CEDR: Members

 Please join us and tell us your story: We are compiling a list of persons harmed by student loans

We will publish it when we confirm your email address: Send to congressional.duty@gmail.com

You may choose to remain anonymous or simply remain on our list of

disenfranchised persons which will be presented along with the BILL

  Paula McKibbin   6/16/09

My name is Paula McKibbin.  I am 53 years old and have five children, three of whom are still living at home.  The ages of my three children at home are 13, 14, and 15.  I am not a welfare mother.  I am a public defender aka defense attorney, working for low wages. I represent poor people in the community who are charged with crimes.  Some of the clients I represent are financially far better off than I have ever been in my life.  I also have worked as a credentialed special education teacher in the public schools.  I am fluent in Spanish and have a great desire to go on the mission field to do Christian ministry work.  I cannot go, however, until all of my financial debt problems are resolved.  I have been dealing with the loan debt issues for more than 18 years and must get this problem resolved soon.

      Read on if you want to know how I was lied to and fell into my present homeless state.  The toll that all this has taken on my health and well being is not unique to me.  Thousands of people with whom I’ve shared my story are in the same predicament and suffer as much as I have.  Whatever has been represented to any of us with student loan debt by the student loan creditors, you need to investigate on your own.  The student loan debts are not like credit card debts, as many think.  You cannot walk away from them as you can from a business venture gone bad, credit card debts, or even homes.  In fact, they are not dischargeable in bankruptcy, I discovered, thanks to ex-President Bush.  He changed the law after many had already benefited from bankruptcy protection and got their student loans discharged in bankruptcy.  These people are today living in big homes and helping their children through college.  I have approached a few and asked them to support a measure to get bankruptcy relief revived, but they are not interested in helping people like me. 

      A lot has happened in the last two months that has drastically changed my life and that of my family.  The mortgage company, First Financial, refused to work with me to negotiate a better mortgage.  I had a home for several years at 2624 Fig Street in Selma, California.  On June 5, 2009, I arrived home from work to find a notice on my front door that they would sell my home at auction on June 14, 2009.  That gave me about a week to pack up all of our belongings and find another place to live for my children, myself and our pets.  My children and I are now separated.  They are living temporarily with their dad in Orange County.  I am renting a room from a friend at church.  Our dogs almost went to the pound, but fortunately former neighbors agreed to take them in while we tried to get on our feet again.  Some of my neighbors of many years and I cried at the recent turn of events.  I do not know what the future holds. 

      I had been promised by the mortgage company more than once in the past three or four years that they would give me a fixed-rate loan if I made all of my monthly payments. Even though I made the payments and kept my part of the bargain, they refused to honor theirs.  When I went to other financial institutions in an attempt to refinance the loan, they also turned me away because of the downturn in the economy.  I found out on Saturday (6/14/09) that I was paying twice as much in mortgage payments as others on my street who were living in bigger homes than mine.  I ended up leaving a home with an interest-only mortgage and negative equity.  As I have been living paycheck to paycheck, I couldn’t do much to make repairs to the fixer upper home, but I tried my best to make it a home for the children and myself. 

 For the past several months, I have been getting calls from people who are asking me to pay them $1,000 or more. They tell me that they can help me refinance the mortgage.  I had the same conversation so many times with these callers to know that they cannot help me because I have negative equity. 

      I listen to the news and read the newspaper that reports how the sale of new homes has increased by 17%.  What happened to the billions of dollars that the mortgage lenders got at the beginning of the year to help people like me?  I know that in the depressed area of Fresno, California, many people have purchased homes and some own their homes outright and have purchased additional homes.  Many also have homes overseas that they own outright.  They never went to college here.  Those that did go on to higher education got scholarships that were only available to minorities.  I had two classmates in law school who were minorities and shared with me that their law school education was paid for by scholarships they received just for being minorities.  I tried to find scholarships for myself, but I could not.  I am Caucasian. 

      A bill needs to be introduced into legislation to provide relief to all who have outstanding student loan debt that they are unable to pay.  They need to reinstitute the bankruptcy relief to everyone who cannot pay off their student loan debts within a reasonable period of time.  Legislation needs to protect student loan consumers when they enter these usurious contracts in order to obtain an education or when they cannot get work in the field of choice after they paid for the (worthless) education.  What we have now in this country is lifelong servitude to the federal student loan creditors.

      I attended UOP McGeorge School of Law in Sacramento, California from 1987-1991. When I was discussing the financial aspects of my education with Adalou Davis, the school financial aid representative at the time, she advised me that the student loans would be like a car payment that I’d have to make for about ten years.  She said I’d be able to pay it off sooner, because the money I’d make as an attorney would more than pay the monthly payments I would have to make on the student loans.  Here I am 18 years later with a student loan debt that is greater by the day and increasing, somewhere around $160,000 (and increasing daily).  It is hard to believe that I’d paid on the debt, because the amount has increased significantly. 

      About two years ago I consolidated my student loans with the student loan creditors.  They gave me a lower interest rate of 4.85%.  Previous to that, the interest rate was much higher.  They promised to send me paperwork detailing the original loan and payments, as well as how the interest on the debt was being calculated.   I got a piece of paper stating that I owed $100,000.  I was shocked.  They told me that I could make payments for 30 years, and I would pay off the debt.  This was so discouraging since I’m already in my fifties, I cannot take care of my children the way I’d like to, and my children need orthodontic work, etc.  I have no savings.  When would I ever be able to retire?  I paid about $500-$600 on the loan each month.  I asked them for a statement at the end of the year.  I wanted to sell the home and see if I could pay off the debt with the equity in the home.  I was incensed when I discovered that the debt was now almost $60,000 more than the balance it had been just two years prior.  I asked them how I would be able to pay off the debt when the balance was greater, even after I had been making payments.  I still did not receive the requested documentation on the student loan debt history and payments.  The people I spoke with wouldn’t even refer me to supervisors.  Many were rude, called me bad names and harassed me when I told them not to call me anymore.  When I asked one student loan creditor representative how I could get some relief from the student loan debts, he told me that only death or grave disability would cause them to wipe out the debt before it was paid off.  They will not reduce interest payments, interest-upon-interest, or penalties.  They refuse to negotiate a lower payment of the federal student loan debts.  This man also reassured me that most people they contacted were in the same predicament as I have been.

      Many people have treated me with disdain when I share that I still have student loan debts that I cannot pay. It doesn’t seem to matter to them that upon graduation from law school, I was unemployed.  I took the bar in 1992 and passed it the first time I sat for it.  I sent thousands of copies of my resume everywhere in the state and several places outside of the state of California in order to obtain employment as an attorney, to no avail.  Around the years 1991-1992 was the time when the major law firms were laying off attorneys because they saw a downturn in the economy. Several smaller firms followed suit.  Many of the firms and agencies were not hiring or laying off employees.  The job market was less than ideal.  McGeorge had only two employers in the community come and interview all of us in the graduating class for the openings they had.  They advised me to go east. 

      I went to Washington, D.C. only to find out that a government legal job that I had tentatively been promised had a hiring freeze on it. President Clinton had put a hiring freeze on government jobs.  Many attorneys in Washington, D.C. had been laid off from their jobs.  I worked in a pseudo-legal temporary job for a while I waited for the job market to turn around.  It didn’t for more than two years.  I then returned to Sacramento and opened my own office.  I was limited in what I could do to help people because I had no had experience in the legal profession as a sole practitioner.  My goal was to be a trial attorney, much like Perry Mason – the show I’d watched when I was younger.  I had nobody in my family who encouraged me in pursuing this career or who could warn me about the financial implications of pursuing this career.  I was in my late thirties and decided to have children, who are my last three.

      I later ended up going through some terrible times and divorce was inevitable.  My spouse at the time had long periods of being unemployed, and I was left to figure out how to keep a roof over our heads and feed the babies.  He had unresolved issues which affected the children and me.  We were homeless at one point and were in domestic violence shelters.  I only tell you this because it relates to my ability to pay back my student debt over the years.  I had three young children to take care of.  I was in survival mode and on my own. 

      I wanted to make our marriage work, but it became impossible.  All the while, I was working and paying daycare for someone to watch three children.  It wasn’t even worthwhile for me to work, but I did.  I had student loans to pay back during all of this time.  I contacted the student loan people and advised them about my inability to pay, but the telephone operators told me that they could not help me. 

      I had paid on the student loans at one point when I could, but I noticed also that the debt did not reduce by any amount despite my payments.  In fact, the interest rate was so high (which the federal loan people refused to reduce) that the interest on one year was $12,000 more than the previous year.  The student loan debt I have is now in the six-figure bracket, at least $158,000 or more and increasing daily.  When I ask the student loan people to explain to me the breakdown of the debt and when I can pay with the interest accumulating daily, they advise me that they do not know.  They promise to send me the paperwork that will explain it, but I have never received any explanation orally or in writing. 

      I was able to get employment in Fresno as a public defender in November 2006. I started out at a low salary ($39,000), but I was advised that the salary would increase to $8,000.  They advised me that the California legislature was working on a student loan forgiveness plan for public defenders and others who worked in the public sector.  I was interested, because I was one of those attorneys who had been searching for any opportunity to pay back the loans.  Our salaries in the Fresno County Public Defender Office remain the lowest in the state.  We now have mandatory furlough and must pay for our parking and any continuing education that we are required to take to keep our bar license.  The student loan forgiveness plan never came to fruition, although they do have it available at some of the other public defender offices in the state.  I understand now that it is sitting in the legislature with no funding approved.

      When I was in a domestic violence shelter, I was offered a scholarship to go to school to become a teacher.  I was not expecting this, but I took the shelter up on the offer and attended National University.  They also offered forgiveness of student loans if I went into certain areas, such as special education.  I pursued that avenue.  I worked as a teacher for awhile.  This was great, because although the pay was as low as I make now as a public defender, I did not have the day-care costs that I had previously had for three children.  I do not have any family in the state.  My ex-husband lives in Huntington Beach and at all other times was living and working in other places in the state. 

      My ex-husband had significant credit card debt from a prior marriage, and we both had student loan debt.  We filed for bankruptcy in February 2001. We included the federal student loans on the list of debts.  Henry Nunez, the attorney who had prepared all of the bankruptcy paperwork advised us that we could try to get the student loan debt canceled because of our circumstances.  He also said that many doctors and lawyers had gotten their debts wiped out in bankruptcy in the past.

      I have contacted many people in order to try to pay off my debt.  I am not a credit card person.  I do not like debt.  There was a time in my life that I never had any debt or owed anyone any money.  I am involved in Christian ministry and do not want any debt.  Part of the reason is my age, my inability at this point to help my children in pursuing their college education, not to mention lack of retirement, etc.  I cannot survive in the current circumstances.

      I had a car accident in 2006.  I was rear-ended on the freeway three years ago with my children in the car.  It was a Saturn car that I owned free and clear.  The insurance company only paid me what they thought the car was worth.  I couldn’t go out and buy a replacement car, and I needed transportation.  What did I do?  I went and got a car from a car dealership.  Nobody else would work with me.  I had no disposable income, and the banks wouldn’t give me a loan or anything. 

      About three years ago, I even married a man who supposedly was a handyman.  Little did I know at the time, but he had a severe drug addiction – meth, marijuana.  This man lived with his grandmother, mother and sister.  They told me that he was a hard worker and could fix anything.  He and his family lied to me.  He stole blank checks from my home and wrote checks for about seven months before he was caught.  The amount came close to $5,000.  He wrote the checks to himself.  At first the bank representative didn’t want to work with me, so I went to her supervisor.  He advised her that she had to refund the money.  I also had contacted the Office of the Comptroller of Currency involved.  Two days after that contact, I got my money back.  The bank representative was furious and closed my account.  This man refused to move into my Selma home unless and until I signed the home over to both of us first.  He wasn’t paying me any money, and I thought he was using his income to support his grandmother.  I probably would have signed the house over to him when it had some equity, but fortunately I was protected.  He had the key to the home and destroyed much of the inside of the home on one of his drug binges when we were not there.  He destroyed a bathroom, walls, a garage door and plumbing in one day.  The damage was too costly and was never repaired.  I had no money to do anything.  I was able to get an annulment after that.  I was heartbroken and was left in a worse situation than before.  The suggestion by some well-meaning people to marry a man who could help me turned out to be bad advice.

      I am a pastor and an associate chaplain in the jail and have been involved in short mission trips to Mexico and other church-related work for years.  I would love to go on the mission field and this debt is literally preventing me from doing that.  So, it is not just the debt itself that I cannot pay, but being able to realize my dreams and those of my children.  I was told by one of the student loan people that the only way the debt could be worked out would be if I died or I became so gravely disabled that I couldn’t work the rest of my life. 

      How is it that the other two debts that are not dischargeable in bankruptcy, namely income tax debt and child support, do provide for relief to debtors.  Many with these debts are able to pay pennies on thousands of dollars owed and get the rest discharged.  Yet the federal student loan creditors have refused to do anything to help me and others.  The creditors are making huge profits on this.  I cannot pay these loans in my present circumstances.  About two months ago, the student loan creditors began garnishing my wages.  They submitted a document to the county payroll department stating that they had a right to garnish my wages.  I never got notice or a hearing prior to the wage garnishment.  In fact, if I hadn’t gone to the bank on another matter, I would not have known that my wages were being garnished.  Not only have I been denied bankruptcy protection afforded to others, but my constitutional rights have been violated and no legal remedies exist for me and others in similar circumstances because of student loan debts.   
 

      Paula McKibbin   6/16/09