The costs of the ongoing credit crisis have been well chronicled. But there’s a bright spot, too.
In a crushing blow to lobbyists, bankers, and loan intermediaries, the credit crisis and the accompanying collapse of the securitization market may actually force a top-to-bottom overhaul of this country’s much-maligned student loan system.
If that happens, prospective student borrowers may no longer have to face a lifetime of indentured financial servitude, and the U.S. higher education system may finally get a long-overdue makeover.
When it comes to the ongoing financial crisis – of which the frozen credit markets are a primary casualty – one of the only positives to date has been a total bypassing of the bankers and loan facilitators that had been pushing student loans for college and graduate-level studies. In the new era, the federal government itself plans to take over the bulk of the lending duties.
While the prospect of fewer private lenders lowers the total pool of available student loans, U.S. President Barack Obama’s new budget proposes to fill the void by having the federal government take over most student lending. The proposal is not a budget-buster, because the government already finances or guarantees most student loans. A “Student Loan Bill of Rights” may even emerge from this credit conflagration.
A Lot of Anger
From a financing standpoint, the greatest impact of the credit crisis has been on the securitization market. Student loans are originated by private bankers and government-sponsored intermediaries, and are packaged into “asset-backed securities.” The government guarantees repayment of the underlying loans in many of the security pools.
Securitized student-loan pools are sold to investors and the proceeds of those sales go back to the originators, who then have more money to make more loans. The credit crisis brought the securitization markets to a complete standstill.
The 2007-2008 school year was the most difficult year on record for student borrowers. The Massachusetts Educational Financing Authority was unable to meet loan commitments, forcing 32,000 students to seek alternate funding sources. Another non-profit lender, the Michigan Higher Education Student Loan Authority, stopped making loans. Major banks, including: Bank of America Corp. (BAC) and Wachovia Corp., have exited the student loan business altogether. So did Northstar Education Finance Inc. and CIT Group Inc. (CIT), two other active student loan lenders.
More than 100 student-loan lenders withdrew or ceased operations from 2007 through 2008, according to Finaid.org, a financial aid Web site catering to student borrowers.
Then there’s the giant of them all, SLM Corp. (SLM), commonly known as Sallie Mae. This onetime government-sponsored enterprise (GSE) was privatized in 2004 and manages more than $130 billion in student loans for more than 10 million borrowers. Like many student loan providers, SLM originates federally guaranteed loans under the Federal Family Education Loan Program. And like many other student loan lenders, SLM has experienced its share of controversy.
In 2005 , a former Sallie Mae employee alleged in a federal lawsuit that the company engaged in “a pattern and practice of granting forbearance in a purposeful effort to increase total student loan debt.” The particularly onerous practice – by Sallie Mae and many other loan management and servicing companies – of extending and consolidating loans for borrowers for substantial fees and at higher interest rates has gained national attention. A year later, CBS News’ “60 Minutes” profiled Sallie Mae and its controversial business practices.
But when it comes to the ire of student borrowers, as well as watchdog groups, Sallie Mae is certainly not the only target. In 2007, New York Attorney General Andrew Cuomo launched an investigation against Citibank, The College Board, EduCap and Nelnet – alleging deceptive lending practices. Sallie Mae eventually agreed to a new code of conduct and donated $2 million to a fund to educate borrowers about student loan options.
The pain inflicted on student loan borrowers and their families is chronicled at www.studentloanjustice.org. Alan Michael Collinge, the founder of Student Loan Justice and the author of the book, “The Student Loan Scam,” says many borrowers come to realize that they’ve been essentially condemned to indentured servitude. Lenders and servicers have paid enormous sums to their lobbying armies to generate legislation that disallows refinancing of student loans, provides for the garnishment of wages, social security and even disability benefits, and worse.
The Overhaul Game Plan
In May 2006, then-U.S. Sen. Hillary R. Clinton, D-N.Y., with substantial input from Student Loan Justice, introduced a Student Borrower Bill of Rights (Senate Bill 511). The bill was reintroduced the following year but was overcome again by lender lobbying. Perhaps the Obama administration will embrace wholesale changes in how student borrowers are treated and offer them a way out of debtor slavery.
Financial aid to students is different from other types of consumer debt, which can facilitate – or even encourage – overconsumption. And the fallout from the tight-credit environment has a substantial long-term social cost.
For instance, some of the hardest-hit for-profit schools offer vocational training in such potentially valuable areas such as nursing and computer-technology. And these schools typically cater to lower-income students with lower FICO credit scores and higher default prospects. Providing affordable loans to students and a realistic timetable and payback arrangements will further the education agenda the United States needs to make a priority in an increasingly competitive job market.
While the credit crisis is to blame for our deep and devastating recession, the one silver lining may be an opportunity to permanently sideline profiteering banks and student loan intermediaries from feeding at the federal trough even as they stand on the backs of indentured-student borrowers.
The Obama administration’s budget proposes to eliminate private lenders from the market and to have the federal government provide direct loans to students. By eliminating the subsidies to well-heeled intermediaries, the government can reconstitute the U.S. Department of Education, fulfill its promises to promote – and actually facilitate – higher education and not disadvantage workers who too often pay dearly for skills they desperately need.
[Editor's Note: Money Morning Contributing Editor Shah Gilani is a retired hedge fund manager and an internationally recognized expert on the credit and financial crises that continue to sweep the globe. More than 2 million readers have perused his analyses of deregulation, problems with the debt-rating process, and the bailout and stimulus plans put forth by the Bush and Obama administrations. Indeed, Gilani just unveiled a banking-system repair plan that he says would fix the U.S. financial system - and at a much lower cost than the government bailout plan now being proposed.
Gilani is also the editor of The Trigger Event Strategist, which identifies profit plays that continue to be created by "aftershocks" from the financial crisis. Uncertainty will continue to be the watchword for at least the first part of the New Year. Little wonder, as the global financial crisis continues to whipsaw the U.S. financial markets in a manner that hasn't been seen since the Great Depression. It's almost enough to make you surrender and give up the investment game forever.
But what if you knew - ahead of time - what marketplace changes to expect? Then you'd be in the driver's seat right? You'd know what to anticipate, could craft a profit strategy to follow, and could then just sit back, watching and waiting and finally profiting from the very marketplace events you anticipated.
That's just what Gilani, a nationally known expert on the U.S. credit crisis, attempts to do with the Trigger Event Strategist. He has predicted five key "aftershocks" of the financial crisis that he says will create substantial profit opportunities for investors who know just what to look for, and how to play the. In the Trigger Event Strategist, Gilani uses these "trigger events" as gateways to massive profits. To find out all about these five financial-crisis aftershocks, and about the profit strategy they feed into, check out our latest report.]
News and Related Story Links:
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Reuters:
NorthStar Education to suspend FFEL lending: report. -
Wikipedia:
Asset-Backed Securities. -
Wikipedia:
Securitization. -
Wikipedia:
Government-sponsored enterprise. -
WashingtonWatch.com:
Student Borrower Bill of Rights (Senate Bill 511).
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I’m not sure I get the whole premise here, I don’t think it was necessarily bank greed (sure there are always incidences of this in our society – of inappropriate lending practice) but to call it indenture service is a bit dramatic, in fact quite. The reason that kids are in debt is the nature of the product. Lending to those that have no established credit and in most cases are totally unsecured loans. Who would lend to these populations at the rates that they are currently receiving — currently fixed rates all under 8.5% for as much as 25 yrs and many even lower at 6.8%. The larger debt burdens come from caps the gov’t imposes on those products, leaving a large gap to fund to pay for tuition, room and board, and other cost of attendance. Unless parents are willing to take loans or leverage their equity or have resources to dip into, the gap must be funded somehow and in our free market society there are products and choices that offer fair options for those willing to seek them out. I don’t see how moving this to the federal gov’t (who has never exhibited any from of efficiency – and we don’t need larger gov’t) – education is not an entitlement and we don’t need more handouts – will alleviate that of which you refer (debt). Unless they move to hand outs which I don’ think benefit the tax payers in the least. The answer in my opinion is to continue to allow the free market to sort itself out, but perhaps with more scrutiny and oversight, or a balance of Federal Lending Programs, but the foundation of our system is based on competition and choice and the reputable companies can work with the Feds and present solid options for education lending. Not to mention the problems Obama is trying to address, mainly job creation, he’d only be contributing to significantly by killing an industry that would effectively be throwing out the baby with the bath water to prove a political point or advance a political agenda.
And so now those students can become indentured servants to the government?
This is another example of the government creating a problem, then coming in (as if it were a savior) and creating an even larger government bureaucracy to “fix” the problem.
In the end, it’s all about control. They want it all.
Thank you for getting to the heart of the matter. Sallie Mae, with the entire guaranteed student loan industry riding its coattails, has engineered a massively corrupt and unjust system of profiteering unprecedented in our nation’s history. There are no reasonable controls – or limits – on student debt inflation. What’s more, Sallie Mae has lobbied successfully to have every standard consumer protection stripped from student borrowers — the same protections enjoyed by every other class of borrower. The result is a huge and growing caste of second-class citizens consigned to a form of indentured servitude hitherto unseen. Perhaps even worse, because of unchecked conflicts of interest and feedback loops in the collections industry, defaulted borrowers are vastly more profitable to Sallie Mae and these other lenders than are borrowers who can pay. These lenders thus have every incentive to push borrowers, now shorn of all defense, over the edge whenever they can. And in the end, it is us American taxpayers who are expected to foot the bill.
While we’re add it, why not make the Federal government the lender for every type of credit: mortgages, credit cards, small business loans, auto loans?
This would be consistent with Mr. Gilani’s logic that overextended borrowers are in bad shape solely due to greedy lenders.
As a former Hedge Fund manager, I am sure Mr. Gilani is a very good judge of character.
In the last 7 years, I’ve paid $106,000 on a $60,000 loan, but I still owe Sallie Mae over $98,000 as of today. If that isn’t corporate greed, what is?
I could leave the country if I wanted to, since I have dual citizenship (American & Irish), but why should I have to live in exile when I’ve already paid back much more than I borrowed?
A man named Isaiah spoke these words over a thousand years ago:
“Woe to those who make unjust laws, to those who issue oppressive decress.”
It’s as true now as it was then. The student loan industry as we know it will cease to exist. We WILL have justice.
The Direct Loan program will add $1 trillion to the national debt, eliminate thousands of private sector jobs, and cost students and taxpayers more.
And for no good reason. The FFEL program has worked for 40 years and, with a few modifications to reflect the credit crisis, will work for 40 more.
Yes, the government should take over all the lending that is needed for basic human needs. That includes education and housing. Other forms of lending that are speculative in nature, such as commercial real estate, can still be handled by greedy bankers in the guise of free market capitalism. There is still trillions of dollars available even in the smaller slice of the lending market for those whose purpose it is in life to accumulate the most money.
You get your electricity from a regulated public utility and you don’t see CEO’s of public utilities making $100 of millions of a year by profiting off of a basic societal need.
I have no problem with anyone making $100 million a year, but not at a detriment to society. And the only way to make sure society functions for the good of the people (and if you don’t think that is necessary, please move to a cave in the mountains), is not let greed control the pricing and delivery of basic human needs.
The FFEL program has worked well for 40 years ? For who ? Well let’s see. The government ? Well if you consider billions of dollars in outstanding debt that borrowers are unable to pay back due to prohibitive late fees and interest a success, then yes it’s a great success. For the lenders, collection agencies and guarantors ? By their own addmission they have made tremendous profits off of the usary fees associated with defaulted loans. I guess that could be considered a success.
For the student/borrower ? Hmmm….graduating from school without a job and 10’s if not 100’s of thousands of dollars in debt. Those unable to meet the terms, cast into a position of exploding debt amounts that are completely unmanageable. Thousands leavinf the country. Many commiting suicide. While the original intent of this program may have been noble, the reality for many thousands has become a nightmare. Before you make judgement, get educated…just don’t borrow to do it, it could really cost you.
Ignorance and poor information…I want to point out three very incorrect facts that lead to misunderstanding and anger towards the lenders.
1. when a student defaults on a student loan it is the Government, not the lenders who garnish the wages including disability.
Banks lend, governments (federal and state) guarantee the loans. The bank is obligated to comply to all the required rules to service and collect these loans, if any of these are missed are performed incorrectly the guarantee is lost and the loan is “gapped”. Gapped loans are now 100% on the lenders books with no reimbursement from the feds. Those gapped loans are not subject to the garnishment you mention.
2. The profitability of student loans is extreamly low. In fact the profit margins are so small most banks would prefer to not participate in the program going forward which is why you see so many lenders leave the market. I agree at one time in history student loans were cash cows for the banks, but those days are gone due to numerous regualtory changes over the past 5 years. The lenders remaining in the business are either commited to the Student population to ensure they can pay for school.
3. The real problem is the cost of education…ever wonder why the schools are so quite and don’t speak out against the big bad lenders? its because they are afraid the spot light will be pointed at them. Tuition and room and board have increased at a rate about 25X higher then inflation or cost of living. The only reason students have so much debit is because of the scam the schools run. God forbid a student changes schools, the loss in earned credits can cost you thousands. Why is that allowed?
The Student loan program is extreamely complicated and mostly because of government regulations but there is one thing for sure the major issues in this market are not Lenders while I would agree thate there have been some lenders who give the industry a bad name those are not the majority and they have been dealt with!
I am a Democrate who voted for Obama and am very lberal on social programs but I have to tell you you have it all wrong…spend sometime and do some real research!
Lisa wrote:
“I am a Democrate who voted for Obama and am very lberal on social programs but I have to tell you you have it all wrong…spend sometime and do some real research!”
Sorry, but my research and my facts have it right.
FACT: I’ve paid $106,000 on a $60,000 loan, and still owe at least $98,000.
FACT: That’s almost 2 1/2 times the original loan amount (240% profit). My debt is still growing.
FACT: Congress amended the Higher Education Act (HEA) at the express request of the student loan companies, Sallie Mae in particular. The loan companies weren’t reluctant participants; they initiated the changes. Why? Because of the enormous profit potential.
FACT: Costs of higher education have increased. And some colleges/universities have profited directly from the student loan industry’s practices. They and the loan companies collaberated.
CONCLUSION: The student loan companies, colleges & universities, and Congress acted together to create the current situation. And only Congress can change it. Sallie Mae won’t. Not when there’s possible profits of 200%, 300%, or even 400%.
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I took out $15,000 in loans and now–25 years later–am just about to pay off the interest portion after a default. (The default was caused by “we never received your check.” Since the check was “lost” I could not prove it sent.)
This is a great article and great discussion. I would add only one thing: the IRS has given up the use of private collection agencies. This would help student loans as well. At least all repayments would actually go to the one who made the loan under Obama’s plan.
Perhaps the Obama administration will embrace wholesale changes in how student borrowers are treated and offer them a way out of debtor slavery.
Debtor slavery indeed. I hope the Obama administration will restore basic consumer protections to those who borrow for their education.
And I hope it is retroactive. Because of illness, I was unable to pay the principal on a $27,500 loan. Because of a fixed 9% interest rate, the amount I owe to Great Lakes Higher Education is now $96,000. I know someone whose debt now approaches $200,000. Sanity must be restored to this situation.
Galloway–you’re in the wrong forum. You have private loans, not FFELP loans. You basically signed on for credit card interest rates and terms, that’s the only way you could have generated so much in interest (and penalties?) in seven years. If you could have borrowed more cheaply, you would have–no? The only conspiracy you can cry about is having bankruptcy removed as an option for you on those consumer loans. Calling them student loans got them that protection. The author misses the point totally by not calling out the high price diploma mills that push these loans and “graduate” folks with no better employability, but big debt. Maybe Galloway went to University of Phoenix? Devry? ITT? Getting warm?
Student loans are a perfect storm of unchecked tuition costs, zero risk lending by the Sallie Mae’s of the world as it’s backed by the government, and the practice of compound interest on unsecured debt. Add in double digit unemployment and you guarantee these loans will not be paid off I don’t care who holds them even the US government.
The real nail in the coffin that nobody talks about is the negative amoritization. Negative amortization kicks in immediately while the student is in school. No payments while in school sound great until that principal has ballooned. Reduced payment plans and forbearances sound great during those first few years after college until that principal keeps ballooning. Other practices are possible such as interest that accrues but is not compounded into prinicpal.
When you have colleges and universities with multi-billion dollar endowments who 1) still have tax-exempt status, and 2) put “tuition” towards buildings, real estate, and inflated professor salaries they should not be charging such over the top tuition but asbsorbing it themselves. Do you realize third tier schools charge similar tuition as the first tier schools? Yes the lending industry, colleges and universities, and government policy have been in cahoots to the detriment of the students who already have financial indentured servitude for life. The effect is wide spreading and ever expanding.
I the early 80’s, I took out $70k in loans for my Ph.D. which ballooned to $129K by the time I finished my program in 1990. My first job out of school at an Ivy League school paid $33k. 50% of my take home was required to pay the loan. Over the years my salary never kept pace with the payments. When the payments exceeded the amount I lived on I gave up. Because of legislation, there is no re-negotiation or restructuring of the loan, even with a demonstrated inability to repay, except smaller payment plans or forbearance, which have the net effect of ballooning the principal to unimaginable levels, and impossible-to-pay levels. For years this went on until finally, at age 50, I was sued by the Department of Justice for $250k loan. We are currently working on a settlement because it is “now apparent to all” how unserviceable this loan is given my income history. Although I had nothing to discharge, I had to file for Chapter 7 as a legal strategy to get into the bankruptcy courts where the judges there apparently have more discretion in my state.
I think the student loan industry will be the next wave of credit implosion, and the bankruptcy laws will have to be rewritten. Repayment options may change the compound interest to another method as well as write-offs for community service for example.
For all intents and purposes, this type of lending, and especially repayment practices are nothing short of a modern day version of PREDATORY LENDING. No where in the credit world of unsecured debt does interest perpetually compound once the borrower has shown a definite inability to re-pay.
Private and government backed student loans are the same in that both lenders have protections that no other credit organization has: they BOTH can lend month with NO RISK. The both make profit off default (25% of the original loan amount) so there is no incentive to prevent default. I know. It’s happening to me. My debt has gone up over 50% (from $120,000 to $189,000 in 5 years) and the debt is still growing. Borrowers are drowning and there is no relief. I make less than $30,000 a year, but I’m expected to pay nearly $2,000 per month (more than I bring home). I don’t know the stats, I only know my situation. I have no hope.
Lot of naive viewpoints here. So let’s clear this up.
Sallie Mae, et. al. make money through loan default and capitalization during deferment. When the millions who end up in default get their final bill, the the loans have doubled or more. Sallie Mae et. al. add late fees, penalties, then crank the interest to 18% or more. After a time, those fees and interest are capitalized. Then, the lender puts the loan back to the government – the $20k loan that was guaranteed by the taxpayer is now a $40k bill.
There is no free market in student loans. It begins with the student loan administrator at the school Most have “deals” with certain lenders. In the last 24-36 months, administrators at USC, Columbia, Johns Hopkins, U of Texas, Emerson, and others have lost their jobs over financial kickbacks and other items of value they personally received from their “preferred lenders.”
Student loans are afforded less consumer protection than any other loans by a longshot. Various politicians such as Buck McKeon, John Boehner, and Lamar Alexander have taken tens of thousands of dollars from loan providers to provide such protections to the middlemen such as Sallie Mae and Nelnet.
Sallie Mae is the group commanding the most attention given the arrogance and greed of their CEO. Everyone was all indignant when the auto industry showed up for taxpayer bailout funds in their private jet. Sallie Mae has THREE private jets. Their CEO has two mansioned estates, one with his very own private 18-hole golf course.
Yeah . . . you’re probably right. This situation is the student’s fault.
We can change the student loan industry. Join Student Loan Justice and make your voice heard. Click on my name for the link.
FACT: My ALLEGEDLY defaulted student loans (still waiting for copies of promissory notes) are being “serviced” by a collection agency that has a SHARK TANK in its lobby: http://www.premierecredit.com.
FACT: My ALLEGED student loans, in the principal amount of $19k, have exploded to over $50k, including over $10k in “fees and costs” payable before interest and before principal to aforementioned collection agency. These “fees and costs” are to defray the costs of “locating [me] for collection purposes.” I have lived at the same address and have worked at the same job for over 5 years.
FACT: Student loans, high treason, and murder are the only three things in American jurisprudence for which there are no statutes of limitations. Eventually, even rapists and kidnappers are off the hook.
If the Federal government really wanted to correct things in this area, the first thing to examine would be university tuition costs and increases. How can an industry survive with continual increases at over twice the rate of inflation if there isn’t government protection involved? If the cost of the service (education) was to properly reflect a free market, then the cost would be dropping relative to inflation. But the costs keep increasing.
If these costs would then decrease, then the amount of loans required per borrower would not be as high as current. This would give the borrower a better chance of payoff.
Those, such as JR, who claim not to understand the premise, are obviously clueless. I am 45 years old and originally graduated with my BS in 1986. Since that time, the student loan industry has changed dramatically. I hope those such as JR are not evaluating today’s situation by what might have been in the past.
For example, it use to be that student loans were to close the gap between grant money and tuition. For several years (and for many students) back in the 80s I needed ZERO student loans. I had a par-time job and the financial aid I received covered it.
THIS IS NO LONGER THE SITUATION. Today’s student is forced to take out loans because there is not enough grant money. A student simply cannot work more than 20 hours a week and hope to do well. Sure, there are some who do, but most cannot—especially if they are attending a real school and not one of those proprietary diploma mills where they grant As for merely attending.
The schools now know, and operate knowing, that student loans are freely available, hence they raise tuition year in and year out. Sometimes they will even raise tuition semester to semester! They know the student is faced with one of two choices, take a loan or quit school. A few choose to quit. The schools (if they are reputable) have no shortage of potential students waiting in the wings eager to borrow for the chance of a better life. Our society ingrains in people virtually from birth that a college education is a must to have any chance at an above average life.
In fact, today it is common to even suggest that a BS is what a high school degree use to be, hence, there is even some pressure to go on to get a graduate degree. The schools themselves are complicit in fostering this need for a graduate degree.
Now in graduate school the alternatives are even fewer. Some, have the good fortune of getting fellowships, however, others must finance their degree 100 percent! In addition, if it happens to be a degree requiring a thesis or dissertation, the committee can easily add an extra year to two years to the degree program simply because they want to keep the student around to finish THEIR RESEARCH! If you do not think that professors do this to students then you are clueless.
Furthermore, many quality colleges are into INTERNATIONAL DIVERSITY! What does that mean? It means they grant fellowships and graduate assistantships to foreign students at the EXPENSE of the American citizen or permanent resident. The citizen is offered DEBT.
If you believe that a college degree is what a high school degree use to be and society has traditionally paid for a high school degree, then isn’t it about time that we consider that society pays for a college degree? Again, society paid for what was then the standard education level to survive in a manufacturing society. We are still stuck on that model. We need to pay, as a society, for college because it benefits all of us. Just like paying for a high school degree benefited all of us when a high school degree mattered.
At the very least, bail out these people by allowing those who qualify to retroactively amend their bankruptcy to include student loans!
Die Sallie Mae…Die
Seattle public televison station ran a very well done show about the student loan industry. Here is the link:
http://kcts.org/video/borrower-beware
Send this to everyone you know who’s affected by the corrupt student loan companies, including college & university staff.
Obama’s silence on this is deafening!!! Who gives a crap about AIG. Stimulate the economy by forgiving student loan debt! I was hoping he would be more sensitive to this issue, but then again, his degree from Harvard has paid off for him.
I totally agree that “Obama’s silence on this is deafening”. I haven’t heard a peep from him as to what he is going to do to help those of us who can’t consolidate or refinance private student loans. In fact, I called on of my private lenders, Wells Fargo, to see if I could put my loans in forbearance for a few months. Their response was “for private loans there are no forbearance or deferment options available” and if you don’t pay, it will hurt your credit rating. HA!
Let me tell you, I am trying to file bankruptcy knowing that my private loans may not be helped, but I just ran into an issue with bankruptcy – we do not qualify for chapter 7 because we failed the unconsitutional means test and guess what? We don’t qualify for chapter 13 either because our unsecured debt is over $336k (there are debt limits for ch 13). So, the only option is chapter 11 which is used for businesses and as an individual, I cannot afford 20-50k to pay a lawyer to file for ch 11.
Our system is rediculous. Nobody, not even Obama is going to help us.
If college loans (and college loan debt) were not about control and keeping the middle class in its place, the first bailout would have been for all of those students, ex-students, and families up to their necks in college-loan debt.
Ezra Pound wrote: “With usura hath no man a house of good stone.” I might add that he also does not have the ability or time to dream or innovate because he may have to take a job or the first job that comes along in order to pay the vig.
I just paid off my $11,000 student loan and it cost me $26,000 to do so,, i did not even get a thank you.
Nor did i ever get my diploma..
I hope these people are held to some accounting.. whom ever they are!
Never get a sallie loan…. EVER. i had a credit score 300 for ten years while i paid it off. I could not even get a bank account.