Student Loan Horror Stories: What It Feels Like to Be $100,000 in Debt

Posted on October 12, 2015 at 12:00pm by
Will PSLF survive?

An estimated 1.1 million Americans have student loan balances of $100,000 or greater, hampering their ability to buy a home, marry and enjoy other luxuries that were once associated with the American Dream. Many students in this situation attended private universities, out-of-state schools, for-profit colleges or obtained graduate degrees.

In a series of interviews with The Guardian, several college graduates discussed their lives under the crushing weight of $100,000 in student loans. One of the graduates interviewed has $100,000 in student loans but makes $42,000 a year. The graduate shared how 50 percent of her paycheck went towards monthly student loan payments, and how she regularly chose between paying health insurance and fixing her car. To makes ends meet, she regularly donates plasma.

In 2012, the Consumer Financial Protection Bureau (CFPB) asked graduates with over $100,000 in loans to go online and discuss how student debt had affected their lives. The CFPB’s online message board became filled with stories of struggle, hopelessness and anger.

One of the graduates who participated described his life with $135,000 in private and federal student loans. Although his loans started at $80,000, high interest rates and fees ballooned the balance to $135,000. He describes his future as living in a low-rate apartment and driving a 15-year-old car for the rest of his life.

Federal Student Loans are Less Horrifying

For graduates with federal student loans, repayment options such as the income-based repayment plan can limit monthly payments. Lower monthly payments make paying rent, fixing vehicles and paying health insurance bills much easier.

Students with private loans appear stuck with an unpayable financial burden that could affect their ability to enjoy life for years to come. The nightmare created by private student debt has led some lawmakers to call for restored bankruptcy protections on student loans.

The Sader Law Firm Kansas City Bankruptcy Attorneys