Like many Americans who took out student loans for school, Ro Fainstein found that when she left college, her full-time job in public relations didn’t make her enough to pay more than the minimum payments on her loans. After 15 years, with a career in Marketing, Ro Fainstein now finds herself with the same amount of debt as she started with: $40,000.

This summer her dog died and she was in the hospital, she stopped making payments altogether. Her loan company began harassing her, even while she was at the hospital with her first child in the NICU. It was then that she decided to stop paying money into what she says are the pockets of investors. “If your loan is owned by a company like Navient, who’s selling it to investors who are just playing with your debt, would you be inclined to pay that?”

To find out more listen to “A Pawn in the Loan Market.”

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Transcript

Nikki: I’m Nikki Nolan, and this is A Matter of Life and Debt, a show about people in the United States and their student debt. Today’s episode: “Pawns in the Loan Market.” I talk with Ro Fainstein, an artist writer and market research strategist.

She has had to renegotiate her loans almost annually. This is because she has never had quite enough to pay them after all of her bills and other expenses. She sees her student loans as fattening investor’s pockets, which gives her a little motivation to pay them back.

This is her story.

Hi, welcome to the podcast.

Ro: Thank you. Thank you.

Nikki: I’m really happy that you’re here. You ready to kick this off? Ready to talk about some debt?

Ro: Absolutely. Absolutely. I’m ready to tell you some things.

Nikki: So let’s get into it. How much debt do you have? How much did you borrow? Let’s get into the details.

Ro: Sure. So I think I started somewhere around 40K. This was a consolidation of my loans from undergrad, as well as grad school. A combination of federal grants and straight up financial aid due to my lack of income, and my family’s lack of income. I am still at $40K after all these years. That’s so- since- well, I started school or college in 1999. Finished grad school somewhere around 2005. My debt is exactly the same as it was when I consolidated and that’s after years of making payments when I really needed that money for bills, expenses, and rent, but I did my best and it never really added up.

And then I had times in my life where I just couldn’t pay. So there were lots of deferments and forbearances. And that’s why I’m still back at square one.

Nikki: Oh my gosh. So, you’ve been paying like since 2005 or, or have you paying since-

Ro: -on and off.

Nikki: -on and off? Wow. And are they private? Are they public? What do your loans sort of look like?

Ro: One was federal and then one was , honestly, I can’t remember. It’s such a long time ago. I don’t remember specifically. I know I got Assistantships from the school, which mostly just was like, here’s a discount off your tuition, but you have to work on campus in both schools. But otherwise I got a private financial aid loan and then a federal.

Nikki: You said you reconsolidated them.

Ro: Yeah. After grad school, I consolidated them. I feel like every year of my life since grad school, since 2005, I’ve had to renegotiate these payments. And I’ve exhausted every option I can for forgiveness, or forbearance, or deferment, or income-based repayments- all these different options that they’ve given me. And now for the past few months, especially, I just don’t pay because my salary was cut. I don’t have enough where I have any extra.

And this really brings me to this important thing that these loan companies don’t understand or don’t care about, which is- or that our government doesn’t care about because they don’t protect our right to education- and this is the point. As I understand it the basic principle of student loans is that you take them out and then someday you’ll be successful enough to pay them back. That’s like the principle, right?

The problem is you’re never successful enough, especially with the interest, unless you’re some kind of tycoon of some sort. There’s never such a thing for anyone as extra money in your life. If there is, you take a vacation because you deserve it. We all work like dogs. We don’t want to spend an extra hundred dollars that we have on a, per month on a student loan. Or more. We want to take our family out for dinner that month.

Nikki: Yeah

Ro: And every person’s different, too. All they look at, is your income not anything about your personal circumstances. Do they care that I have to pay rent and bills and I have a new baby, and a dog. And, oh by the way, I’m also paying my mom’s mortgage, which is ridiculously expensive, plus I have credit card debt.
No, they don’t look at the individual picture. And the reason why they don’t look at you like an individual, it’s just like when a criminal doesn’t want to get to know you personally, because if they start to see you as a human being, it’s harder to kill you.

Nikki: Makes absolute sense. Like totally makes a lot of sense. And I feel like that’s what interest and student loan companies are doing is they’re like slowly drowning people.

Ro: Yeah. Yeah. And I mean, I’m happy to share with you. Like I alluded to the fact that like I’ve been harassed, especially recently. The worst experience- I feel like I finally reached the pinnacle with Navient. That was this past couple of months. So they had them calling me at 7:00 AM every other day the week that my dog was being put down. And I was in the hospital delivering my child, all in the same week. And I had a fucking, excuse me, debtor calling me at 7:00 AM.

Nikki: I’m not, I’m not surprised by that, but also like, that’s really upsetting.

Ro: Nobody should call you at 7:00 AM, let alone Navient. So I immediately called them up from the hospital and ream them out. They are total monsters. Not the people who manage the call centers. Those are just people who are happy to have a job. And I totally told the woman I talked to, I was like, I know this is not your fault, but like I laid it out super clear for her.I was like, do not call me at 7:00 AM ever again, I am in the hospital. Can you just put me on hiatus for a minute and like start harassing me next month? I was like, I’ve had an incredibly stressful month and you guys are just incessant.
But, it’s the people who are running the company that put these policies in place. And like I said, they look at us like we’re all the same and that we’re not individuals with individual circumstances.

Nikki: Yeah

Ro: One thing that I was going to point out in our chat today really concerning me, like, I started to think about all of this topic when we started talking about it and I was just like, I have no idea the mechanics of all of this. As far as I understood, which is something I heard from another podcast, a financial podcast is, Navient basically is like a private company that buys all of these loans and then creates these junk bond, investment things. Portfolios that investors can buy and like, that’s why they are so gung-ho about you paying because they have to please these investors who have bought these portfolios of people’s debt.

Nikki: They are really set up for profit, sort of like our healthcare system, which is a totally other podcast.
I feel like that’s a good sort of segue, into, like, I want to hear more about your story.

Ro: I’ll give you the nutshell story in context of our topic. I’m an only child of immigrants from Russia. They came here, I’m first gen. They came here with about $200 in their pocket. My mom was a seamstress and worked at a laundry mat when she got here when I was a baby. And I basically sat under her work area. Cause , no childcare, no nothing.

My father was working in the back room at an optometrists crafting lenses, which is the only skill that he could find that was marketable as an immigrant. They never really got to a point where they had any excess. They got to a point where they were able to buy a house and I’m still paying the mortgage on that house, to put the perspective there.

And my dream, I liked to draw, but I like to write. I used to write poetry since I was very little and I dreamt of becoming a creative writer. And I wanted to go to school for creative writing but my parents, like many immigrant parents, told me that I needed to make money at all costs. And they encouraged me to seek out something that would be a little bit more lucrative and savvy in terms of the long view. Which I could argue against today because I feel like if I had become a writer, I could be selling books by now and be a lot more lucrative than what I’m doing. But at the time it was important to make money first and pursue your dreams later. So I put the writing aside and I focused on marketing and business when I went to school. And I did my best that I could, without any privilege, I had no legs up.

The only assistance I had was with these loans. And yeah. So now I’m left feeling a little bit like this millennial story that you hear about where I’m wandering the earth and wondering why I don’t have any purpose and trying to reinvent myself as I am about to turn 40.

Nikki: Let’s talk a little bit into high school to college. What did high school sort of look like and how did you choose your college that you went to?

Ro: So, high school I hung out with the group of kind of outsiders. We were called by a bully once The Teenage Wasteland, which is totally an inaccurate moniker because I don’t think there’s anything wasteful about the people that I hung out with. We were basically like, kind of like goth punk kids. But externally, perhaps, it seemed like we were outsiders, but every one of my friends was an artist, whether they were a musician, a filmmaker, a writer . Just everybody had these amazing creative skills.

And I think that’s what drew us all together. Also we just didn’t find our fit within the structure of high school. So we found each other and we spent, honestly I mean, I skipped a lot. But we were all really bright. So passing school wasn’t really a problem.

What I remember most about that time is the creative projects that we worked on together outside. Like we all formed like little mini bands, and bands, and we created a feature-length film together. And, yeah. That was kind of the stuff we did that and we were always just filming, like making little vignettes and all this kind of stuff. And like cops would stop us on an abandoned street at midnight and they’d be like, what are your kids doing?

We’re like, filming. And they were like, oh, okay. As long as you’re not doing drugs or whatever. And we’re like, no, I mean, like we smoke a little pot here and there, but like, it wasn’t about that for us. Like, we just… we existed on like a different plane, I guess. Not to be too esoteric about it. But, yeah, I mean, that’s, that’s what we were like.

And when it came down to college, I was trying to be sneaky and find a school where I could kind of design my own communications major, but also minor in like creative literature. That way I could squeeze through with my parents’ approval. I don’t know why I felt like I needed their approval cause they weren’t even paying for anything.

But what I ended up doing, just because the bonds with my friends were so tight, is I just decided to go to the same school as my best friend. And I ended up staying at that school. That’s a really small liberal arts school in Westchester, New York. And she ended up dropping her first year and moving to a school back home.
And- but I stayed because it turned out that there were a lot more interesting freaks like me at this school. It was kind of like this weird amalgamation of people who just had kind of lost their way and weren’t sure what they were doing or why they were there. And we all turned out to be like successful, interesting people.

Nikki: What I’m hearing here is that you made your decision based on trying to continue the connection with your friends. And even when that fell off, you found something inside of the school. What was your major and what happened after school?

Ro: I was actually undeclared the first year I was at college ’cause I was still trying to figure it out. And what I did was self-design my communications major with the help of my advisor. And then I took bits of like film courses and history courses and communications classes, journalism, like all these different things and piece them together.

And the school was awesome that they let me design my own since they didn’t offer communications. It was still fairly new at that time. Not a lot of people were studying communications in ’99. And I couldn’t get into the Ivy league, whatever schools they’re just way too beyond my price range.

And I just didn’t even try to be honest. And I was intimidated to go to a very large school, I think, because I had such a close knit group of friends. I didn’t feel like that translated well to a big university. So I self-designed my communications major. I studied a lot of literature and took writing classes sort of as my minor.

Yeah. So I have a BA in self-designed communications. And then I went on to grad school after a year of not being able to find a job. I had graduated into a year that was really a hard job market. And I worked in public relations for about six months or so, and it just paid so poorly.

Again, the financial issue. I needed to make money and I just couldn’t sustain myself on what I was earning. So I decided to go to grad school and I ended up going to Emerson up in Boston for a program that they have, which is Integrated Marketing Communications. IMC. So they have one whole school that is dedicated to like marcom and then a whole other school that’s dedicated more to the arts. And I went for marcom even though the art school sounded more appealing.

Nikki: What’s Marcom? I actually don’t know what that stands for.

Ro: Marketing and Communications.

Nikki: Makes a lot of sense. So you had a few jobs, you went to grad school. Tell me a little bit about grad school.

Ro: So I think like most people who went to grad school, they’ll tell you that you spend a lot of time crying. The stress is out of control. You learn so much more than you do in undergrad and way more than you ever did in any other school level.

It’s challenging and fascinating and amazing. I did an accelerated program because, again, it was a fiscal decision. The longer you stay in school, the more you have to pay. So I wanted to complete in a year and a half versus the two year program.

Nikki: So you graduated. And at this point you had about $40,000?

Ro: Yeah. So at this point I had that debt and an alumni from Emerson helped get my foot in the door at an ad agency in New York City called Arnold. I did not have any sort of skill set that they really need at an ad agency. At that time, it was more about creatives. So, had I been skilled in copywriting or art direction, I could have maybe gotten an actual position there. But because they liked me and because they had this job assisting the chief creative officer being his assistant, they just gave me that job. And so that’s what I did. And because I had the savvy of some business and marketing and education, I did some research to realize that they were underpaying me for that job based on what Executives Assistants make in New York city. So I doubled my salary after the first year.

Nikki: At that company?

Ro: Yeah, I presented my case to my boss and he just happened to like me, I think enough personally. And he also knew my interest in writing and was going to give me sort of a shot at developing my copywriting skills, but I made my case and he was kind of like, we can’t really argue against this. I’m sure he could have just let me go and hired another twit for half the money, but I guess sometimes people just want to retain people for personal reasons.

Nikki: I feel like you don’t hear that very often that a company actually likes you enough. I had to actually transition jobs to ever get raises, which is, I mean-

Ro: I did that after that. Yeah.

Nikki: So during this entire time when you’re going through all of this stuff. You got out of school. What’s been going on with your debt?

Ro: I said earlier, it was basically an annual negotiation, or renegotiation, of my terms or, or trying to find some way of getting out of it. Honestly, I just, I never had extra money. So every time it was mostly with Sallie Mae. To their credit, Sallie Mae was really forgiving about these kinds of things. They allowed me to defer several times . I was always warned of that mounting interest, but I was like, listen, whatever, I’ll deal with it someday. When I say I’m going to have enough income to pay these things off, when I get to that point, then I’ll deal with it.

But I was like, right now, I’m just not making enough. I’m not making enough. And I wasn’t. Living in New York city, or any major city, like LA, San Francisco, you’re never gonna have extra money because the cost of living is ridiculous. So, that was basically my situation. So I deferred deferred or forbear, whatever. Whatever I could do, I found economic reasons why I could not pay for six months.

I found all the loopholes possible and I exhausted them all. And I did this over that entire period after grad school. I know. Up until very recently, honest l y. I’ve been doing like, it’s like it’s 2000. Yeah. So like 15 years of playing this game basically.

And , they give you a lot of opportunity to, to defer and do all that kind of stuff. You just have to ask, you have to call them and actually talk to them and usually they’ll do something for you. Right. I have now, I don’t even know what- I went to Income-based Repayment, and now I don’t even know what it’s called, but it’s like the lowest humanly possible payment. But you’re, you have to pay it for, like, the rest of your life, is as how it was kind of framed to me. And they were like, you can never renegotiate it. And yada, yada yada.
The past few months I’ve had a whirlwind, emotional life changes, and terrible things happening. And being in the hospital and having my salary reduced and I’m just not paying it. And I get emails from them. As I mentioned, the 7:00 AM phone calls while I was in the hospital. And I just got an email from them the other day, being like, here are all your options and I’m like, pretty sure I exhausted all these options guys, but thanks. So I’m just not paying right now.

I mean, I guess eventually I’ll go back to paying it again just to get them off my back, but I don’t even know what the consequences are if you don’t. I mean, I have good credit and I know that my loans have never factored into my credit before. It doesn’t, it doesn’t seem like it does because I have gone through periods where I haven’t paid and it’s never- my credit was never affected by it. But maybe it is eventually I, again, another thing that they don’t really educate you on. I feel like there should be like a mini-course at school where they tell you about your debt and like how to handle it and what are the actual consequences and like, What is the truth, right?

Nikki: Yes

Ro: Cause I don’t know, there’s a lot of unknown – there’s questions that I just don’t have answered. And I feel like even if you ask them directly about these things, they don’t really answer you fully. Like I was on with one representative who said they couldn’t help me. And I ended up calling back like the next day and getting someone else and that person, I don’t know if they just felt sorry for me, and they knew a secret or something. It was like I was talking to a totally different company. This person was like, actually, there is something I can do for you. I can get you this, like, secret deferment thing. And I was like, cool.

And like another time I remember distinctly, one of them was like, here’s exactly what you need to say. Like the certain wording. It’s kind of like these days with the COVID thing, if you say things a certain way, like you get off the hook for paying for things. Which I’m sure a lot of people are taking advantage of. But like, yeah, this one guy was just like, say this way and like, they’ll give it to you. And I was like, okay.

Nikki: I’m not surprised. Zero surprise there. It’s like go into the room, knock on the door twice. Slide a piece of paper under the door…

Ro: For real, because you gotta figure these hundreds of thousands of people working at these call centers, like some of them gotta be human beings with a heart. Right? So they feel for you. And they’re like, all right, well, here’s actually something that you can do to get out of this for a couple of months. Like you’ll still get interest, but this is what you can do. This is what you can ask for, but that’s a rare exception.

Nikki: Do you know what your interest rate is? I realized I did not ask. Usually I ask at the beginning.

Ro: I have no, I have no idea. I honestly, I don’t, I don’t look at it. Like I’m telling you Nikki, like I, I get the notices to pay, but I ha- I just don’t go and pay attention to any of the details. I’m afraid to even log onto the site. Otherwise I would go and look. I feel like they’re monitoring.

Well, the other thing is like for a while, you keep hearing rumors about different administrations coming in and they’re going to abolish student debt. And you never know if that’s going to apply to you ,or who that’s going to apply to. And like, I just , I had all this hope, like when Bernie was running and stuff. I was like, man, maybe someday one of these progressive policies will actually happen and somebody will come into office and , we’ll have a president that actually really values education and really values teachers and students.

And like, they will find a way to make education free or at the very least they will forgive all existing loans because fuck it! Right?

I know that’s ridiculous to think, but I also kind of in the back of my mind just was silently wishing for that to happen also. Like just poof, somehow this problem gets taken care of.

I don’t know if it’s just me or do other people take it more seriously? I don’t know. Do other people make it an imperative to pay their student loans? I just never have.

Nikki: So far, everyone I’ve talked to sort of has. Some people take it really seriously. Some people are more in your camp where they’re just like, it’s just there. I’m going to pay it till I die.

Ro: If your loan is owned by a company like Navient, who’s selling it to investors who are just playing with your debt, would you be inclined to pay that? I’m inclined to be like, fuck you. Like, don’t play with my debt. And the only reason you’re charging me interest is so that this grows for your investors? What the hell? This is my life. This is my livelihood that you’re playing with.

I’d understand this much more if they did it with like credit card debt or something. But to do it with someone’s education, like their access to education is fundamentally so unjust, that that’s why I feel in retaliation, I don’t want to pay you. Because I don’t want to give money to investors.

I’ve already tried to pay off- I mean, I’m sure that the amount of payments I’ve paid has to be thousands of dollars throughout the 15 years since I left school. But it didn’t make a dent. I’m right back to square one. So it kind of just feels pointless when you don’t ever make any progress.

And they don’t set it up in a way that makes you feel like you’re making progress. You have to design it yourself. I know all that tactic from paying down other bills, which is what I’m trying to do now. Which is tackle small things first and then snowball up to the larger things. And pay for the things that have the most interest first, like credit cards. I try to utilize that strategy for all other debts in my life, but when it comes to student loans, I just don’t have the heart for that because I fundamentally believe that education should be free. I don’t feel inclined to pay these loans.

Nikki: Yeah. The reason that student loans actually came into being was because of Sputnik. Because they realized after Sputnik went up, we need a more educated populace. And so they were like, people don’t have access to education. So the loan interest was so low.

It was super low and it wasn’t till the seventies and eighties and nineties, when they were like, Oh, we can make a profit off of this. We can really start charging people and making a really big profit, that it turned into the monster that it is now.

I would love to open the space to you to just talk about anything you really want to talk about right now.

Ro: You know, student loans are just there. It’s this ugly thing in the back burner that I just try not to think about. And when I get the little emails or phone calls or whatever, to remind me to pay, it’s kind of like a mosquito in my ear. I just kind of swat it away.

So far, I think, I do it because there hasn’t really been any consequence for doing so. Perhaps I’m wrong. But knowing that I’m accruing interest on a debt that I can’t afford ahead of all of my other bills right now, that doesn’t bother me. I’m just kind of like, well, all right, fine. Like, , I owe a bajillion dollars in taxes right now for having to work freelance for five months last year. So I have to take care of that first cause the IRS wants their money first. And , there’s like just other entities and organizations carry so much more weight for some reason than student loans.

Nikki: It’s a good place to transition.What advice would you give to your younger self, knowing what you know now?

Ro: I guess my advice would be something like, move to Mexico and manage vacation rentals. I don’t know, like do something you enjoy that maybe doesn’t require this heavy duty education. More generally just follow your passion and find creative ways to learn. And educate yourself for free or as cheaply as possible. Because in life, if you’re bright and observant and you recognize the patterns, you can learn like 80% of what you need to learn on a job and not even need to lean on your education anyway.

What I’m trying to say is just be resourceful. Learn by doing more. This is a principle that our grandparents probably followed much more back when college wasn’t as big of a deal. People did learn on the job more. I’d like to say.

But today with technology and with the internet, we have the resources where you could start your own company. You can get your skills online, cheaply . You can educate yourself. You can go to an online university.

Nikki: Yeah

Ro: I just feel like college doesn’t hold the value that it used to. It’s not as important as it used to be. It could be a really amazing experience. But it has devolved. I think it’s, it has some merit for socialization, almost like if we’re talking about puppies. I feel like undergrad is like a lot of where you learn socialization and how to be around other people and cooperate, and that kind of, those kind of softer skills. Whereas higher education beyond that, continuing ed is where you start to really learn you’re savvy in your trade.

But that’s, that’s so out of reach for the majority of Americans. So I feel like it’s just not worth the debt that like 99% of us are going to incur. So I dunno, be like Beck and just don’t even graduate high school. Forget it.
No. I mean, you should go to school. I mean, if you have the means and you can, go to school. I think you should try to avoid financial aid unless it changes form for our future generations. But in its current standing like why would you want to put money in the pocket of rich people, rich investors for you to educate yourself and then have to pay these people for the rest of your life?

I don’t know. I, I would try and I would work harder to find ways to get loans that were less, had less strings attached, less interest.

Nikki: Well, we’ve almost come to the end. I started doing this with a few people. Is there anything you want to plug?

Ro: There’s a facet, a methodology that I’m working on with my market research firm. I’ve been charged to, I was hired to take on the challenge of agile qual. So what that is is agile, qualitative research.

So these days we can – most people know qualitative research as running focus groups, live focus groups. A lot of them happen online now. One-on-one interviews, online forums. This is where we gather data from consumers and we produce insights from these conversations that we have with them. But historically they tend- these projects tend to last around a month or more. And the challenge has always been like our clients and companies and brands and businesses, want these programs to go faster and faster. Just like, , All their other legs of research that they do. , you hear agile so much in technology, especially. So I’ve been charged with creating agile, qualitative research for my company Buzzback, and we’re going to have a killer new offering by early 2021.I hope. But it’s really exciting.

And it’ll be something that brands can learn and ask some really important key questions about concepts that they have, claims that they have, creative that they want to test, ideas they want to test. All things that point towards innovation.

They’ll be able to accomplish it within a week. Which is pretty much unheard of when you have – but also backed by having a human resource.

So it’s not something that just is driven by AI technology. Because there are some offerings for qualitative research and quantitative research where basically a computer, and there’s like a bot moderator that runs them. But that’s imperfect. You’ll get a bunch of data, but you won’t get the interpretation. You won’t really get the insights. You need a human to do that.

What we’re coming up with is a solution where you’ll have the speed, and you’ll also have a human like me, who will help you interpret what we’ve learned. And help you, help you get rapid fire recommendations on how to move forward. So it’s really exciting.

Nikki: That sounds super exciting. I want to ask one more question. Is that okay?

Ro: Yeah, of course.

Nikki: What do you think we learned during our conversations?

Ro: I’m an anarchist? I don’t know. Well, I’ve learned , perhaps, my approach to my student loans is really irresponsible. ‘Cause I’ve noticed from my conversations with my friends, they have such intent in paying off their student loans. And I, I actually didn’t realize it till right now that I’m probably the only person that’s not doing it. And maybe I’m totally wrong.

Nikki: I mean, I was just curious ‘cause you do do research. And actually this podcast has sort of turned into like a mini research project that is not enough data points to actually tease anything out. But for the most part, the things that I’ve learned so far is that student loans are unjust, find your passion, try to learn what you can from on the job and from the internet, and make sure you understand your loans before you sign the paper. Those are themes that are coming out in almost all of my conversations.

Ro: The thing is, it’s tough. You can understand your loans at inception, but they changed shape so much, at least for me throughout the 15 years, because of the refinancing and the switching of hands and the different people who handle your loan, that you never are really quite sure of your terms, unless you’re like really stay on top of it.

But we all have such complex multifaceted lives and different priorities that I just don’t think that that’s ever- like being fully educated and on top of your loans is ever a priority. There should be some sort of Institute or public service that really steps up and does that for people I think, and, and just helps them take care of it in some way.

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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