9 Unbelievable Student Loan Horror Stories

With the cost of college continuing to rise and the economy still stagnating, the student debt burden has swollen to a record $1 trillion.

Mark Kantrowitz, publisher of Fastweb.com and FinAid.org, believes that one of the main culprits behind the student debt crisis is the private student loan sector.

"Students are following their dreams and don't pay attention to their debt," Kantrowitz says. "They sign whatever piece of paper is put in front of them, figuring they'll pay it back when they graduate."

Unlike federal loans, private loans usually come with variable interest rates that seem low at first glance but can skyrocket by 5 points over the loan's lifetime. They also offer far fewer options for cash-strapped graduates struggling with payments, such as deferment, lengthy forbearance periods and income-based relief.

And since it's next to impossible to discharge student loan debt in bankruptcy, millions of students are left drowning in private debt they have no hopes of ever paying off.

Last year, the Consumer Financial Protection Bureau (CFPB) put out a call for consumers to share their student loan stories on its message board and get the ball rolling on lending reform. 

But for these nine commenters, it may already be too little, too late.

This is part of our series on The Best Colleges In America.

Steve Macintyre: $100,000 in debt and out of a job

"I used to work in the entertainment industry but have been unemployed for a few years and I needed to desperately update my skillset if I could hope to find a job in the highly competitive field of games and animation.

Searching for various schools, I kept seeing advertisements for the Art Institute and talked with one of their recruiters and was told wonderful stories about how the school was accredited, how students went on to successful careers, etc.

I told them I wanted to get a degree in Game Art and Design but was told I could but needed to take the Graphic Design course first. I didn't think much of it at first, but I agreed. I was dismayed at the quality of the classes...(Now) I'm stuck with over $100,000 dollars in debt, which qualifies as theft as I received nothing substantive in return.

I actually had to sign up for other courses outside the school in order to successfully complete assignments! Courses that offered REAL *VIDEO* Instruction at a fraction of the cost ($35 dollars per month as opposed to $2000+ dollars!) and by a company that trains people in the industry.

It's now 8 months since loans have run out and I couldn't complete my degree and I'm still looking for work."

This comment by Steve Macintyre originally appeared in a thread on the CFPB's message board.

Socialworkmary: Paid $350+ per month on her loans for 14 years to no avail


"I admit I did not understand capitalized interest until recently. I consolidated my loans in 1997 when the interest rate was 8 percent. My student loan office at Tulane University led me to believe that I 'had' to consolidate and Sallie Mae was the only option offered to me.

I have repaid them over $61,000 (over 14 years). I think I should be done now, but according to Sallie Mae I still owe $25,000. A Sallie Mae employee directed me to write the legal department and ask to have my loan written off and to appeal if they denied. They denied, stating that federal government regulation prevents them from writing off the balance of the loan.

When I talked to the Sallie Mae employee and said I was confused about why on most months more of my payment goes to interest than principal... she chuckled and said 'We certainly don't go out of our way to put that in big bright red letters across the front page'."

This comment by socialworkmary originally appeared in a thread on the CFPB's message board.

Dgoeck: Stuck with a clunker – indefinitely

"I'm not really sure what to do at this point. I am a victim of a for-profit school that definitely seemed in cohorts with Sallie Mae. My original loan was $80,000 but has grown to $135,000 and all I can pay is interest only, which is already $700 a month.

It's ridiculous how sad this market has become. No one offers consolidation anymore or those that do will pin you at a ridiculous interest rate.

I am definitely in this for life... It looks like I will be stuck living in a low-rate apartment for the rest of my life and drive a 15-year-old car. I'm at least glad I found a really good job in the industry I was hoping for, but these loans are a real burden. Just thinking about them hurts my overall outcome each and every day."

This comment by Dgoteck originally appeared in a thread on the CFPB's message board.

Michael Speck: Passing on a generation of debt

"I have three degrees, including an MA and a JD. When I graduated from law school in '99 all of the offers – with the exception of those from the upper echelon firms that essentially own you – were for little money, leaving next to nothing for living expenses. 

Now I am making a decent living and can pay my loans under the (Income-based repayment) program, but repayment is a distant dream.  As a result, I am unable to assist my son with his education expenses (thereby effectively making the debt trans-generational), or buy a home, start my own practice, etc. 

As a macro-economic problem, those of us saddled with this debt are unable to fully participate in the economy."

This comment by Michael Speck originally appeared in a thread on the CFPB's message board.

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