contemplate.

I think your assessment is right on target.

The broken logic in this situation is what happens when fresh young kids desperately want to go to college. There is no cost-benefit analysis and so desired careers are pursued without any thought of the cost of that education. Schools make access to funds available like crack because they want to sell butts in seats. Parents want to help their kids get an education so instead of saying it does not make sense, they cosign.

It is all unfortunate and tragic but try to explain that to an eager 18-year-old. When I try, people look at me like I’m an idiot. What do you mean I shouldn’t go to college? What they fail to hear is the suggestion that maybe a couple years at a less expensive community college is a good way to reduce costs.

Your situation reminds me of another, the only difference is the cosigners.

2:12-ap-00039 – Opp

Plaintiff/Debtor attended The Art Institutes in Philadelphia from 2001 to 2003 and subsequently transferred to the University of the Arts (“U of A”) from 2004 to 2007 where she received a degree in Bachelor of Fine Arts in Graphic Design.

Since graduating from the U of A, she has worked a variety of low paying jobs ranging from $10.00 an hour to $18.00 an hour.

Plaintiff/Debtor currently is employed as a Graphics Arts Associate earning approximately $41,000.00 and will most likely earn this approximate amount for the significant portion of her career.

Plaintiff/Debtor’s present indebtedness on all of her student loans with the Defendants is approximately $185,000.00.

It is unlikely that Plaintiff/Debtor will be in a position to repay these loans during the duration of the repayment period. Although her financial position has improved in the few years since she incurred the loan obligations and based on the earning potential in her career field, it seems highly unlikely that her financial situation will improve to a level where she could afford to repay her loan obligation.


  • National Collegiate Student Loan Trust
    RBS Citizen student loan $45,377 – Discharged
    Defendant National Collegiate student loan $7,162 – Discharged

  • Plaintiff alleges, and National Collegiate stipulates, that repayment of the Loan would cause an undue hardship on her, the parties now stipulate:
  • Plaintiff’s financial condition is not likely to improve.
  • Plaintiff has made a good faith effort to repay the Loan.
  • Based on the facts above, Plaintiff and National Collegiate stipulate that requiring
    Plaintiff to repay the Loan would impose an undue hardship on the Plaintiff, and the Loan is therefore dischargeable under 11 U.S.C. § 523(a)(8), only as to Plaintiff. – Source
  • Sallie Mae owed $94,140 and reduces debt to $60,000 at 3% interest payable at $284.53 for 300 months. – Source
  • RBS Citizens $37,000 is not dischargeable but will be repaid at 0% interest and at $75 per month until the $37,000 has been paid. – Source
READ  Single Mother Wins Discharge of Her Federal Student Loans in Bankruptcy. Government Appeals.

And then there is the issue you noted that the funds were not all used for a qualified education expense. Your research is on target, that part of the loans is exposed to discharge in bankruptcy. Read These Private Student Loans Can Be Easily Discharged in Bankruptcy. The section of that article you want to pay attention to is “But Don’t Lose Hope Yet.”

Settle the Student Loans?

So the case above seems to mirror your situation and it might be worth discussing it with a local bankruptcy attorney. While the bankruptcy proceeding did not eliminate the debt, it did adjust the terms to something more reasonable and that’s a win in my book.

The issues that could derail this is the fact your parents lovingly cosigned for the debt. When they cosigned they agreed to be 100% responsible for the debt if you did not pay. With your stopping payments I would expect the lenders to start to pursue them, shortly.

One option that has been somewhat successful is to settle the student loans. This course of action is not without risk and pain though.

I’ve only seen student loan holders offer to settle the debt for about 50% when people are significantly past due in the 120 day range. They tend to offer these settlements prior to the loans charging-off at 180 days. Charge-off is an accounting function and has nothing to do with your obligation for the loan.

When the loans go delinquent you could be sued, fees and penalties will be added and you will need access to funds to quickly settle the debts if the offers are made. Let’s not forget the delinquency will be reported on the credit report.

There is no doubt your parents would need to participate in this since they are neck deep, or higher, already. I would imagine they would have to be the source of your settlement funds. Regardless, you need a coordinated approach to this with their consent. Anything you do will impact them.

The settlement route can be a difficult emotional road to go alone. Lenders know how to push your buttons and you have no experience dealing with these sorts of things. You can hunt around for someone to help you with experience in this area or consider contacting my friend, Damon Day. He is a talented debt coach who coaches people and holds their hand through tough spots. You are in a tough spot.

Armed with the information above it might be making a second effort to keep up the hunt for a bankruptcy attorney who is willing to consider the information above and take a shot. I find many bankruptcy attorneys are afraid to take on these difficult cases. They can be expensive and the attorneys are inexperienced in dealing with such issues. But because the situation is difficult, does not mean it is impossible.

Keep fighting.

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


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.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • A Chapter 13 bankruptcy is a legal option that you should discuss with a bankruptcy attorney who is licensed in your state. But a Chapter 13 bankruptcy does not eliminate the loans nor stop you from paying the percentage of your income the court feels is available for distribution. I’m not sure that will leave you anything to save.

    Participating in a Chapter 13 bankruptcy will stop collection from you, but not necessarily your parents if the creditors petition the court to lift the cosigner stay.

    But keep in mind the delay in making agreed payments on the student loans will explode the balances over the years. “However, keep in mind that interest will continue to accrue on your student loans during bankruptcy and you will still be required to pay them back after your case is closed.” –

    For those that just need a bit of time to prepare for an alternative solution, a Chapter 13 has a lot of benefits. It’s even possible to roll from one Chapter 13 bankruptcy into another and keep the creditor collection activity silent for decades.

    However the downside is all of your income will be distributed according to court approval and it is not a permanent solution.

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