In this episode, we hear from Chef Ronny Miranda who has, more than most, been burned by the student loan system. When he left school he was given double-digit interest rates and discovered that he owed more money that he didn’t remember taking out. After disputing the additional loans on his bill, he eventually found himself part of two different class-action suits against Sallie Mae (now Navient), where the company was prosecuted for creating fraudulent loans in their customers’ names. Despite having about half of his loans forgiven, his high-interest rate meant that his payments quickly ballooned so that after everything, he still owes double the original amount. 

Despite his higher degree, he found himself unable to find a job that would allow him to afford his high payments. Eventually, he defaulted and his student loans, and the payments were being garnished out of his wages. Ronny shares how his persistent debt has shaped his financial life well into his thirties, and why he thinks most people should avoid higher education altogether. 

 

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Transcript

Nikki: I’m Nikki Nolan. This is A Matter of Life and Debt. A show about people in the United States and their student debt. Today’s episode: Was College Worth it? I talked with chef Ronny Miranda. We had an interesting discussion about college, debt, and if it’s better to just learn on the job rather than going to school.

This is his story. Welcome to the podcast.

Ronny:  Yeah. All right. Talking about the destruction of the American student by two companies.

Nikki: How much did you start out with?

Ronny: So I took out about $30,000 at 7% interest originally. Then Sallie Mae got away with charging me the maximum amount of interest they possibly could at the time. So I was at 10.5%. Then it went up to 11% and then eventually it was 13.6%.

Nikki: So you weren’t on a fixed rate. It was–

Ronny:  They would not allow me to get a fixed rate.

Nikki: Why?

Ronny:  I don’t know, but I tried a few times working with different people.  And it was Sallie Mae-  they would not allow me to refinance essentially. They were just holding onto it. So it’s at 13.6% at $30,000. And then, I wasn’t looking at the statements.

Nikki: Yeah, yeah.

Ronny: I wasn’t looking at them because I was 19 and not really-  I was like, they’re not going to screw me over. 

I found out that the company called CEC, which is the Career Education Corporation.  They go around, they buy up schools and they turn them into for-profit schools. They fire the guidance counselors. All of them get fired. Most of the upper management gets fired. All of the people that do, all the financial work, they all get fired. They bring in their own people who work directly with Sallie Mae, in conjunction with them. 

I ended up having total, about $70,000 in loans. $40,000 of it was then forgiven.

Nikki: Oh, how did you get that?

Ronny: A class-action lawsuit against CEC and Sallie Mae.

Nikki: When was that?

Ronny: This was 2011. What was happening is Sally Mae with the help of CEC was taking out loans for students on student’s behalf without informing the students of this money and using the money-  I’m doing air quotes-  for stuff you were using at CEC, whatever school they owned. But you weren’t getting the money. It was just going into someone’s pocket.

There were somewhere around a 100,000 students that had money forgiven at the time. Cause I never took this money out, I fought it. I was like, I didn’t take this money out. And then they screwed up though.

They were taking out money for former students, people who weren’t- that’s how they got caught because students weren’t actually enrolled at the time.  And they still try to get the money for me for like years until I just had a lawyer friend write a letter.

Nikki: And say ‘Stop’? 

Ronny: And they left me alone.

Nikki: What did the letter – it was just a- 

Ronny: The letter is basically saying that they were harassing me, and they quoted the case number of the class action lawsuit forgiving the money. So they’re like, no, go away or we’ll sue you for harassment- which I probably should sue for harassment, now that I think about it.  I had $40,000 forgiven. They gave me $300 back. I felt good about that $300.

Then, Sally Mae continue to do their criminal acts, so U.S. Government in all their glory stepped in and said, you know what? You can’t do this anymore. Oh, but you’re one of our biggest donors so just change your name.

So now they’re Navient. There’s no difference. It’s the same company.  My account numbers is all- it’s all the same.  So the U.S. Government basically awarded them for being criminals. When I do this, it’s called extortion.

I had Navient and then my rate went up to 13.9%, which was the maximum at the time.

Nikki: Mmm  hmm.

Ronny: And then I was like, well, I can’t afford this. And I lost my job, the company closed. And it was a bad time of year to be looking for a job as a chef.

So, all that. And then I finally found something. I was like, cool, I can start paying them the bare minimum.

Nikki: Yeah.

Ronny: And they want me to pay them like $1,400 a month, so I was like, I can’t afford that. I can’t afford the monthly amount. Like well no, this is your new amount a month.  Well, I’m not paying you then. Well, we’ll come after you. Like go right ahead. You can’t get anything from me. Cause in the state of California, you cannot garnish my wages within a certain amount and you can only take 10%. So come at me, bro.

Nikki: And did they come at you?

Ronny: They tried to. The second they did anything illegal, I called up my lawyer friend.

Nikki: How’d you get this lawyer friend?

Ronny: We dated for a minute. She still likes me enough to do those things for me.

Nikki: Pro tip. Date a lawyer, and then keep them as a friend!

Ronny: Date a lawyer.  They gave up and basically sold my loans at a reduced price to the federal government. So now all my loans are federal loans, at 2.37%.

Nikki:  How did you get 2.37%? They refused to refinance my loans.

Ronny: Mine’s at 2.37%. I don’t know. That’s just what they gave me.

Nikki: I… am…so…angry.

Ronny: And because there was apparently another class-action lawsuit that my name was on that I never, I didn’t even know about, they took another $9,000 off. So I only owe $21,000.

Nikki: Now?

Ronny: Yeah.

Nikki: What

Ronny: I’m on a repayment plan, so I’ll actually be paid off in a little less than five years. But, to go back to the original amount. Okay. the original actual amount pre–

Nikki: — them giving you fake money.

Ronny: Yeah. Before all of that. The original amount was before the interest rate. Oh, they also left the interest rate going while I had an in-school deferment.

Nikki: Oh, fun.

Ronny: For four years. So had interest occurring for four years in school. But my paperwork never said that. So yeah, another wonderful thing to Sallie Mae did. I took out $16,000 originally, that I actually took out and been signed for. $16,000.

I paid off $14,000. I owe $21,000. Do the math on that. 

It’s just- it’s infuriating because people think that, ‘Oh, we’ll student loan companies, you know, they employ a lot of people.’  No, they really don’t. In fact, there was only a handful of student loan companies in the country, and all that money goes to one dude who doesn’t put money into the local economy.

Nikki: Who’s this dude?

Ronny: It’s actually, well, it’s a group of people who own Sallie Mae. They’re actually in, they’re really good friends with Freddie Mac. Who defraud the American public on houses and mortgages and all that.  The mortgage crisis of what 2006, 2007? It started in 2004, and in 2008 they had hundreds of thousands of lawsuits against them. 

And does Freddie Mac- does anything under Freddie Mac? No, they ended up actually they owed money, but because of the way the taxes are set up, they ended up getting more money back.  They were supposed to help pay $100 millino in damages and they ended up getting money.

Nikki: They know the system.

Ronny: It’s amazing. It’s well, they built the system. That’s the thing.  They invest in the right people.  It’s really nuanced, but it’s also really simplistic as to why we have a problem.

Nikki: Why do you think we have a–

Ronny: —simple problem is that every generation, every person before us was trained and drilled into every single day: you have to go to college. Not the proper way to say it. You need an education. You need a higher education in something.

You don’t need to go to college. College is almost useless these days, unless you want to be doctor, lawyer– that’s about it.

Nikki: Yeah. Nurse?

Ronny: Nursing school, but nursing school isn’t college. Nursing school is a trade school.  And then people don’t say, I go to medical school to become a nurse. You went to nursing school, which has its own classification, which is a trade school. Which I’m all for trades schools. I went to a trade school. I went to two trade schools.

Nikki: Yeah.

Ronny: But we have trained everyone. You’ve beat it into us from the day we’re five years old. Which is, you need to go to college because if you don’t go to college, you are nothing in life.

I worked at a Michelin star restaurant for a while, and I’d have kids come in. By kids. I mean they were 23. You know, they come in and the amount of money that they were- because they were taught at their fancy culinary school, how much money they’re going to make when they get out. They fail to say, this is how much money you’re capable of making, not how much money you’re actually going to make.

Nikki: Yeah.

Ronny: I went to culinary school. Awesome. Which one? Greystone. That’s a good school. Awesome. Yeah. So I’ll pay you minimum wage and you’ll get tips and a shift beer.

Oh, you want more than that? Yeah, no. You have no experience. I went to school. Yeah. You went to school. So you have zero experience because the ad says specifically two years experience in the industry or graduated from culinary school. So you have the equivalent of two years knowledge of someone that spent time in the industry for two years.

The only difference is the person who’s been in this industry for two years got paid for their education. You paid for the same knowledge they already got. So you can just go back to school for something else to get more money or I’m paying minimum wage and you get tips.

Which completely defeats the idea of you must go to school in order to do this. You know, Thomas Keller. He went to a really good school. He did, but he also worked at the cafe with his mom when he was a kid, working his way up as a dishwasher. And then he fell in love with being a cook. And he cooked for years before he went to school. And then he even realized that he didn’t have to go to school. He already knew all of it. You know?

Nikki: But he went just–

Ronny: — but also his, when he went to school, it costs one-tenth of the cost now. The same school is like $125,000 for the program and you get out and you’re making minimum wage.

When my grandmother went to school, when my mom went to school.

Nikki: Yep.

Ronny: And it was– you got a job afterward. It’s not the case anymore. Jobs aren’t there. Or the difference is, the first thing that people used to buy before college loans took over our education system, it was a new car.

Second thing they used to buy was a house. And we’re talking  our parents and grandparents generation.

Nikki: Yeah. No, my mom bought a house.  Now we get six months deferment and we can’t even find a job in six months. And the job you get, like my first job out of grad school in which I just paid $121,000, was $37,000.

Ronny: Yeah, yeah, yeah, my mom was making $45k a year in ‘80.

Nikki: Oh, that’s a lot.

Ronny:  It’s a lot from going to trade school and she paid her student loans off– like she took out a loan. It was paid off by her second paycheck. You know? Bought a brand new car.  

My grandmother, she was a CPA for 30 years,  but she also went to- like all good women who were born in the thirties- she went to beauty college. So she had a job for that. And then she bitched and then she went and she became a CPA. She ran two offices. And very ahead of her time, ran two offices and was making plenty of money.

She bought a brand new Cadillac, like right when she got her CPA, the official, like not licensed, but all of her credentials and all that, she was like, boom! Cadillac.  It’s like, you bought a luxury car in the seventies, right out of college.

One of my bosses, he went to Cal Berkeley, Went to Cal years and years ago. You know what he paid for four years?

Nikki: $4,000?

Ronny: He paid $5,000 and he lived in dorms.

Nikki: And you spent $5,000 on dorms. Wow. That’s how much I spent.

Ronny: He paid $5,000 total for school and not counting books, whatnot– just for tuition and a place to live on campus.  He finished up in three years. But still, I mean, $5,000.  I don’t even think you can get a year now, but like a semester cost that much.

 I don’t have any credit cards because I can’t get them. 

Nikki: Why can’t you get credit cards? Cause you’re–

Ronny: — income-to-debt ratio is too high. Not so much anymore, because I basically defaulted on my loans and then they sold my loans to the federal government and the federal government can’t charge me more than a certain amount.

Nikki: Yeah.

Ronny: Which is awesome. Yeah. But it’s also, it’s destroyed my credit score. My income-to-debt ratio was astronomical for a long time. And then just everything– I tried to get a car years ago, I had put down 25% to get a car.

Nikki: I’ve never owned a car, so I don’t know what that means.  Normally you put it down? I actually don’t even know.

Ronny: Like some, I mean, sometimes you don’t have a down payment.

Nikki: Really?

Ronny: Sometimes you just, if you’re credit is good enough, you just start paying monthly payments. Or you put a couple hundred dollars, like- 5% down. You know, high is like 10%, which this time around because my credit has gotten better I had to put 10% down on my car– which wasn’t too bad. Still came out to be $3,000, but better than $7k.  But before, when my credit was really bad with student loans, they wanted like $8,500 down. I was like, I just go buy two used cars for that much money, so I guess not. So then I just couldn’t get it. I’m just not going to have a car.

Nikki: So where were we? We were in a dark hole somewhere and I want to get back into the deep dark hole of the con. The con that is student loans.

Ronny: Well, it starts off who we train people to believe they need to have college.

Nikki: Yes.

Ronny: Then they get out and the jobs don’t exist anymore. By the time you finish school, the job you had has already been replaced. It’s gone.

I have a friend, she went to school and because of student loans and all that, she couldn’t get a job in her career. So she went back to school to become a lawyer just so she could pay off the money that she borrowed from a different degree. For every soul-crushing case she does, she does two pro-bono cases.

Nikki: Just to not have her soul die?

Ronny: Yes. Because she works for a very large corporation that fucks over small businesses all the time.

Nikki: It’s so hard –  do you have the similar?

Ronny: Not now.

Nikki: Not now.

Ronny: But at some point, yes, there was. 

Nikki: There was some soul-killing experiences?

Ronny: There was, oh, I’m doing this now.  Ok, That’s great. That’s awesome. And what do you do for a living? Don’t worry about it. 

I’ve had some interesting jobs.

Nikki: Yes.

Ronny: To keep myself from going into insane amounts of debt.

Nikki: Yeah.

Ronny: Just so I could not,  you know, hate myself. Yeah, student loans. Good times. Many people will be in servitude for the rest of their lives, just to pay off the student loan that they took for a job they can’t get.

There is an economic problem in this country.  Oh, you’re poor. We’re not going to help you. In fact, we’re going to create new things to screw you over more.  And then we’re going to blame you for bringing the economy down. To the people who are just above you and the– and they’re intertwined.

That’s what it is, you know.  It’s just this situation of like, go to school. Now you owe money, but we’re not going to pay you enough to pay it off. And your interest rate is going to be astronomical.

 I look back and what I would’ve done differently is I would have, even though I have some friends from college that are all like do-or-die-to-the-end,   I wouldn’t have gone to college.  I would have left town cause I had some money, not a lot, but I had a car. I had some money. I had a sleeping bag. You know.

Nikki: Those are the necessities. You need a sleeping bag and a car.

Ronny: Yeah, exactly. You know– 

Nikki: –a little bit of food, but

Ronny: You know, you can stop and you’re going to get some food somewhere.  Or there’s plenty of restaurants that will let you work a shift for a meal, easily.

Nikki: I didn’t know that.

Ronny: Plenty of restaurants will do that, especially along the 101. If you’re like, just for a meal, just for dinner.

Nikki: Yeah.

Ronny: I’ll do whatever you want. I’ll clean, take out the trash, mop the floors, whatever.

Nikki: Interesting.

Ronny: Yeah.

Nikki: Pro tip.

So if you had to do anything differently or give any advice to someone who has yet to be in debt yet. 

Ronny: My advice would be get a job while you’re in high school. Something small, you know, two days a week. Save all of that money. Do not spend a dime. The second you get your paycheck, you go straight to the bank. You deposit. Become a busser or a runner because you’re going to get cash tips every night. You take those, put them right in the bank. Done. Okay.

Four years of high school doing that, you’re going to have a good amount of money at the end. Okay, travel. Go pick a state. You know, people are like, go international– which is awesome. Yes, go international. But America’s big. Yeah, the United States is a large place and there’s a lot. The country’s really diverse.  Seattle’s nothing like the Bay. It’s kind of like the Bay area, but it’s not, it’s a different vibe.

Go to Louisiana. Go to Mississippi. You know, go to Florida. Shit, go to Washington D. C. Talk to people you’ve never talked to you before.

Nikki: Yeah.

Ronny: Then once you’re done with your little adventure, figure out what you want to do with your life- which is going to change by the time you hit 25. Cause you can do that in college except you paid for college. And then you are in debt for something you don’t want to do anymore because you realize that the people you’re gonna work for suck. So go get a job. You know, something that has benefits and pays a decent wage and enjoy life. You know? Don’t be in debt.

Then when you have your career set, you’re like, well now you can take some time off. You look back and be like, I had fun. Not like I was paying off money from the age of 20, until 35 and I got nowhere.

Nikki: And finishing thoughts?

Ronny: Don’t go to college. Don’t.  Just, don’t go to college. Stay home, live at home. Also live at home, as long as your parents will allow you to. Okay? Rent’s expensive. But also get a  part-time job in high school. Go to a trade school. Figure out what you want to do with your life. Cause guess what? You’re 19, you don’t know shit.

When you realize that you don’t know shit, that’s when you know shit.  It’s when you actually realize that you don’t know a goddamn thing about life is when you’ve reached a moment where you actually know things.

I have a really good friend. She was a conservative MAGA  hat-wearing– yeah, it was weird. Her whole family is that way. 

She traveled. She went to India. She went to Thailand, Vietnam.  She went to the UK. She went to Rome.  Went to a few parts in Africa. 

Got home. She’s a lily-livered liberal these days. It’s amazing how someone sees the world and comes back. And all of a sudden is like, ‘Can’t we all just, like, love each other and get along? And, ‘I can’t believe he says things like that.’  Like you voted for this. But she saw the world and all of a sudden her whole world changed.  I’m not going to say that happens to everyone, but you see the world that changes you.

Don’t go to school. Travel. Enjoy life.

Nikki:  Matter of Life and Debt is produced by me Nikki Nolan.  

Special thanks to Efe Akmen for creating the music and mastering the audio. 

Additional support and thanks to Sarah Thibault  who writes the information and transcripts about each episode. 

This podcast would not have been possible without them. 

Visit our website for more information matteroflifeanddebt.com, where you can listen, read transcripts, get additional context of the subjects you just heard about, and subscribe- absolutely for free. That website again, matteroflifeanddebt.com. Thanks again for listening.

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