As unemployment remains stubbornly high, delinquencies and default rates are rising as indebted borrowers struggle to repay hefty student loans that often reach six-figures.
Unfortunately, college debt isn't just taking a financial toll on millions of borrowers. It's also inflicting staggering costs on the health, careers, emotional well-being and personal relationships of those burdened with big college loans.
At StudentLoanJustice.org, where people share their stories about living with college debt, one person talks about suffering a mild heart attack, while another laments having panic attacks – both due to the stress of student loans. Others admit having sleepless nights, migraines and even thoughts of suicide.
In fact, in a poll currently running on ForgiveStudentLoanDebt.com, 8% of those surveyed said they would be willing to commit suicide "as an aggressive form of protest" in order to be heard by Congress about their student loan plight.
So if you think the worst that can happen with hefty student loans or unpaid college debt is money problems and bad credit, think again.
It can actually get worse. Much worse.
A Ruined Relationship
One woman, who asked that her name not be used because of the sensitive nature of her job, is working abroad after getting her bachelor's degree from the University of Washington in Seattle and her PhD from the University of London. She says student loans have helped her achieve various academic and professional goals. Those same loans, however, helped ruin a cherished relationship, too.
The 33-year-old woman last month endured a painful breakup with her boyfriend of seven years. "Much of it was to do to the fact that I have over $150,000 in student loan debt and he did not want to be responsible, or help me, pay it back," she told WalletPop. "He wanted other things, such as a house and kids, and that is simply not an option for me as I have this mountain of debt to pay back."
She is currently finishing her clinical residency as a psychologist. "The pay is not great, and two of my loans are in temporary hardship forbearance."
Of her breakup, she says, "I do understand where he's coming from." Nevertheless, she said the whole situation is still "so sad."
Family Tensions Boil Over
When 31-year-old Jessica Tisdale* fell in love with someone who had gigantic student loans, her relatives all advised her not to get married. "My whole family was against me marrying my husband because he has approximately $300,000 in student loan debt," says Tisdale, who lives in New York. But against her family's wishes, she went through with the wedding anyway.
Her 34-year-old husband attended medical school, but he couldn't complete his last year because he ran out of student loans in 2008 and had no other way to pay for tuition.
Since then, he's been unable to finish his studies or, despite his best efforts, find full-time work. Now Tisdale's husband is undergoing training to sell insurance. Adding to their stress, the couple – who just got married last year – has had to move in with her mother.
"It's really embarrassing to be over 30 and still living with your mom," Tisdale says. "Plus, my mom frequently yells about what a deadbeat [my husband] is and how stupid I was to marry him, so that causes a lot of tension in the household."
Asked whether she regrets her decision to marry someone with so many student loans, Tisdale says no. She notes that she has big student loans of her own -- roughly $163,000, after earning a bachelor's degree from Columbia University and a master's degree in linguistics from New York University.
Tisdale is currently holding down three part-time jobs to make her $750 a month student loan payments. Next spring, her payments will rise to $1,050 monthly. Meanwhile, a few of her husband's loans have slipped into default.
Career Dreams Dashed
In addition to seriously damaging your credit rating, student loan defaults also carry severe career consequences. Under the law, professionals with any kind of state license – doctors, lawyers, accountants and so on – can all have their professional licenses revoked if they default on federal student loans.
Such defaults are particularly troublesome for health-care workers because borrowers in default also get excluded from the Medicare and Medicaid programs by the U.S. Department of Health and Human Services. For existing doctors and health-care providers, they'd be unable to accept Medicare payments, which is critical for hospitals, clinics, physicians and others.
Moreover, for medical professionals, a federal student loan default "effectively eliminates 98% of your employment opportunities," says Michael Smith, an attorney with The Health Law Firm, an Altamonte Springs, Fla.-based company that provides legal services to the health-care industry.
"If you're excluded from the Medicare program, no other provider that takes Medicare can contract with you in any form," Smith told WalletPop. "I tell my clients, 'You can't even cut the grass at a hospital, or they will lose their Medicare (status).' "
Because he hasn't finished school and due to his student loan defaults, Tisdale says her husband realizes that his dreams of becoming a pediatric surgeon have been dashed. So, according to Tisdale, her husband is "turning his attention to the things he can control. He's disappointed. But he's a realist."
As if the loss of career options wasn't bad enough, Tisdale and her husband lament that their student loan debt has even forced the couple to put on hold another big goal: having kids together.
They also worry about the impact of their loans on their immediate family members. "His sister co-signed on his loans, so he's trying not to drag her down," Tisdale says. "Same for me: My mom co-signed my loans, and if I go down, she's going to go down with me, and I don't want that."
Although the financial stress of having big student loans is tough, Tisdale says, "We can be sympathetic, and we end up being an emotional support for each other, because we're in the same boat."
A Life on the Run
Matthew Bridges* is a 65-year-old college professor who teaches science classes online. He's also, in his words, "a fugitive" because an insurmountable level of student loan debt has upended his entire world.
By his creditors' last tally, Bridges owes a jaw-dropping $1.75 million in student loans. To escape unrelenting harassment from debt collectors, Bridges fled the country in 2006 to live and work in the Philippines.
Bridges spoke to WalletPop recently during a brief visit back to the U.S., where he shared his story and explained why he took the drastic step of leaving his homeland. For starters, his college debt load wasn't always so staggering.
Bridges first earned a science degree in 1984 and later obtained a PhD. in 1996 from a for-profit college in Texas. By the time he finished his doctorate, Bridges owed $104,000 in student loans.
Over the course of more than 25 years, however, interest on all his loans has compounded, and late fees plus penalties have been tacked on to what he owed. Some interest rates were as high as 29.99%, and collection charges of roughly 25% have been added to his debt, he says. "I'll never be able to earn my way out of this problem," says Bridges.
Because he is dyslexic and suffered various physical ailments, Bridges endured long bouts of unemployment throughout his career. At one point in his earlier years, "I was eating out of a dumpster," he recalls.
Later, when he earned his PhD at age 51, his employment prospects still didn't improve much. "No university wanted to hire anyone 51," he says. "They wanted to hire people who were 30."
It's only been in the past seven years, after being diagnosed as a lifelong dyslexic and getting medication from a Veterans Administration hospital, that he's been able to work steadily. He says his income has ranged from $20,000 to $50,000 annually, with 2009 being his "best year ever."
Still, his earnings aren't enough to even pay the interest on his student loans.
Ridiculed and Threatened
Bridges got married in 1994 and for much of the past 16 years, he said he and his wife have lived in "sheer terror" of relentless, abusive collection agents. "They used every manner of profanity imaginable," he says. "They ridiculed me, my degree and my humanity."
"They misrepresented themselves as being from the federal government," he adds, "and said that if I didn't pay in full, they had ways and means of locating me and making sure that me and all my family members were taken to court and made to testify.
"I'm the only survivor in my family," Bridges says. But his wife's relatives are a large, close-knit group. "I didn't want to drag her family through that."
Unfortunately for Bridges, many of the debt collectors' threats came true. His wages have been garnished, and his federal income taxes taken annually. "Sometimes, my tax return would be as much as $2,500 or $3,000, but they always took it," says Bridges. "My wife would have to file something called an innocent spouse form," so the IRS wouldn't snatch any refund due her.
Then one day, Bridges and his wife went to the Philippines, partly for recreation but mainly to escape the isolation and pressure of living with his big debts. He says he actually got the idea to stay abroad at the suggestion of a "friendly" debt collector who told him: "You know you'll never pay this money off. People like you usually just go to another country."
That idea stuck in his head. So in 2006, he did just that, fleeing America to escape his student loans. In recent years, Bridges and his wife have lived in the Philippines, taught at a school there, and finally enjoyed an existence free from student loan creditors.
Despite the peace that came from living overseas, being away from family eventually gnawed at his wife. She missed her daughter and grandchildren terribly, and wanted to be back in the United States. "The fact that I have to hide from the student loan people has been an incredible burden on both of us, and an incredible factor in the tension in our marriage," Bridges says.
"I'm literally a fugitive. I feel like a criminal," he adds. "I can't own anything. I'm afraid of the knock on the door. I've got the blinds drawn. And when there's a knock on the door or if someone drives up, I first peek out the window to see if I recognize the person or the car. If I don't, I don't answer."
The only time he makes calls to anyone is via Skype, to avoid being tracked. "I've learned to survive, escape and evade," Bridges says, "even in my own country, from my own people, for doing what they told me to do, getting a degree."
Bridges says he feels horrible and disappointed about his inability to pay his debts, and that he only fled America to be done with the collection agents. Living incognito before was bad enough, especially because it was "very isolating and embarrassing to constantly change phone numbers every month or two," he explains.
That's why Bridges is now back in the U.S. just for a short time. He said he loves his wife deeply, but they are currently separated and plan to divorce, so that she can finally live freely without the hassles and stress associated with his student loans.
Going through with the divorce, he says, "is the least I can do for her."
Is College Still Worth It?
C. Cryn Johannsen is an independent student loan advocate who is in contact with thousands of debtors, via her research and her role as the Online Brand Advocate for SponsorChange.org, a non-profit that helps people whittle down their student loans by performing meaningful volunteer work.
Johannsen says she is "acutely aware of the emotional toll of being on the brink of financial disaster due to a degree hanging on your wall. That's why so many (former students) resent the fact that they were told to go to school and pursue a degree."
Countless people, says Johannsen, "feel like college is a bait and switch trap. That's wrong. What's particularly tragic about this sentiment is that it's fostering a general sense that education is not worth it."
"In my view, that's a dangerous position to hold, especially for the well-being and growth of a democratic society," she adds.
Unlike individuals with big mortgages, numerous credit card debts or massive medical bills, people with enormous student loans can't wipe out college debt in bankruptcy court. Consequently, depending on whose statistics you believe, anywhere from 6.7% to as many as 33% of federal student loans are now in default. In addition, America's $830 billion in student loan debt now exceeds credit card debt, which totals $826 billion.
Despite these bleak numbers, statistics alone paint an incomplete picture of the depth and complexity of the student loan crisis. As the stories above illustrate, the student loan dilemma clearly goes far beyond its economic price tag.
Haunted for Life
Now living alone, Bridges, the college professor, wakes up daily at 4 a.m. He spends at least one hour each morning surfing the Internet, reading expat discussion-group chats, and researching countries he can go to in order to again flee his student loan debt.
"I'd love to stay here. I've got friends in this area I've had for almost 30 years," he says wistfully. "But the alternative is being persecuted and prosecuted."
Just leaving America, however, won't end the constant reminders that he owes money he can never possibly pay back. That's because next year, when he turns 66, Bridges will start to collect Social Security.
But those who default on federal student loans can have 15% of their Social Security retirement benefits garnished. So for the rest of his life, Bridges says, "I fully expect they'll take that, too."
* Names and some personal information have been changed to protect their identities.