Student Loan Blues: Is a Defaulting Credit Score the New 'It' Accessory?

Loans Lies and Lipstick: The Return of the Collectors

Darling in New York you're always trying to reinvent yourself. New Manolos new apartment new… financial crisis? Well it seems the U.S. Department of Education has decided to throw a wrench in our stilettos by restarting collection efforts on defaulted student loans. As I sat here contemplating if cosmos were really the best pairing for a financial meltdown I couldn’t help but wonder: are we all just one unpaid bill away from being utterly un fabulous? More than 42 million Americans hold student loans and outstanding federal education debt exceeds $1.6 trillion. That's a lot of zeros even for a writer who once thought a million dollar book deal was just around the corner.

Defaulting is the New Black (and Not in a Good Way)

More than 5 million borrowers are currently in default and that total could swell to roughly 10 million borrowers within a few months according to the Trump administration. Suddenly that overdue library book doesn't seem so bad does it? But this is real life not a rom com where you can just bat your eyelashes and get out of trouble. And the Trump administration? Well they’re not exactly known for their forgiving nature when it comes to money are they? They seem to think that directing financial resources at those who've benefited from a college degree is a crime against couture.

The Blame Game: From Biden to Borrowers

Secretary of Education Linda McMahon chirped "American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies." As if we the borrowers intentionally enrolled in universities with the aim of financial ruin. I mean wasn't that Samantha's investment strategy? Oh wait... no. The collection activity on federal student loans has been paused for half a decade. Half a decade! That's like five Manolos worth of time. And during that period? Chaos. Utter devastating chaos for working families across this country according to Mike Pierce.

The SAVE Plan: Saved or Screwed?

Millions who signed up for the Biden administration's SAVE plan were left hanging like a dress on a clearance rack after GOP led lawsuits blocked it. Now they're being forced into another repayment plan that will spike their monthly bill. It's like going on a blind date and discovering he's still living with his mother...and his credit score is lower than your shoe size.

Layoffs and Hold Music: A Symphony of Financial Despair

The Trump administration in its infinite wisdom eliminated the forgiveness provision from some student loan repayment plans and terminated Education Department staff. Now borrowers are waiting hours on the phone listening to hold music that's probably more depressing than my dating life in season one. Mark Kantrowitz says he's heard from people stuck waiting on hold as long as eight hours. Eight hours! I could write a novel in that time. Or at least a very long blog post.

Credit Scores Crash: The Ultimate Fashion Don't

And the cherry on top? A credit score tanking of up to 171 points! That's like showing up to a black tie gala in Crocs. Carolina Rodriguez says she's seeing clients with delinquent accounts who reached out after noticing a drop in their credit scores. One client is making $45,000 and living in New York City. "Every month she's in the red." Every month darling. In this city being in the red means you can't afford the right shade of lipstick. And what's a girl to do then? I couldn’t help but wonder...are we all just one default away from becoming a cautionary tale in a Manolo Blahnik world?