Today I received a small gift from God in the form of a letter from the Department of Labor. It seems that because my severance package was so large (extending into another quarter) and because I temped for three weeks I was able to continue collecting unemployment. The problem is that the income is definitely below the poverty line and would require me to live on 15% of the income I had when I was working.
My response was to cry but also just to see it as a blessing. I was headed towards getting kicked out of the program so to know that a meager income was still forthcoming is a relief. Knowing that I will essentially have to live off of less than $3 a hour a week is quite difficult.
But rather than follow my instincts and curl up in a ball, I decided to be proactive. I called my student loan provider. Like many Americans I have a pretty hefty student loan. When I decided to attend NYU I was tricked into getting a personal loan. My federal loans covered my tuition for the most part but I didn't think about it when NYU's financial aid office suggested getting a private loan to help subsidize expenses. I applied not realizing the ramifications it would have later.
Fast forwarding years later, I'm now stuck with a loan that has no mercy. Federal loans have many ways that allow you to defer on the grounds of unemployment. Private loans not so much. I had a lengthy conversation with a very knowledgeable customer service rep with my loan carrier. It seems that without having a date in which I know that money will come, I cannot defer my loan even though I have no money.
They ask two main questions. "Why don't you have money? And do you know what date you will be able to say you will have money again?" But when you are unemployed the answer is simply no. You don't know when you will have enough income to cover the bill again. You don't know what some nice employer will take a gamble on you and offer you a position.
According to the customer service rep, their former practice was to allow deferments but according to the government their practice was a bit illegal. The argument being, they were charging interest for every deferment and upon the reactivation of the loan the bill would be higher and people could not afford the bill (think sublime lending). So the government stepped in making it harder to defer the loan.
Yes, I can pause my bigger loan due to economic hardship, but nothing can help me with this loan. The only option is to lie about a possible income source and pray they approve it and that in two months you are able to pay. Or the more likely option is to default on the loan. It just amazes me that the only option for someone trying to do the right thing is default. I'm not like I'm purposefully ducking my responsibility. It's not like I changed my phone number or moved to avoid paying but there's no option other option. Lie and pray, or default, you can't even pay the loan on a graduated basis. Remember when this was an option?
So here I am, a woman that bought into the American dream. I obtained several degrees in pursuit of a higher income and here I am with $80k in student loans and an annual income of less than $10k. I tried to work with my loan provider and instead all that conversation did was make me want to scream and shake someone. Why is default the only option? It just makes no sense. I don't need a medical emergency to bankrupt me, education is doing a great job of that already. But oddly enough you can clear student loans when you file for bankruptcy. Go figure!
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