Bankruptcy of Your Student Loans

Bankruptcy of Your Student Loans

Thursday, June 23, 2016

THE AMERICAN DREAM - OR THE AMERICAN NIGHTMARE?

The American Dream: graduate college, start your career, buy a house, start a family!

My friend and fellow student loan and education blogger, W. Richard Fossey wrote me an email this week which included a request to help a young woman who has realized that her college education debt of nearly $80,000.00 and growing everyday has become the "nightmare under her bed"!  That is how Alison Walton describes her dream of going to college, getting a degree and starting a career, which we have been led to believe is the ALL AMERICAN DREAM.

As I read her story which I am going to re-post in it's entirety here, I knew exactly what she felt; I had the same dreams and hopes when I returned to college at age 40.  What I ended up with was a Master's degree and upon graduation, I was not able to find a job in my field of study.  Twenty seven years later I found myself with a debt of close to $130,000.00, my life in dire financial shape - the answer for me was filing bankruptcy without an attorney and trying to prove Undue Hardship!  Fortunately I was successful.  My life's purpose now is to try and help others deal with student debt that has taken their dreams and turned them into nightmares! 

HERE IS ALISON'S STORY - A BROKEN DREAM!

My DeVry Experience
By Alison Walton

The American Dream: graduate college, start your career, buy a house, start a family. Most everyone has this vision for their lives, or something very similar. College is supposed to be that magic ingredient that will help you achieve your full potential in life. College is the gateway to put you ahead of the masses, helping you to stand out to employers and give you a solid foundation for your future. In my case, college is the beast that is holding me back. College is the nightmare under my bed, haunting my dreams. College has put me over $80,000 in debt.

High School is nothing I look back on with fond memories. I just wanted to do my time and move on. I never dreamed of furthering my education, all I wanted was to graduate and join the work force. My parents had a much different idea for my future, they wanted better. They wanted me to not have to know their struggles, so they pushed me towards higher education. Near the end of my senior year a recruiter from DeVry University visited my high school campus. This recruiter came promising the world on a silver platter: a Bachelor’s Degree in two and half years instead of four, a course schedule that consisted of degree specific classes, and a Career Center that helped place graduates in careers of their degree field. I called and scheduled a recruiter to meet with me and go over all the details of a DeVry education. This person came into my home, sat at my kitchen table, told my parents and I what a great choice I was making and how wonderful my future would be. The contract contained two totals for the degree program I entered into; the main contract stating a cost of $49,850 and a California Addendum for $55,365. Both of these figures were well outside my family’s means. When we questioned how we'd be able to afford it the recruiter assured us student loans would be no problem and I'd have my funding. I had recently turned 18, and my first big step as an adult was to sign the contract that would haunt me the rest of my foreseeable future.

I started DeVry University in Sherman Oaks, Ca (originally West Hills Campus) in August 2005. I graduated with my Bachelor’s of Science Business Administration Degree in June 2012. It took me seven years, as a part time student, to complete my degree program. The last two years of my education was by far the most difficult, not academically but emotionally. I found out in the summer of 2010 that I was officially maxed out on my FAFSA loans. I had no idea that was possible to do. Up until this point I had had very little interaction with the Financial Aid office. I would go in every semester, file my FAFSA and that was it. On occasion I was told I had a financial aid hold on my account. When I asked why I was told 'just pay $100 and the hold will get removed,' so I did. I had faith in the advisor that I was being looked after and directed in the right path. After being told I had no more funding I starting digging into the finer financial details of my education and what I learned floored me.  I learned that I was paying more per unit by maintaining only a part time status. DeVry had a unit ranking for their classes, as most colleges do. One class could be anywhere from 3 units to 4units, and on rare occasions 5 units. If I had carried a full load I would have had an out of pocket expense every semester, but part of that load would have been discounted. I had always taken two classes a semester (part time status, roughly 6 to 8 units), as that is what my financial aid would cover in full.

Both my parents worked full time jobs, and there was just enough money to keep the house running. Extra money for my education was not an option; it was just one example of why they pushed me to better myself. I worked mostly part time trying to support myself through school, but I did not make enough to cover full time status. At one point I got lucky enough to find a full time job paying me $12.00 an hour. Unfortunately this was just after the campus was moved 15 miles further away from home. I was already driving over 30 miles one way to get to campus. My new job would not allow me to alter my schedule so I could continue on-site classes, so I ended up having to quit and go back to part time work. At this time my Academic Adviser suggested online courses, which allowed me the freedom to do my classes around work and saved me a lot of money in gas. It wasn't until that Financial Aid meeting in 2010 that I learned the online courses were significantly more expensive than campus classes.

Sitting in the Financial Aid office that day I learned I would need roughly $20,000 to finish my education. How could this be happening? I had already completed so much of my degree program, and had incurred so much debt that there was no way I could start over at a different school. I was told I had to apply for a private loan and only after it was denied could I apply for a loan through the DeVry ECSI Program. I took one loan in May 2011, and a second in March 2012. In addition to the loan, I asked what other options I had to reduce the remaining cost. I was told I could submit an appeal to transfer credits from a community college. Again I was shocked. I was specifically told when I started at DeVry that credits were non-transferable, so I never tried pursing that course of action. Had I known that I could in fact transfer credits, I would have looked into this option much sooner as I live less than 5 miles from my community college. I filed the appeal and took four classes at Moorpark Community College. While I was relieved at this opportunity, I was heartbroken as well. Those four classes, with all the books and fees, cost me less than one unit credit at DeVry. This made me realize just how big of a mistake I made when I chose to pursue my education with DeVry University, and how much they took advantage of my lack of knowledge regarding the student loan process.

The appeal to transfer credits would not be my last. When I returned to DeVry after taking my community college courses, I would have to write two more appeal letters before I received my diploma. To get the funding for my final semester I had to apply for a second loan through the ECSI Program. In order to get the total amount needed I would have to overload my units, taking 2-3 units more than the maximum DeVry would allow. I wrote a very simple appeal letter, consisting of one paragraph that in short stated “please allow me to overload my course units, so I can apply for this loan as it is my only option to be able to afford to complete my education”. It was denied by the Dean of Students. When I inquired as to why my appeal was denied I was told the Dean ‘wanted to know how I was going to be successful’ if the request was allowed. During my time at DeVry I had the following against me: I had only taken two classes a semester, I had failed one class, and I had taken an entire semester off. My appeal then became a two page paper on my projected study habits and explanations of the above stated offenses. It was approved and I was able to get the loan to finish my course load. During my final class I received notification from the Administration Office that my application to walk in the graduation ceremony was denied, on the grounds I was missing 3 units of elective credits. I already had the Dean’s approval in writing to allow a course I had accidentally taken twice to count as this ‘missing’ elective. My Academic Adviser, who helped me schedule my classes, had not noticed I had already taken the course under the previous course code. I had to write yet another appeal to the Dean, which fortunately was approved with no hassle, so I could finally complete my education and receive my diploma.

One of the things that drew me to DeVry University was their promise of career placement. The school boasted their Career Center helped their graduating students find jobs in their new fields of education. Roughly six months after I graduated I was contacted by the Career Center with a prospective job opportunity. They had found me a 20 hour a week, $9.00 an hour position. That’s what seven years of study and tens of thousands of dollars in student loan debt got me, an offer for a position that was suited for a High School Junior or Senior. I turned the position down as I was currently working 40 hours a week, making $14.00 an hour with full benefits. I asked the Career Center to please let me know if they found anything meeting or exceeding my current situation. As I type this letter it has been three and a half years since I graduated, and I have not heard from the Career Center at DeVry University since.

In 2015 I had a consultation with a lawyer to see if I had any legal grounds to stand on, in terms of getting my loans reduced due what I saw as unethical and less than forthright business practices by DeVry University. I did not. The contract is so well written by DeVry that I would have been facing an even more expensive and most likely pointless legal battle if I went down that road.  It is now the start of 2016. I have worked my way up through a few different companies to become an Accounts Receivable Specialist. I work a full 40 hours a week at $21.00 an hour, have full benefits, and pay back almost $400 a month in student loan debt.

I consolidated my federal student loans in 2014, at which time the consolidated total was $72,460.73. When I consolidated I applied for, and was granted, an Income Based Repayment plan that I must re-qualify for every year. My monthly payment is $170; since 2014 I have paid $4,234.43 towards this loan. The current balance is now $75,822.85; my payment does not cover the interest I am accruing every month, so my loan balance has increased. Until such a time as I can pay off the accrued interest and make a substantially larger monthly payment, this balance will continue to grow. My loans through the DeVry ECSI Program totaled $13,260.41 and currently have a payoff balance of $8,949. I have paid back $5,815.20 in interest alone since 2011.


Every day I struggle with the financial position I am in due to my education. When I started college I looked forward to one day owning a home. That dream was the light that kept me going and made me never give up achieving my degree. Today that dream feels like an impossible task. I look at my student loans and wonder how my dream will ever become reality. My parents see me struggle and feel immense guilt, as it was their urging that put me on the path to DeVry. I want people to know my story so they can be fully aware of the potential situation they are entering in to. I want young high school graduates, like I was, to be spared the feeling of hopelessness that I now struggle with. Please help me stop DeVry University from robbing even one more person of the future they have stolen from me.

THANK YOU ALISON - YOU ARE NOT ALONE!

Alison's story is just one of tens of thousands!  While she found that DeVry University personally let her down, I have found that there are any number of colleges and universities that are just as guilty of "failing" enrollees and graduates!  The facts are overwhelming.  Colleges seem to have one goal in mind and that is the PROFIT they are bringing in, and "To Hell" with the student!


If you have any comments, questions, or suggestions for this blog, please let me know.  By choosing to follow my blog, you will be informed of my latest posts - just complete by posting your email in the form on the upper right of this page.

Until next time, God Bless America!
Richard Allen Precht




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