No degree, huge debt: Student struggles with six-figure loan

After a costly stint at the University of Miami, Joel Solomon left school with a double dose of financial misery. He had no degree but massive student debt.

Solomon owes nearly $212,000 for student loans he took as a music major. Now 28 and living with his parents in Royal Palm Beach, Solomon is pursuing a degree in information services at Palm Beach State College.

His tale serves as a sobering study in just how much financial trouble young, unsophisticated borrowers can create for themselves. Solomon said he’s not certain precisely how much he borrowed, nor at what interest rates, nor how many of the loans are from the federal government or private lenders.

“I honestly didn’t know what the hell I was doing,” Solomon said.

Most students navigate the financial aid maze more successfully than Solomon did, but student debt loads are soaring nonetheless. Bachelor’s degree recipients from the class of 2015 graduated with an average student debt of $35,051, according to The class of 2000 owed $17,297, meaning average student debt has doubled in just 15 years.

Confusion about student loans is common. Fully 30 percent of students ages 17 to 20 are uncertain how much they’ve borrowed in student loans, according to the results of a survey TD Bank released Wednesday.

Americans owe more than $1 trillion in student loans, a debt load that has been blamed for weak household formation and the near-disappearance of first-time home buyers from the housing market. The National Association of Realtors said this month that the share of first-time buyers has fallen to a 28-year low.

“With a median amount of student loan debt for all buyers at $25,000, it’s likely some younger households with even higher levels of debt can’t save for an adequate down payment or have decided to delay buying until their debt is at more comfortable levels,” National Association of Realtors Chief Economist Lawrence Yun said.

Solomon said his credit score has taken enough of a hit that he has been rejected for credit cards and couldn’t get an affordable car loan.

A talented singer, Solomon attended Dreyfoos School of the Arts in West Palm Beach. He was ecstatic to win acceptance to UM’s music program, and he received a scholarship to cover a small part of his costs.

Solomon said he struggled to keep up with his course work, and he took out loan after loan to pay his tuition. His parents helped guide an older son and a younger daughter through school with little debt, but while Solomon was in school, they were preoccupied with their own health issues and the health problems of their parents.

“The world caved in on us for those two to three years,” said Randi Solomon, Joel’s mother. “We dropped the ball.”

Also complicating matters is that Joel Solomon has Asperger’s syndrome, a disability his mother said affected his ability to analyze the loans he took.

Solomon’s debt has grown over the years as he has accrued late fees and interest charges. During an event at Palm Beach State College this month hosted by U.S. Reps. Ted Deutch, D-Boca Raton, and Lois Frankel, D-West Palm Beach, Randi Solomon cried as she described her son’s debt.

“I’m like so embarrassed by our situation,” she said.

Six-figure debts aren’t unusual for doctors and lawyers. Virginia Murphy, an assistant public defender in West Palm Beach, told The Wall Street Journal recently that she owes $256,000 in student loans. Murphy has a clear strategy for dealing with her debt: If she works for 10 years as a public defender, her federal loans will be forgiven.

But it’s unusual for an undergraduate to pile up a six-figure debt load, said J.L. Winn, chief executive of TrustRight Student Loan Services, a Boynton Beach company that helps borrowers navigate federal loan-forgiveness programs. Still, he said, many students take more debt than they should.

“It starts with, ‘Gee, let’s put our kid in the best possible school. Why would you go to PBSC when you could go to UM?’” Winn said.

Student debt can be dangerous because loans aren’t tied to a borrower’s ability to repay. Mortgages and car loans require collateral, and credit cards impose income requirements, but students can load up on loans no matter what their grade point average or major.

“You don’t have to prove that you can pay it back at some point,” Winn said. “It hurts the kids for life.”

Unlike other types of debt, student loans can’t be discharged in bankruptcy. Solomon works full-time at a law firm, but his $12-an-hour wage makes it tough for him to afford his $1,200-a-month loan payment.

Federal loans let students repay based on their income, but private student loans don’t offer the same flexibility.

Solomon now is enrolled at a school that has begun discouraging students from taking on debt. Loans to Palm Beach State College students fell nearly in half last year. PBSC students received so-called unsubsidized loans from the federal government totaling $8.5 million in 2013-14. For the 2014-15 school year, that sum fell to $4.6 million.

“We’ve made it harder for you to take out a loan,” said Peter Barbatis, the school’s vice president of student services. “Some people don’t like that.”

Palm Beach State College requires an interview for students who take loans, and the school also urges borrowers to take an online orientation.

Low-income students can attend Palm Beach State College for free, Barbatis said. The school’s tuition is $101 an hour, or about $3,000 for a year of classes, and federal Pell Grants are worth $5,775 a year.

“Free community college already exists,” Barbatis said.

Many parents and students prefer more prestigious schools, Barbatis acknowledged, even if attending them requires taking out loans. But Randi Solomon said collection calls from student lenders have turned into a nightmare.

“It’s like I’m dealing with a loan shark,” she said. “He’s never going to be able to get away from this debt.”

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