A few days ago, I got an e-mail from my dearest friend Kat in my inbox asking me to do something she really has never, in the 7 years we’ve been friends, asked me to do for her: a favor. This favor was in the form of a Petition to the White House concerning matters of Student Loan Debt in relation to her disability. The more I read from her, the more important I felt it was to share this in a really public forum. I know it takes a lot of strength and courage to admit that you are being treated unfairly – either health wise, or personally – and I think Kat’s intimate knowledge of her subject matter, combined with an immense passion to make a change to this World (something I’ve truly always admired about her) is absolutely important and essential. I truly believe that we can change the World, help one another, and therefore, truly help ourselves by sharing our struggles and helping one another to overcome them.
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My generation was long told that a college degree was essential if you wanted to ‘get anywhere’ in life. By the time I was in college, common opinion had shifted and it was no longer enough to have an undergraduate degree, you needed a graduate degree too. I have a rare type of Muscular Dystrophy that has left me with a speech impediment which people are quick to think means I am mentally handicapped in addition to my physical handicap. This assumption is particularly galling for numerous reasons especially given that my brain is one of the only things my illness has left alone. Over the years doctors, teachers, peers and certain family members have made assumptions about my abilities (physical and mental) and, for me, this became a key motivation for going to graduate school. I thought that this advanced degree would finally prove them wrong and so I applied and was accepted to a top school in Europe.
I took out student loans to pay for it and believed that, as everyone said, I’d be able to repay them with relative ease since that’s what this degree thing was all about, right? The recession hit about the time I started my studies and as soon as my course began, I had serious doubts. Was this debt really worth it? Did I really buy into the belief that I needed this degree to be somehow acceptable in the eyes of the world? I silenced these doubts with the argument that clearly this thing that was freaking me out meant that I should power through and face my fears. It’s interesting, this human propensity for burying your head in the sand and ignoring the flashing warning signs all around you.
I was awarded my degree and got a very poorly paying job in my field but one that I considered myself lucky to have when so many were out of work. It was during this period that I began to understand that my disability had reached the point where a traditional 9-5 job was not possible for me physically. This coincided with my loans going into repayment and I was dismayed when my monthly student loan bill was greater than my income at my public service job. I went on IBR (income based repayment) and calmed down until I realized how quickly my interest was building up. Within two years I gained over $10,000 in debt due to interest alone.
After much confusion and months of being told that I did or didn’t qualify (this changed depending on the department and who I was speaking with), I learned that I was indeed eligible for student loan forgiveness on the basis of permanent and total disability.
Here’s how it works: I met with a doctor who has known me since I was diagnosed (I flew home for this purpose) and we completed exhaustive paperwork about my disability and filed it with my lender. I had to prove that my disability was permanent (it is), that it wouldn’t improve (it won’t) and that it severely limited my ability to work to the extent that repaying my loans would be a significant hardship (it would). If my loans were forgiven, my income would be monitored for three years to ensure that I did not exceed the federal poverty guidelines for a two-person household. As of January 2013 that means approximately $15,000/year. If, at any point, my earnings are even slightly greater than this amount, my loans will be reinstated with interest.
Seven months after I filed my paperwork I received confirmation that I had been initially approved and now it was up to the Department of Education to give the final okay. Here comes the catch. The amount forgiven will be taxed as income. One woman who had over $90,000 in student loans forgiven was left with a tax bill close to $30,000. The IRS, upon learning that she had no way to come up with this money, threatened a tax lien on her house. To be clear, the IRS is asking for double her annual income and should she find work that she can do that would allow her to make the necessary money to pay the IRS, her loans would be reinstated anyway and it’s back to square one (with interest).
I’m baffled by our government’s thinking on this matter. This debt is only forgiven for people in truly dire situations – people with disabilities so severe the rest of the population thanks their lucky stars that they’re not us. I fail to understand how someone who is too disabled to pay back their student loans suddenly becomes able-bodied enough in the eyes of the government to magically find tens of thousands of dollars for taxes. If I had that kind of money lying around, I wouldn’t be applying for the loan forgiveness in the first place.
Some people have asked me why I didn’t simply stay with the IBR plan since that would have also been forgiven after twenty-five years. Because I was unable to keep up with the interest on my loans, the amount I owed would have steadily increased and at the end of twenty-five years (with an increasingly worsening disease) I would have owed easily 4-5x as much (if not more) as I am anticipating owing in the coming months.
It seems to me that disabled borrowers are being forced to pick one form of debt over another and it’s time for that to change. Disability is hard in the best of circumstances but to be shuffled from one financially difficult situation to another is absurd. I would like to bring attention to this issue and ask that people sign the following petition: http://wh.gov/yy2O.
I believe change is possible but only if we join together and demand it.
Love & Light