Unemployment Quintupled My Student Loan Debt: One Pell Grantee’s Story
Candice’s parents were working-class people who did not attend college, nor did they have a lot of money to send Candice and her sister to college. “They worked hard,” says Candice, “There just never was enough money to save, but my parents gave us a happy life and went the extra distance to make sure we had a good education growing up.” Candice knew she wanted to attend college and that she’d have to take out student loans to get there — she had no other option. “I was prepared to do it. I knew it was my responsibility. I borrowed it; I should pay it back, but there are mitigating circumstances that have made this a burden.”
Candice attended a small, Native American liberal arts college that had the lowest tuition and fees in North Carolina, where she’s from. She had scholarships. While she was in college her father was laid off, but she got Pell Grants, which helped.
She decided to attend graduate school to get her master’s degree in English and went to an out-of-state school. Her graduate school tuition was much higher than undergraduate, and she had to work while attending school full time. She had taken on about $17,000 in loans for her bachelor’s degree and an additional $52,000 for her master’s degree. She had a plan to pay it off. But as with any plan, there can be bumps in the road.
Like thousands of others, Candice had the bad luck of entering the job market as the Great Recession hit. “I couldn’t find a job for eight months,” she says. “I moved back home with my parents, applied to 200 places, and never got called back. I went on one job interview that was at a dollar store, and the job went to someone else with more retail experience.” While Candice was frantically searching for a job, her loans went into default, and the interest kept mushrooming. She graduated with a student debt burden of $69,000; but thanks to interest and fees for her time in default, her loan burden is now about $120,000.
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Candice thinks that financial literacy and loan repayment should be something taught when you enter higher education. “I had no idea where to even start! No one talked about loan repayment, consolidation, or how to find a job. No one taught you this important stuff you needed in order to be employed and financially secure,” Candice says.
Due to the bad economy, the loans kept getting sold after institutions would go out of business. At one point she had 15 different loan notices on 15 different letterheads. Eventually the process got so complicated that Candice had to take a day off work just to figure out how to consolidate her loans. She called the U.S. Department of Education, and after being on hold for 25 minutes finally received guidance. She was able to figure out exactly how much she owed. She still owed repayment to six different places, one being a private student loan.
Candice finally got a job as a phone representative for a publisher but earned low wages in the face of a mountain of debt. Yet she was grateful for the job, because it meant she had insurance and money to buy groceries and take care of her cat.
Learn more about how student debt affects women in AAUW’s new research report, Deeper in Debt: Women and Student Loans
After being laid off from that position, she got a job at the American Society of Civil Engineers in Reston, Virginia, and applied for Income-Based Repayment (IBR), which bases your monthly payment on your wages instead of how much debt you have. Getting IBR should be a relief, but the process wasn’t easy. “That was so frustrating. I just wanted to light a dumpster on fire. It took so long,” says Candice. And even with IBR, paying off her debt is a challenge. “I’m making $47,000 before taxes. I love my job, but after living expenses, $178 a month to repay is a lot of money.”
As of right now, Candice has 81 monthly payments left before her loans are forgiven, as long as the Public Service Loan Forgiveness program continues. The program offers a path to loan forgiveness if you work in public service for 10 years. She is 34 now and has calculated that it will be another six years before her loans could be forgiven. Candice says she is fortunate that she works at an organization that qualifies her to take part in the program.
Candice’s period of unemployment really affected her ability to ever pay off her loans, and as a result, she’s sacrificing buying a house with her husband or saving for retirement. With $120,000 of student loan debt, Candice says those things just aren’t going to happen.
Learn more about how student debt affects women with AAUW’s new research report, Deeper in Debt: Women and Student Loans.
Valerie knew she wanted to go to college to achieve her academic dreams, but the threat of student loan debt was just too great.
Read AAUW’s latest research and learn why our country’s $1.3-trillion student debt burden falls unfairly on women.
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