The Great College Loan Swindle

from Rolling Stone

On a wind-swept, frigid night in February 2009, a 37-year-old schoolteacher named Scott Nailor parked his rusted ’92 Toyota Tercel in the parking lot of a Fireside Inn in Auburn, Maine. He picked this spot to have a final reckoning with himself. He was going to end his life.

Beaten down after more than a decade of struggle with student debt, after years of taking false doors and slipping into various puddles of bureaucratic quicksand, he was giving up the fight. “This is it, I’m done,” he remembers thinking. “I sat there and just sort of felt like I’m going to take my life. I’m going to find a way to park this car in the garage, with it running or whatever.”

Nailor’s problems began at 19 years old, when he borrowed for tuition so that he could pursue a bachelor’s degree at the University of Southern Maine. He graduated summa cum laude four years later and immediately got a job in his field, as an English teacher.

But he graduated with $35,000 in debt, a big hill to climb on a part-time teacher’s $18,000 salary. He struggled with payments, and he and his wife then consolidated their student debt, which soon totaled more than $50,000. They declared bankruptcy and defaulted on the loans. From there he found himself in a loan “rehabilitation” program that added to his overall balance. “That’s when the noose began to tighten,” he says.

The collectors called day and night, at work and at home. “In the middle of class too, while I was teaching,” he says. He ended up in another rehabilitation program that put him on a road toward an essentially endless cycle of rising payments. Today, he pays $471 a month toward “rehabilitation,” and, like countless other borrowers, he pays nothing at all toward his real debt, which he now calculates would cost more than $100,000 to extinguish. “Not one dollar of it goes to principal,” says Nailor. “I will never be able to pay it off. My only hope to escape from this crushing debt is to die.”

After repeated phone calls with lending agencies about his ever-rising interest payments, Nailor now believes things will only get worse with time. “At this rate, I may easily break $1 million in debt before I retire from teaching,” he says.

Nailor had more than once reached the stage in his thoughts where he was thinking about how to physically pull off his suicide. “I’d been there before, that just was the worst of it,” he says. “It scared me, bad.”

He had a young son and a younger daughter, but Nailor had been so broken by the experience of financial failure that he managed to convince himself they would be better off without him. What saved him is that he called his wife to say goodbye. “I don’t know why I called my wife. I’m glad I did,” he says. “I just wanted her or someone to tell me to pick it up, keep fighting, it’s going to be all right. And she did.”

From that moment, Nailor managed to focus on his family. Still, the core problem – the spiraling debt that has taken over his life, as it has for millions of other Americans – remains.

Horror stories about student debt are nothing new. But this school year marks a considerable worsening of a tale that ought to have been a national emergency years ago. The government in charge of regulating this mess is now filled with predatory monsters who have extensive ties to the exploitative for-profit education industry – from Donald Trump himself to Education Secretary Betsy DeVos, who sets much of the federal loan policy, to Julian Schmoke, onetime dean of the infamous DeVry University, whom Trump appointed to police fraud in education.

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6 Comments

  1. It is no secret that one of the biggest fears that my generation is facing is student debt. With the skyrocketing rates of tuition, many students are being forced to take out loans in order to attend universities. The fact that in some colleges, including Rider University, an average student will be charged over $200,000 over the next four years is absurd. Of this amount, students these days will be LUCKY if they only had to take out loans to cover HALF that amount. It is unfathomable that students have to pay this much for a college education. This also does not include interest, which can skyrocket how much is owed in the repayment of loans in the long run. What the Trump Administration is doing in regards to education presents a scary situation to lower/middle class families: Trump wants to decrease federal spending on the Pell Grant system by $3.9 trillion. For years, this system has been a source of financial survival for students from lower class families. By cutting this, it is making options for families more difficult when sending their children to colleges. To complicate matters, according to the article, the appointment of Betsy DeVos as Secretary of Education and Julian Schmoke as an education policy advisor, will make obtaining the already slashed funds even harder for students. Many of them grew up in affluent families, where they have no first-hand experience with having to take out a college loan.
    In my generation, students are no longer focused on the pressure of going to school, graduating, and finding a job. They now have the burden of figuring out of they will pay their loans. There have been many examples of how student loans have affected the people in my personal life. Whenever I am with my friends or classmates, at some point the conversation of student loans will come up. Most of the time we are very serious in our conversations. Other times, we crack very dark jokes about it. For instance, I would walk up to my friend and say “Well, time to sign my life away” when I have to contact my financial aid office or bank.
    In my personal life, I have seen the devastation student debt can cause. One of my very first friends I made when I was a freshmen started college at age 20. He came from a family that had no means to support him financially in college. For the past two years, he had worked 3 part-time jobs at a time in order to save money for college. Even with the 3 jobs, and the money he saved, he still needed to have a loan. When he attended school, he was only able to afford one year of college. Even with that, he dropped out after the first semester. When I questioned him, he broke down and revealed to me that he dropped out because of his fear of drowning himself into debt. Even today, when I recently came across him, he told me that he continued working 3 jobs just TO PAY THE LOAN. This extremely angered me for the fact that he only went to college for one semester, yet he is still paying off a student loan from 3 years ago.
    Another example will be one of my relatives. For him, it took him 5 years to complete college and, in between found out he had ADHD. For him, the loans have mounted for him. He has told me that he will be paying upwards of $160,000 before interest on all loans in his life. He has fears that with this loan, he can never be a homeowner, have a family, etc. One of the things any of these student loan studies have revealed was that they only measure students who have completed a 2-year or 4-year program within that timeframe. In this country, more than half of all college students will not finish their degree within 4-years. Meaning that they will have to pay additional tuition and more loans when they

  2. The article is about a man named Scott Nailor, he’s a teacher who is in debt. After taking a loan to attend college, he graduated with a debt of $35,000. After he became a teacher, he earned a salary of $18,000 per year. He struggled with payments monthly, and him and his wife consolidate their student debts, which added up to more than $50,000. After, he started attending rehabilitation programs that added more to the debt, and he ended up starting to pay them off and not his student loans. The collectors started to be more on top, and called him consistently. With Scott paying $471 per month towards the rehabilitation programs, he believed that his debts with be more than that of a hundred thousand. Eventually, he got so sick of it, and was contemplated suicide. He convinced himself that leaving his song and young daughter was the best thing to do, that they would be better off without him. However, his wife managed to change his mind and told him to keep fighting.
    Student loans are a big deal. Since 2007, the total student tbt has tripled with people with loans land to 44 million from 28 million dollars. In 2015, statistics show that about 70% of college seniors graduate with student debt, and their average tab triples to $30,100. When it comes to student loans, every penny counts. It shows that students who graduate with excessive debt are about 10% more likely to be delayed in their personal life, such as getting married, having children, or even buying their own house. The debt also has an impact on their employment plans, making them work in jobs that they are not entirely practiced or comfortable in, and sometimes even working more than one job, and working more hours than preferred.
    These results make people think about whether going to college is worth it then, if they end up with so much debt, what’s the point? This unfortunately means that they don’t have jobs that pay good money, because most jobs required a degree. It is important to realize the impact that student loans have over the students, educationally, financially, and personally.

  3. Student loans have skyrocketed in the past several years due to the increasing costs of tuition. After reading this article, I began being anxious over my own student loans and went over my scholarship letter agreement along with the debt I took out for this school year. I figured out that for the first year of college that I am debt free, which is a huge relieve after learning how a small debt can grow astronomically. For instance, Veronica Martish, who had student loans amounting to $8,000 and graduated from a community college, but ended up paying $63,000 throughout her life and still has $27,000 to go. There is nothing wrong with a community college education; however, it is not worth $90,000. The student loan problem is present today because many young people are unaware of the effects interest can have on a loan. In addition, many students look at schools in terms of reputation rather than whether they can affordability. Therefore, students do not look over the interest rate when they are accepting a student loan because they need the money right away to attend school. I think that students need to be better informed before entering college, so that they can be prepared for what will be awaiting for them after graduation.
    My parents helped me in terms of paying a part of my tuition, understand student loans, and learn the importance of hard work. When I was looking at colleges my junior year of high school, my parents informed me that they would only give me a certain amount a year and that I would have to take out loans or use my savings to come up with the rest. Keeping that in mind, I did not look at expensive schools, but rather schools that were known for their scholarship money. I ultimately choose Seton Hall because they gave me a hefty scholarship and because it is a half an hour away from my house, which would save me the cost of living and food. Unlike me, many of my friends looked for schools that they loved without a thought to the school’s price tag.
    The article mentioned a solution to the student debt problem that George W. Bush launched, which gave students who pledged to work for the government or a nonprofit for a total of ten years a way to get their debt forgiven. However, in order to have the debt forgiven, students had to use a complex formula to make payments for ten years. This year would mark the end of the ten-year payments for the students involved in the program, but out of the 700,000 participants, only 500 are scheduled to follow the work plan. The number of people who qualify for the plan are low because the other students could not keep up with the payments for those ten years. From a glance Bush’s plan makes sense and would diminish debt for students; however in hindsight the complicated payment plan that enrollees had to keep up with for ten years sets students up for failure.

  4. Reading this article, I cannot help to think of me. As I am a college student who will be graduating next year coming out of college with hefty debt from loan problems. Reading this article is very saddening because I believe that this is the biggest problem in America. Trying to get a college degree costs an arm and leg and it is ridiculous. College should not cost this much to go and get an education and reach your goals. Last year I had the privilege to study abroad which I am forever grateful. At my school abroad, there were so many students from other countries who have different governments and different educational systems. Some of the students talked about how it is ridiculous how much we, Americans, pay so much just to have a higher education when they pay far beyond less and one of the students was getting paid from the government to be abroad. Looking at America’s education system it seems broken and that only the rich can afford higher education when in reality it shouldn’t be based on money it should be about intelligence. In these other countries, these students have harder test but this is because these tests are making sure they are learning the materials. Why should money be the thing that keeps us from reaching our goals and jobs and higher education. I think this is where America has gone wrong. When I come out of college it is going to be rough to pay back my loans and it will be for everyone who has loans. But I will never go to the extreme level of suicide. People have killed themselves because of loans and the American government should be taking this as a wake-up call.

  5. As I read this article, I could not stop thinking about myself and how in about a year I will be out of college and having to pay my student loans back. Which at this point in time could probably buy me a brand new Mercedes Benz or any other luxury car for that matter. I do feel that I might get swallowed by my debt and end up having to file bankruptcy and ruin my credit. However, I would not consider suicide as a way out of paying my student loans back. In our society, we value education, which is great but we do not mention that education can come with a hefty price tag. In order to get a decently paying job in the workforce, it is essential that one has at least a Bachelor’s degree. Not everyone is fit to go to college because not everyone wants to put themselves through the amount of work and financial debt. Being that most of us college students will graduate with a loan amount that could equate to buying a small house outright, we are scared that we may never be able to pay it back. Being that we already owe what some people take out on a mortgage for their house, before the interest of course. Will we want to ever consider buying a house? I know I do not want to end up with half a million dollars worth of debt.
    Defaulting on my loan or not being able to get a job that will allow me to pay my student loans back and even allow me some extra income to invest or allow me to live my life, is something that genuinely scares me. But, even if I wanted out on my loans I would never be able to get out of them if I die then my estate would have to pay it back. I wish that the price of college was more affordable as I do not want to spend the rest of my life having to pay loans back or a mortgage payment. I do get a scholarship to come to college, but that does not cover everything that I owe, that only covers about 60% of the cost so I have to take out loans to cover the rest. In foreign countries, you would need to take a test to go to college and that test would be very hard but the price of education is a lot cheaper. It seems like an American thing to graduate from college with loans that are as high as they are. Some people in other countries may have $20,000 worth of loans graduating from college after four years, but I will probably be graduating with at least $150,000 worth of loans. I would have an exact number but I would rather not calculate that at this point in time because I do not want to freak out. The fact that some people have turned to suicide as the only way out of their loans, should be a wake-up call to the government and to our society.

  6. This article really explains what a huge issue America’s education system really is. The issues with the spike in tuition are just part of the problem I believe. I also believe that the increase in the number of private and for-profit universities has created an additional issue. The article mentioned that the mindset of the current youth is that they must go to college or end up in a dead-end job or worse be homeless at a young age. This has created an increase in those seeking higher education. The increase in the number of young adults seeking higher education after high school only increases over the years creating a need for universities to expand, and for also for new ones to be established.
    Many of these schools are treating the education system and the admissions system like a business. More students are being accepted that don’t meet minimal qualifications or standards needed for the program. One example of this is law school, specifically Infilaw. This is a company which created three for-profit law schools. The students that this system was targeting and accepting was below the level that any other school would have. On the other hand, the rate of tuition was substantially higher than the other schools. They were targeting recent graduates who wanted to attend law school but didn’t have the GPA or LSAT to be competitive at the other schools. (Campos, 2017) They could at their school, for a price. The Infilaw schools created this scam of teaching law to students and charging high amount, with very low BAR passing rates. One of its school’s lost accreditation, another was repentantly closed, and the third took steps to reestablish themselves as a non-profit university. All of this because they were unable to properly educate their student enough to be successful in their carer field. This scam was even caught the eye of famous author John Grisham who used the idea for the plot of his book “The Rooster Bar.”
    The issue of our Secretary of Education, Betsy DeVos, and Julian Schmoke is a problem that we should have seen coming. However, in politics, this continues to be a recurring issue. CEO of Beef Products INC becoming head of FDA. People who made careers in the system now overseeing the guidance of the government over that system. Here in education, we have two people that are notorious for creating high profits off of students and both very focused on the private sector of education as opposed to state schools. We need a change. As a country, we need to consider how important our education is and restructure the system around it. In 2017, New York state created a program offering free college tuition to its residents whose families made less than $100,000 yearly. Other states like Texas offer children of military service members or veterans who are Texas residents the opportunity to attend their state schools for free for four years. Some young adults are pursuing opportunities in the military themselves to get the Post 9/11 GI Bill, which grants 36 months of educational benefits with a monthly stipend for housing to its members once they are finished with their enlistment.
    Programs like this create an opportunity for the youth to get an education and start a career without having this huge debt hanging over their head called student loans. The federal government needs to take a harder stance when dealing with the education system. They should limit the aid of private and public lenders who offer aid to students of for-profit universities. They should create laws that punish education programs who can’t meet standard requirements like a certain percentage passing career exam (BAR, NCLEX, SIE), or the average income of their students after graduation. Having students attempt to pay $250,000 of student loan debt, while only making $45,000 a year is creating an issue for society.

    Campos, Paul. “The Law-School Scam.” The Atlantic, Atlantic Media Company, 19 Jan. 2017, https://www.theatlantic.com/magazine/archive/2014/09/the-law-school-scam/375069/

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