- Today, the U.S. Department of Education is, essentially, a trillion-dollar bank, serving more than 40 million student borrowers. While the government writes these student loans, it simply cannot run the call centers or handle the paperwork for so many borrowers. It needs help. So it pays companies — the department has contracts with nine of them — to handle customer service. These servicers, as they're known, are glorified record-keepers and debt collectors. But they're also powerful gatekeepers.
And these servicers, Frotman found, with a big assist from the Education Department, were wreaking havoc with the Public Service Loan Forgiveness program.
Every time I read an article like that, I think one thing "the US is a fucked up country". I studied for 6.5 years, got a federal loan called Bafög in which I get paid between 400-700 euros per month, an amount that is dependent on the income of my parents and the price of living in the city I am studying at. When my studies are over, I am give 5 years of time where I do not have to pay anything back, yet. Then I am given options to pay back a maximum of 10k euros. No matter how much I got, 10k is the maximum. In my case I got 15k euros in that time and had to pay back 10k. I opted to back it back all at once (savings and some help from my parents). And now I am debt free. In parallel, students in the US are fucked. Is there even a way to come out of uni debt free? Or finish paying this back before you die? I read somewhere that if I have 10 dollars in my pocked and am debt free, I am better off than 15% of americans (link). That is somehow fucked up. It feels like your economy, government and everything in that country is playing against the people instead of helping them out. What I always wonder is. Why do people think that this is fine the way it is? Who wakes up in the morning and thinks "wow, I love how this country is treating me".
It's possible, although increasingly uncommon, to receive a stipend for grad school. And most American citizens don't pay "rack rate" for college; the published rates of tuition affect primarily foreign students while everyone else gets some form of scholarship. But I took the GRE, didn't get into USC, didn't rack up $200k of debt in two years and did get a job where the guy making the coffee for $6 an hour had the same degree from the same program that I didn't get into. And one of our employees did ring up $130k in debt just to get the acceptable schooling for the medical board so she could get a license doing the thing she was already licensed to do in Brazil. Student loan debt now outweighs all other kinds of debt in the United States. This is due in no small part to the fact that it's completely undisbursable short of death.
Glad I didn't waste the effort while I worked in public service... not that I managed to log the needed 10 years anyway. I always figured the rug could easily get pulled from under you. The program read like a series of hoops that you had to know to jump through the right way, all while managing to hold a public service position.
My wife graduated in 2009. I spent a lot of time trying to determine how to qualify for the loan forgiveness and discovered that the program was basically a big ball of TBD. I never heard about any clarification. It sure seems like it's been twelve years of hoping someone takes pity on you... Which, if you've ever interacted with a student loan servicer, you know to be thin hope indeed.
The cost of the GRE put the brakes on my grad school plans. I just recently got the fee reduction waiver. I'm not sure that bullshit wasn't a good thing because I had the chance to slow down and think about things, including cost and loans. Based on my own experience and stories like this, the price of education in this country is a big fuck you and a big broken promise. This story directly relates to some of my plans for higher ed so it's at least good to know.