A (Admittedly Awful) Solution For Those of Us With Student Loans

Early this year, The Claremont Independent's Michael Wilner reported that Claremont McKenna would be eliminating student loans.

Like at most of the highly selective colleges, this is meant at attracting students to those colleges. (Of course if they really want to attract students and produce quality education, they'd cut costs and make the school run more like a business instead of the subsidized country club experiment that it often becomes, but I digress.)

I don't pretend that Claremont McKenna was at all influenced by this 8th circuit case, of Educational Credit Management Corporation v. Laura Susan Reynolds (2006) but still it's worth pondering, if only for history's sake. (The Supreme Court denied cert.)

Laura Susan Reynolds was a Claremont McKenna graduate who suffered from depression and despite graduating law school and college.

The debtor, Laura Susan Reynolds, is a graduate of Claremont McKenna College and the University of Michigan Law School. She was admitted to practice law in Colorado, but eventually settled in Minnesota, where she took temporary jobs as a secretary and then held a variety of non-legal jobs. . . . . At the time of the bankruptcy proceedings, she was a secretary-receptionist making about $30,000 a year. At the same time, the debtor's husband was a bus driver earning about $29,000, paid over the nine months of the school year . . .

Her life gets a bit more depressing according to this justia piece.

Reynolds began suffering from depressive symptoms as early as middle school and high school, but did not receive treatment or diagnosis at that time. During her junior year at Claremont McKenna College, she suffered a mental health crisis while traveling in Scotland and had to drop out of a study abroad program; on arriving home, she was treated by a psychiatrist for agoraphobia and depression. She received counseling, and, despite a continuing struggle with depression and panic attacks, she was able to make up the missed coursework and to graduate cum laude in 1992. She went on to attend the University of Michigan law school, where her depression worsened, but she nevertheless graduated in 1995, in the middle of her class. She passed the Colorado bar exam and was admitted to practice law in that state.

She undertook an extensive search for a job as a lawyer, participating in on-campus interviews, sending out more than 400 resumes, contacting Michigan alumni, and eventually using a legal employment consultant. Unfortunately, she was never able to find any work as an attorney, other than two hours' work for a friend of her father's. She finally began taking temporary assignments through an employment agency, working as a secretary or administrative assistant. In October 1999, she took a permanent job as an administrative assistant at the St. Paul Foundation, where she worked until the spring of 2001. She left that job, but began another permanent job as secretary-receptionist at a roofing contractor, where she still works, earning about $30,000 per year. She is married, and her husband makes about $29,000 per year driving a school bus.

After leaving school, Reynolds began payments on the loans, but she was only able to make the payments by paying for "everything else" with credit cards. Eventually, she stopped making payments.

Here's another, slightly more interesting version in The Claremont Voice.

Much condensed, the story begins when Mrs. Reynolds began suffering from depressive symptoms in junior high school. The symptoms worsened during her college years. She dropped out of a foreign study program, but kept struggling toward a degree. Despite persistent depression and panic attacks, she was able to graduate cum laude from Claremont McKenna College in California.

She pushed on to law school in Michigan. Serious physical and mental problems continued, but she nevertheless was graduated in 1995 in the middle of her class. After passing her bar exams, she tried doggedly to find employment as a lawyer. Nothing worked. At last, five years ago, she settled into a permanent job as secretary-receptionist for a roofing contractor in Minnesota. There she now earns about $30,000 a year. Her husband earns $29,000 driving a school bus. They have no children.

Well, fortunately for Ms. Reynold and unfortunately for American justice the Eighth Circuit effectively ruled that she was too damaged to pay her loans and allowed her to file for bankruptcy. Here is the question they decided:

Whether a student-loan debtor's emotional stress at having to repay her student loans may constitute "undue hardship" permitting her a discharge [of her debt]

I'm afraid, I'm feeling that stress, piling on. Looks like I'm going to have to default on paying all those loans...