Alan Collinge went into debt. He took out a reasonable $38,000 to pay for his undergraduate and graduate degrees, but by the time he graduated, interest had caused the debt to balloon to $50,000.
Alan struggled to find work so he went into forbearance, which is a period of time in which the debtordoes not have to make payments (though interest continues to accrue). His debt had risen to $60,000 and Alan--still struggling to find profitable work-- requested another period of forbearance. Sallie Mae, though, put him into default. ("Default" is a nasty word for any debtor. If a lender puts the debtor into default, the debtor's wages can be garnished, the debtor can lose forbearance options, and late fees can be applied among other consequences.)
Soon, Alan would owe over $100,000.
Acknowledging the ridiculousness of having to pay almost three times the original amount of his loan, Alan tried to restructure a fair deal with Sallie Mae. Sallie Mae refused.
So began Alan's crusade to change the student debt industry. Until he and millions of other debtors get a fair deal, Alan has refused to pay back his loans. He created the group Student Loan Justice, and set out to learn everything he could about the predatory lending system that has ruined millions of lives. His research has been featured in The New York Times, The Chronicle for Higher Education, 60 Minutes, and he's written a book called The Student Loan Scam.
As a result of his research, he's become outspoken about the predatory lending system, noting how both corporations and the government profit when students going into default. Not only that, but the number of students defaulting on their loans is far higher than what the Department of Education says it is. (The Department of Education says the default rate is about 5 percent while Alan says it could be as high as 40 percent.) In other words, young people taking out loans are led to believe that 1 out of 20 graduates struggle to pay their student debts when it's actually closer to 1 out of 3.
Alan's solution? Reinstitute bankruptcy protection.
#1. Interview with $200,000-in-debt grad, Kelli Space.