Kimberly Garrison has been struggling with her student loans for a full decade. Unable to land a job with her computer networking associate’s degree, the Homestead woman missed payments, which led to her wages being garnished — about $700 per month. When Garrison received an inheritance after the death of her grandmother, she put the full $10,000 toward her loan debt, she says, in hopes of getting it under control.
Still, the $35,168 she borrowed from 2003 to 2005 to attend the Miami campus of ITT Tech has grown to $62,030.
“It ruined my life,” said Garrison, 38, who works as a FedEx driver and has taken on roommates to keep her living expenses down.
Garrison’s for-profit college education didn’t lead to a career, and she got in over her head by taking out a mix of federal loans and higher-interest private loans. Garrison’s private loans had interest as high as 9.6 percent.
Private loans make up a significant yet often overlooked piece of the nation’s $1.2 trillion student loan debt.
Some $150 billion of U.S. student debt comes in the form of private loans, which can be issued by banks or the schools themselves. These loans — which have been called the “Wild West” of student borrowing — represent a potentially dangerous trap for consumers.