Adult Learners, American Individualism, CMU, Debt Peonage, Financial Aid, Financial Literacy, First-Generation Students, HSBC, In Time (2011), Interest Rates, Loan Payments, Marine Midland Bank, Navient, Nontraditional Students, Perkins Loans, Pitt, Poverty, Sallie Mae, Self-Reflection, Stafford Loans, Student Loans
This week in July thirty years ago, I took out the first of what would be a series of student loans. Loans that would help cover eight of my ten years of undergraduate and graduate studies at the University of Pittsburgh and Carnegie Mellon University. In three-and-a-half-months, I will be ending my twentieth year paying off those loans. If I had to do it all over again, I may have stayed in New York State to take advantage of the TAP award (need-based financial aid). That way, I wouldn’t have needed to borrow for my undergrad. But given my near desperation for wanting to escape grinding poverty, 616 and my family, Mount Vernon, New York, and the stigma that was my life living there among hostile and indifferent classmates, teachers, and neighbors, borrowing $2,625 on July 16 of ’87 didn’t seem so bad.
Yep, my first subsidized/unsubsidized Stafford student loan was a modest one. It was a set maximum based on the old laws limiting student borrowing (especially for college freshmen) three decades ago. I remember thinking to myself, “How the heck am I gonna pay this back?,” as I went through an hour of phone calls between Pitt’s financial aid office and Marine Midland Bank (now part of HSBC). The latter was where I had my first bank account, where I had deposited $500 of scholarship money from Mount Vernon’s Afro-Caribbean Club. That’s how little I knew about the process – I went with a bank that didn’t exist outside of New York State to work with a school in Western Pennsylvania!
Because I wasn’t yet eighteen, I needed my Mom to co-sign my loan. Because my Mom didn’t have collateral, she needed to add two relatives who did have assets to my first loan. In the end, Mom chose my maternal grandmother Beulah and my great-great-aunt in Seattle Inez (who just happened to be Johnny Gill’s great or great-great grandmother — didn’t know it at the time) as relatives with collateral who could be on the hook if I or she ever defaulted on our future payments. Of course, Mom didn’t actually seek permission from my then sixty-year-old grandma in rural Arkansas or my better-off, octogenarian, great-great aunt for this sign-off. Apparently, Marine Midland didn’t care, either. And that’s how it was for the next four years, having relatives whom I had never met (and in the case of great-great aunt Inez, who died at 101 years old in the early ’00s, would never meet) as collateral for my loans.
I’d also take out the smaller Perkins Loan for my undergraduate time at Pitt, an additional $2,000 per year, for three of my four years there. In all, I’d borrow more than $16,000 in four years, with a high of $4,000 in Stafford Loans in my junior year, 1989-90.
It bothered me every time I had to re-up for student loans. Not just because of the false notion of American individualism, the idea that I shouldn’t need anyone’s help to go earn a degree. It bothered me because I feared, sometimes to the point of nightmares, that I’d never be able to pay this money back.
Graduate school at Carnegie Mellon and the loosening of the student loan rules and amounts under President Clinton in 1994 made things better and worse. I barely borrowed my first two and a half years of grad school at both Pitt and CMU, to the tune of $1,800 in all. CMU paid me so little as a grad student that I had little choice if I ever planned on eating more than one meal a day but to borrow. And that’s how most of my borrowing occurred between January 1994 and January 1997, to either have to supplement my meager stipend (before the year of my Spencer Dissertation fellowship). Or, to use the funds to help support my dissertation research, the travel to/from and living arrangements while in DC in 1994 and 1995. Unlike many of my graduate school colleagues (especially the ones working on professional master’s degrees or a law degree), I didn’t use my loans to go on extended weekends to Bermuda or to take summer vacations in the Grand Caymans.
Of course, I graduated in May ’97, and lo and behold, I couldn’t find full-time work. And with the exception of the months of July, August, and September 1998, I wouldn’t have full-time or full-time equivalent work until I left Pittsburgh for work in the DC area in the summer of 1999. But, my consolidated student loans through the dispensations of Sallie Mae never took that into account when my first payment became due Thanksgiving Week 1997. I was able to get a reduced payment of $20 per month for the first two years. I didn’t default, but it made paying off my student loans that much harder. It didn’t help that Sallie Mae had locked in my interest rate at eight percent, retroactive to July 1987, and unchangeable under any circumstances. Even with consumer interest rates the way they have been for the past decade.
Flush or not, full-time or underemployed or somewhere in between, the student loan payments, deferments, and forebearances have been non-stop for two decades. Even credit card companies will leave folks alone if they make regular minimum payments. Not so with student loans or with Sallie Mae (now Navient, which must mean assholes in financial aid-speak). Despite everything I’ve been through financially over the years, I finally paid off the original principal of my consolidated student loans about two years ago. Great. It still means that I have left another decade of payments on accumulated interest before I can be forever free of this nearly endless cycle.
Here’s the real thing that I think I’d do over again, that should be done about this corrupt and serfdom-like process. Sixteen, seventeen, or eighteen years old is way too young to be making financial decisions that I or anyone else will have to live with for four decades or more. Even deciding to serve in the military isn’t a decades’ long commitment (unless one chooses to re-up or goes to officer’s school). At the very least, no one under twenty-one should have to commit themselves to debt peonage, including student loans. As for me, working thirty hours a week on or off campus between 1987 and 1997 to cover costs and necessities would’ve been preferable to this iron collar.
The real problem, of course, is that adult learners are taking out many of these loans these days. Even though they may be old enough to know better, they aren’t experienced enough. Lumina Foundation and other organizations have concentrated on “financial literacy” as the way out. This is wrong-headed, as it does nothing to change this financially enslaving system. Really, it would take free and significantly-reduced undergraduate tuition to do the trick. But where’s the fun, profit, and human misery in that?