My delinquent student loans are driving me crazy

I'm hiding from collection agents -- even though I have the money!

Published June 11, 2007 10:00AM (EDT)

Dear Cary,

I'm a very lucky gal with a spectacular life that I find myself rather surprised to inhabit. I was a very screwed up teenager -- an L.A. punk kid who hid red wine in the Taco Bell bathroom for drinking binges during my high school lunch period, got stoned nearly every morning before school and slept with whomever would have me. I was the product of parents who had given up any meaningful parenting about the time I was 13 due to my father's all-consuming drinking. At 18, I got pregnant, the product of a relationship with a man I'd met at 15 who was eight years my senior. Quite simply, I was a bit of nightmare.

But it turned out the child I had set me right. I loved her so dearly -- more than I loved myself -- that I found myself suddenly infused with purpose, suddenly wanting to make something of our little life together. I gave up all my partying shenanigans, put myself though college and grad school on student loans and crappy, minimum-wage jobs. The fates really smiled on me as I landed a very lucrative position in software, married a fabulous, stable, high-integrity guy who owns a house, had another great kid with him and I find myself deliriously happy every single day I get out of bed.

With one exception (the bread and butter of your trade, of course, these exceptions): Those loans that put me through school? I never paid those back. I have the money now, stock money I made during the bubble. But it's as though I can't quite join the ranks of the responsible. I wake up nights worrying about these loans, dodging calls from collection agencies, avoiding my husband's pointed questions about the situation (he's an economist ... ironic, eh?). I'm frightened and find all the confidence I've painstakingly built up vanish as soon I get the phone call or even contemplate paying everything back. I need to pry myself loose from this fear, but I don't quite know what I'm afraid of.


More Dollars Than Sense

Dear More Dollars Than Sense,

My thought on this is ... I love paying back money! Really. Paying back money is such a great thing to do. It hurts a little, but it also feels really, really good.

You know why? Well, it's such a comparatively clean transaction. Think of all the things in your past you might want to straighten out, all those crazy things you did that you can't even exactly remember -- things you did to or with people you don't even know are alive or dead now, things you stole from stores that later burned down or went out of business, sex you had with people now dead or disappeared, hurtful words so cutting and true and well-timed that you felt like a ninja assassin when you said them, red lights you've run and insults you've hurled from the highway, all the half-remembered detritus of a life out of control. Think of it all. You could walk your old streets for 50 years handing out dollar bills and apologies and you'd never be sure you'd straightened it all out, because the ledger of the past for the most part isn't in dollars and cents, it's in lives and feelings.

But this is different. Here's a monetary debt, clear and simple, black and white. It's clear how much you owe. When you've paid it you're done.

And look at what you get in return. It's not like this is just one more lonely station in an endless karmic journey. This is bingo! You get a whole new status just like that. You go from deadbeat to upstanding in one easy payment.

I can hardly see a downside.

Well, there is the money, of course. It is money that you have now and won't have later. But your net worth doesn't really change, right? Those debts will always be on the books until you pay them. And they will be hurting your status. They aren't just debts, they're bad debts, delinquent debts.

While I'm not an economist and your husband is, I would think it's common sense that you are financially healthier if you pay off delinquent debts.

Besides, you don't really feel good about that bubble money anyway, do you? You know it's owed. It's nagging at you. It's not fun money. It's bad money. So you can't enjoy it.

Now, there may be significant reasons you did not pay this. I'm not saying that your feelings about this don't count. Even when we're in the wrong, it's healthy to discover those deep, lifelong patterns that underly our aberrant moments of avarice.

Sometimes when we are clearly in the wrong, we are symbolically in the right, emotionally in the right. We may be symbolically righting some past injustice or soothing some past hurt. And the people you owe this money to may be in league with the devil.

That doesn't change the rules. It just provides an opportunity for us to understand ourselves a little better, so that we know we have a weakness for cheating people on cars because we got cheated on a car once, and we learn to feel the impulse before we act, and divert our behavior. We become more aware. So by all means, think about what this student loan money meant to you. It may have represented survival and a second chance. It may have represented something you felt you were owed, and deserved, and were denied. Think about all that.

And then pay it back.

I say make the call today and tell them you're ready to settle.

I almost said, Call them up and pay. But not exactly. Don't be a martyr. If you have rights in the matter, don't give them up. There may be some healthy negotiating to do. If there is an opportunity for penalties or interest to be waived, or if a payment plan is more suitable than a lump sum payment, then do what is legally in your best interest.

But take care of it. Settle it. Stop hiding from the phone. And then go out and celebrate.

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