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Why I Defaulted on My Student Loans

Posted by E on September 5, 2015

students demo student protesters

“Technically, you’re already in default,” said the man with the heavy Francophone accent. “You defaulted as of last month. There’s nothing else we can do. Your debt was sent to collections two weeks ago. You’ve already had a grace period extension.”

“But if you wait just one more month….” I started, straining to hear him over the crackle of the crappy long-distance connection. “I’m getting my first salary at the end of this month.”

“Is there no one who could lend you the first payment?” he asked sympathetically. “A family member? We can’t put off your repayments any longer.”

“No, but I’ll have the funds soon. I’ll get them transferred into my Canadian bank account and send you the cheque as soon as I get paid.”

“I’m sorry,” he said again. “You understand that I have no choice. It’s policy.”

He tried to be as nice as possible about it, but I was out of options. My credit was ruined. It was the year 2000, the birth a new millennium, and as a twenty-five year old I was supposed to be having the time of my life. Instead, I was screwed.

Student-Loan-DebtThis month I read a powerful NY Times op-ed by Lee Siegel, titled Why I Defaulted on My Student Loans. He spoke of a deeply-personal subject that parallels my own experiences – a situation I’ve never written or spoken about publicly. In light of the heavy criticism heaved upon Siegel for encouraging others to default, I feel it’s tremendously important to add my own story. Thousands of young grads’ lives are affected both by heavy student debts and by the decision to choose default and/or bankruptcy over being enslaved for decades – this is an option that shouldn’t be shrouded in shame.

Siegel wrote this about the difficult period following his graduation:

I found myself confronted with a choice that too many people have had to and will have to face. I could give up what had become my vocation (in my case, being a writer) and take a job that I didn’t want in order to repay the huge debt I had accumulated in college and graduate school. Or I could take what I had been led to believe was both the morally and legally reprehensible step of defaulting on my student loans, which was the only way I could survive without wasting my life in a job that had nothing to do with my particular usefulness to society.

I chose life. That is to say, I defaulted on my student loans. As difficult as it has been, I’ve never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example.”

grad ingreenI graduated in 1999 from the University of Ottawa, freshly-minted with a double major in Criminology and Psychology. For a former high-school drop-out with a turbulent past, I’d done exceptionally well in university: on the Dean’s Honour Roll for my first three years, receiving small merit scholarships and earning a Magna Cum Laude distinction. I’d also discovered my passion – writing. After dreaming of being a writer since childhood, in my last year of university I encountered a Creative Writing professor who encouraged me to pursue that vocation. Professor Seymour Mayne (who would become my long-time mentor, supporter and friend) believed in my potential and told me I had real talent, and that I shouldn’t be afraid of dedicating myself to it.

My Honours degree was an personal achievement, considering that I’d dropped out in grade nine and never attended high school; in its place, I took an equivalency exam and was awarded a GED (high school equivalency) diploma at age eighteen. My childhood had been rough and violent – an immigrant to Canada from age 11, I grew up with abusive parents. My father died after I turned 13 and my mother’s abuse continued, leading me to run away. After a couple of years in CAS group homes and foster care, I returned to my mother’s home. At age sixteen I was recruited by the Heritage Front, a dangerous racist gang that soon became the most powerful neo-Nazi, white supremacist group Canada has ever had.

By age eighteen, I knew I wanted out. After a series of events I described in my memoir Race Traitor, I spied on the group leaders and testified against three of them, sending them to prison. I would later find out that a co-founder, Grant Bristow, was a CSIS agent who had instigated several criminal acts about which I’d provided affidavits. At CSIS’s request (and to protect their agent, as discussed in a 1994 episode of CBC’s The Fifth Estate), my application to be admitted into the Witness Protection Program was denied.

defection 1994-2Hategan article Metro Toronto

I was nineteen, in danger after several death threats, and had nobody to protect me except for a small number of dedicated activists who risked their well-being to ensure I remained alive. I was on the run for over a year all along the East Coast and eventually settled in Ottawa and rented an extra room from a grad student. My roommate, Julie, encouraged me to apply to university. “How could I pay for it? How would I live?” I asked her.

“The way everybody does,” Julie answered. “Apply for OSAP, Canada Student Loans. Anything you can get. I’ll help you fill out the paperwork.”

fencing teamAnd so I did. With my GED and letters of reference in hand (for which I will be eternally grateful), I applied and was accepted by both Carleton and the University of Ottawa. I chose the latter. I moved closer to the campus, renting a sunny room in a century-old, red-bricked house on Macdonald Street. My years of study were beautiful and were a new childhood for me – I threw myself into my studies. I somehow managed to get on the varsity fencing team, and won first place at the Varsity Athletic Games. I volunteered in the community. I wrote papers for other students for extra cash and tutored foreign students in English. In summers I worked two jobs, both at magazine and tobacco shops – one on Sparks Street that paid me $7 under the table, the other being the famous Mags & Fags, Ottawa’s oldest newspaper and periodicals shop.

By the time I graduated, I was thankful for my loans and intended to repay them as soon as I was able to get a job. I had a grace period of six months from my graduation date before the loan repayments would kick in. Plenty of time to find something, right?

ottawa

On my Macdonald St porch

After a couple of months of searching, I landed an interview for a job that seemed made for me – as a staff member of a locked-up youth facility. It was a good job. By good, I mean earning double digits – $15 an hour instead of the minimum wage $7 I got paid at the magazine stores. With my years spent as a CAS kid and my dual criminology and psych degree, I was a shoo-in. I had cinched the interview and the smiling man across the desk was already discussing me coming in for shifts every other weekend, but for one last question:

“Do you have a driver’s license?”

Of course I didn’t. Not just because of the obvious reason – there was no way in hell I could afford a car, even a beat-up used one – but also due to my fear of being found by the men who had threatened to kill me.

Less than five years earlier, when I was just seventeen years old, I had been taught by the Heritage Front’s self-appointed “Intelligence chief”, Grant Bristow, that getting the info off drivers’ licenses was as easy as paying $5. “Access of information,” he’d told me. “You just need the driver’s name and you can get it through the Access to Information Act.”

Section 21(1)(c), to be precise. That’s how skinheads and neo-Nazis learned to track down their political opponents to their home addresses – via public voters’ registries and drivers’ licenses. With my name being so unique, I couldn’t take the risk of applying for a license unless I had a name change. And since CSIS had directed the RCMP (the Witness Protection Program falls under their jurisdiction) to dismiss my information in order to protect Bristow from criminal charges (both my ex-lawyer Paul Copeland and notorious Toronto attorney Clayton Ruby were working on getting Bristow’s crimes investigated) – I couldn’t get a name change.

Why? Because I owed student loans. To prevent fraud, Canadian law stipulates that you aren’t allowed to change your name if you have any unpaid debts or any pending court proceedings. That makes sense, except for the fact that at age nineteen, I had gone from an existence in hiding straight to university – which was only made possible by getting student loans. Now that I owed over $40,000, there was no way I could change my name. A driver’s permit (that revealed my home address) was out of the question.

Even if I might decide to risk being found, I was terrified to bring harm onto others – I worried about my elderly, frail landlady, about my roommates and the woman I was involved with at the time, who was Hispanic (and at risk for a racial attack if they found me). Knowing how the Heritage Front had been taught to operate by Grant Bristow, everyone around me was at risk. I owed it to all of them to reduce any potential traces of my address anywhere.

The interviewer looked apologetic. Even though the advertised position involved looking after incarcerated youth within the facility, their policy still required all staff to have licenses in case there was an emergency, or the kids were to attend an appointment outside the facility. I shook his hand and thanked him for considering me, and I managed to keep myself from bursting into tears until I was around the corner from the building.

All of a sudden I understood how screwed I really was. A criminology or social work degree was absolutely useless without a drivers’ permit. The CO’s from the Ottawa-Carleton Detention Centre told me the same thing: just get your permit and reapply. They already knew me after I’d volunteered inside the prison as an arts coordinator for the Elizabeth Fry Society, and I’d also interviewed them for my Penal Justice term paper. But how could I tell them the truth – how deeply ashamed I was about my past. Even though I had been a minor, legally a child, for most of my involvement with the hate group – and I made amends by putting its leaders in prison – how could I tell potential employers why I was afraid to have my address on my ID, or register anything under my name? Wouldn’t such a past immediately kill my chances at employment?

memeI thought about Grant Bristow. I thought of how the CSIS agent, co-founder and co- leader of the Heritage Front was sitting pretty in a three-car garage house bought by taxpayers’ money (and getting a living stipend to the tune of $3000 per month) despite never testifying in any court proceedings. All because CSIS made sure to get him into the Witness Protection Program and ensured that I would be rejected from the same program.

So now that I couldn’t get a license (for risk of being tracked down) jobs in my field were out of the question. Furthermore, all government jobs I applied to (Canada’s capital being, after all, a hive of bureaucracy) required a working fluency in French, which I lacked. Soon I found myself in the same boat as so many other young grads – dependent on $7, minimum-wage jobs. I worked ten hours a day and cried myself to sleep worrying about whether I could make it as a writer. How would I find the time to write? Would I end up a shop girl for the rest of my life, selling souvenirs, newspapers and cigarettes to tourists on Sparks and Elgin streets?

What had seemed a perfectly good job as a student was no longer such a rosy prospect. I felt depressed and frustrated with my every failure to secure a well-paying job. Depression set in and I stopped going to work at the magazine store. The six months came impossibly fast – I practically blinked and my payments were due. Something in the vicinity of $500 a month. I made minimum payments on my credit cards and begged the student loans people to please give me an extension.

To my surprise, a lady from the bank took pity on me. Three more months, she said. She’d obviously heard enough similar tales to understand the difficult position I found myself in. But that was it, my last lifeline – no more extensions after that.

major-s-hill-parkI pounded the pavement again. It was a scorching summer and my depression had grown worse. To keep myself together, I often walked to the top peak of Major Hill’s Park, crouched down on the grass and wrote poetry. I loved seeing the jutting glass arches of the National Gallery of Canada building, the way it looked like a crystal palace hovering over the sea of multihued tulips that spread from the grassy hillocks toward the artsy Byward Market.

Sometimes I clambered down to the rocks along the shoreline and sat on my favourite boulder, watching the tumultuous waves of the Rideau River crash against the rough beach pebbles and rootless tree branches.

alexandra bridgeUpward and to my right, the steel beams of the Alexandra Bridge glinted, catching the sparks of late afternoon sunlight. I liked that bridge. My landlady’s daughter Jennifer told me that one of her best friends had committed suicide in winter by throwing herself off it and smashing into the ice floats below, and I had made a mental note at the back of my head that if all else failed, that was as good a plan as any.

If I couldn’t make it as a writer and couldn’t get a decent job, what the fuck was the point?

Major_Hill_ParkAnd then two miracles happened, and they came back-to-back in such a way that it was impossible not to take it as a sign of greater things to come. The first (and best) news was that The Fiddlehead, one of Canada’s most prestigious literary journals, was going to publish one of my poems! I’d had poetry appear in University of Ottawa publications before, but this was the first time an independent publication liked my writing enough to put it into print. When they mailed me the issue in which my poem appeared, with a cheque for $40 tucked inside, I was ecstatic and fueled with hope – maybe I could make a living as a writer after all.

The following week, a friend forwarded me an email from Adam, a recruiter for Korean hogwons (privately-owned tutorial schools) who was looking for English-speaking young people to teach ESL. No experience needed – you just had to have a BA (in any field) and speak fluent, native-proficiency English. And they paid more than the part-time job I’d just quit.

Soon I was on the phone with the guy. “Is this a scam?” I asked him.

“No, of course not.”

“Do I have to pay for my flight?”

“Nope.”

“So what’s the catch? Are they a strip club? A prostitution ring?”

He laughed. “There’s no catch – they’re desperate and will fast-track everything. They’ll Fedex you the flight ticket, set you up in your own accommodations close to the school, and you only have to work twenty hours a week. They’ll pay you 1600 won a month and they don’t care if you’ve never been around kids before. You’ll likely teach a combination of kids, teenagers and adults.”

Getting paid the equivalent of $1600 a month for only 20 hours a week – with the potential of making double that income if I tutored privately after hours – sounded insanely great for someone in my desperate position. And best thing was, no driver’s license was needed!

azaleas koreaLess than a week later my flight ticket arrived from Singapore Airlines. The next day I took the bus to Montreal so that I could get my work visa from the Korean Consulate, since I was leaving the following week. They had seen many young people like me, the smiling lady at the consulate told me. Recent grads without job prospects at home, fleeing by the thousands to high-paying teaching jobs in Japan and South Korea. But Korea paid better, covered accommodations, and the cost of living in Seoul was a lot less than Tokyo.

Afterwards I packed all my things in one feverish 24-hour period and carried them to the basement, thankful that my landlady Pat had allowed me to store my things while I was gone. On a dark and rainy Monday morning, my best friend Dina drove me to the airport. She herself didn’t have any other jobs beside her brother’s magazine shop on Sparks street. Soon she would depart for France, where she’d been offered a contract position for six months. Since she loved Paris she’d probably have done it for free, especially once she managed to talk an elderly aunt who lived in a crappy outer arrondisement to let her crash on her sofa.

I didn’t know it at the time, but I would never return to live in Ottawa. By the time I found myself back in Canada, a year and a half later, most of my friends had left the capital. Nearly all of them because they couldn’t find work there and had heavy student loan burdens that needed to be covered. Half a dozen ended up in South Korea. The rest scattered throughout Ontario, and several went back to school. The general thought was, What do you do when you can’t get a job? Simple: enroll in graduate school and take out another student loan – that delays the payback period.

We were the screwed Gen X generation – kids born in the 70s and early 80s, nestled precipitously between the relatively-young, unionized Baby Boomers who’d taken all the best jobs and refused to be pushed out before age seventy, and a newer age cohort who would take all the entry-level jobs of the new millennium.

Seoul Korea editNaively, I still thought that I could pay back my student loans. I was still one month shy of defaulting, and I was going to scrimp and save every penny to send it back to ScotiaBank. But within the first couple of weeks at my new job in Inchon, Korea, I realized that I’d made a mistake – my contract wasn’t being honoured. The school director was giving me additional hours for which I wouldn’t get paid, and I was lowest on the totem pole among the other foreign teachers, who all saddled me with their most difficult classes.

I felt lost and upset at the deception. I still had my return flight ticket, but I didn’t want to quit and return to Canada. I was just starting to like Korea. My problem was, according to Korean law, my work visa was attached to that particular hogwon (school). If I had any hope of working in Korea, I would have to find a new school who could reimburse my director for the flight, documentation costs and the finder’s fee paid out to the recruiter.

elisa with studentsLuckily, I was in a country where my ability to speak perfect English was in high demand. I met with Adam, the guy who’d recruited me, and over the course of one Saturday we walked around downtown Seoul until we found a school looking to hire. My new school director negotiated a price on my head with my ex-director, and a fee was decided upon. I also promised my old director that I would work for free (and forfeit my first month’s income) as long as he signed the official documentation releasing me from my work contract with his particular hogwon.

By the time I started my new job in Seoul, another month had passed. Once I was settled into my new apartment in the Kangdong-Cheonho district and had an official address, my landlady Pat forwarded me a large padded envelope containing all my letters from ScotiaBank and the student loans people. It was then that I realized I’d ran out of time.

I scrambled to make my credit card payments via snail mail – these were the days before online banking was introduced, which would have made my life a whole lot easier. Then I made an appointment to speak with a ScotiaBank rep about my student loans. Given the 12-hour time difference, I stayed up until the middle of the night to speak with him, only to be told it was too late.

“I’m sorry,” he repeated. “Your loan has gone into default. There’s nothing else we can do for you.”

with students in Koreawith studentsmy classdrama festival

me in ChinaI worked hard that year and saved up thousands of dollars. I taught private classes nearly every night after my hogwon shifts ended and paid off every cent of my two existing credit cards. Then I scrimped some more. I even put aside a little to take a week-long vacation to Beijing and scale the Great Wall of China during my school break.

When my teaching contract ended, I had to make a choice – to pay off a portion of my student loan, or to live? It wasn’t a hard choice to make. Now that I was jobless once again, I could give ScotiaBank the ten thousand dollars I had put aside and then incur more interest until I was back up to $40,000+ once again. I could try to join the rat race back in Canada and work myself into oblivion at a job I hated, just so I could salvage my shitty credit score. Or I could hide out abroad, away from the collectors and knee-breakers, and write.

I was a traveller before I could afford it. I dreamed of exotic places and faraway destinations, and all that stood between me and living that dream was an insurmountable student loan I knew I could never pay off. I didn’t have any supportive family and had the misfortune to be poor and unconnected in a place where money and connections buys you everything.

So much of my past had been ripped from me as a child, during Ceausescu’s communist dictatorship. I wanted to revisit Romania and find out how my father died, to track down old relatives, trace my roots through Hungary and Poland, and understand the bloody history of an Eastern Europe whose DNA flowed in my veins.

students-loans2And I wanted to write. In order to get that time to travel to write, I had to default on my student loans. In some ways, I was fortunate that nobody else had co-signed my loans. It wasn’t like I was making a high enough income to worry about garnishment or income tax withholding. In fact, I didn’t even plan on returning to Canada for several more years – I wanted to work in Korea or live in South America next. My credit score was the only casualty, and I was willing to sacrifice it in order to be a writer.

I knew that eventually I would have to find a partner with good credit, who could support me during the times when my bad credit might haunt me. Someone who could understand that I’d never be able to co-sign on property, or car loans, or anything that demanded a review of my credit score. Who’d understand my need to forge ahead as a writer despite the financial catastrophe that a career in the arts usually entails. Fortunately, I was eventually able to find such a person, and as the years passed my student loans became a distant nightmare I seldom thought about.

As Siegel writes, “Am I a deadbeat? In the eyes of the law I am. Indifferent to the claim that repaying student loans is the road to character? Yes.”

Who the hell has the right to lecture bankrupt students on morality? The colleges whose greed-driven, soaring tuitions are making higher education an increasingly-unaffordable commodity? The banks who defraud, bribe, and are experts in insider trading and nepotism? We may have outgrown debtor prisons, but we still live in a world where if you’re poor and cannot pay your mortgage, you’re kicked onto the streets. Considered barely different from a common criminal. Whereas if you’re a bank and you break all sorts of laws, you’re given a bailout plan worth millions.

We live in a country where an intelligence agent who helps create a neo-Nazi white supremacist group, who plans and directs criminal acts with impunity and never accounts for a single arrest and prosecution gets a payoff worth close to a million dollars from Canada’s Security and Intelligence Service, but a teenage girl who testifies against white supremacist leaders (who go to prison) gets denied Witness Protection and has to go on the run for her life.

student_loan_debt__too big to fail   Seniors-with-student-loan-debt

“If the banks have become too big to fail, then the people have become too small to succeed,” argues Siegel, defending what he says would be “a collective act of civil disobedience” if everyone would simply default.

And I agree.

Am I unethical? To some, most definitely. But if I am unethical, then so are the banks who sent my student loans into default without giving me another chance. So are the government agents who instigated the harassment, terror attacks and assaults of innocent Canadian citizens and simultaneously denied me the opportunity to start a new life. So are governments who invest far more in prisons and the military than in their own citizens’ educations.

Canada changed its official policy on bankruptcy and student loans on July 7, 2008 – reducing the time limit you had to wait before declaring bankruptcy from 10 years to 7 years.

On July 8, I made the first appointment with a bankruptcy attorney in downtown Toronto. By the following Monday I was in their office, signing the required papers. In the eight years since I’d graduated, my student loan and interest had ballooned to $50,000.

Nine months after, I was free. Free to breathe. Free to legally change my name.

Free to live again.

you_are_not_a_loan

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One Response to “Why I Defaulted on My Student Loans”

  1. […] Why I Defaulted on My Student Loans […]

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