di William O. Pate II
Rarely do you hear of student loan debt driving a person into bankruptcy. With their options for income-based repayment and deferrals, student loan companies have many avenues to keep a former student paying their loans (or, at least, some of the interest on those loans) without a bankruptcy trustee getting involved.
Unfortunately, Texas Guaranteed Student Loan Corporation wasn’t one of the servicers willing to work with me a couple of years ago. While I had been sending regular payments — less than the monthly minimum but at least enough to show a good-faith effort to repay — they wanted their money. And they wanted it now. I’d also sent them — along with other creditors — a letter in September 2015 stating:
Unfortunately, Texas Guaranteed Student Loan Corporation wasn’t one of the servicers willing to work with me a couple of years ago. While I had been sending regular payments — less than the monthly minimum but at least enough to show a good-faith effort to repay — they wanted their money. And they wanted it now. I’d also sent them — along with other creditors — a letter in September 2015 stating:
To Whom It May Concern:
We acknowledge our debt to you, and we apologize for our delinquency. We have every intention of repaying you in full (with the interest and penalties you add) but cannot afford to do so at this time.
We have been unemployed for a couple of years. Misty continues to look for work while William has only recently found a position paying just over twice the federal poverty level ($15,930 for a household of two in 2015). Our income-to-debt ratio is untenable.
Our debts are so high we cannot even afford to live in our own home and are living with my family.
We are making as many payments as we can, and many do not satisfy the minimum payment required. We are attempting to show good faith, though — both in those payments and by this letter.
It is our every intent to satisfy our debts to you (and many others) as soon as possible.
Our only request is that you forgive part of our debt to you and/or offer us a lower repayment option with reasonable restrictions that will allow us to reimburse you in full.
Thank you in advance for your help.
Though I thanked them, no help came.
The Recession’s Aftermath
I started college a few years after high school. Having work experience behind me, I treated college as a job (and continued working through college) and graduated in four years flat. My total debt was north of $30,000 when I graduated in 2006. It’s still north of $30,000 — and climbing.
The Great Recession hit us hard. I was working a job as a policy analyst for a Democratic state representative for $1,250[2] a month and picking up freelance work on the side — $10 for a blog post here, $250 for two weeks of daily social media management there. My wife supported us on her six-figure salary. Until she couldn’t. We didn’t know it at the time, but she was on her way to becoming fully disabled in 2016 and, afterward, unable to work.
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