02/22/2011 08:11 am ET | Updated May 25, 2011

$250,000 in Debt

Last year, the Huffington Post published a story on my trouble with student loans, and since then I am happy to report that my situation has dramatically improved. My debt is still somewhere around $250,000. But that is not the point of this update. I want to focus on how a simple technical error put me in serious financial jeopardy. Students need to be extremely careful when they take out loans. What happened to me could happen to anyone.

To summarize, the trouble started in medical residency when the lender called in one of my medical school loans. That should never have happened because medical school loans qualify for residency deferment. Residents make so little, they simply can't afford to make payments during training. But because one of my loans was mistakenly labeled a graduate student loan, it was not protected by deferment. That I was never a graduate student was an inconvenient fact, but still, they barreled ahead with collection.

I had no choice but to fight back. I didn't have the money to pay hundreds of dollars a month in interest payments and I told them that. In response, they ratcheted up the harassment. Soon, I was getting collection calls every day, including on weekends and holidays. Letters were piling up, and the calls were growing increasingly threatening. If I didn't pay, I would destroy my credit, default on my loan, and never be able to borrow again. If I didn't like it, I could fax an appeal to management. Never mind that I did so multiple times--and over the course of an entire year, didn't get one single reply!

To draw attention to this deplorable behavior, I wrote to television stations, newspapers, and elected officials. A few weeks after my story was published in the Huffington Post, I received a call from the collection agency. They were going to allow the loan in dispute to be deferred until I finished residency. Whatever the precipitating factor, I didn't argue. It felt like a tremendous victory.

But my feelings of triumph were short-lived. A few weeks later, the collection agency called me again and asked for payment. They claimed to have no such record of our prior conversation and they were demanding the monthly interest plus all the money that had accrued from before, around $1,000.

I also received a letter saying that if I didn't make payment on the interest, they would call in the entire loan. It wasn't clear to me how long I had but I was extremely worried-- $20,000, its full value, was a lot of money. I was forced to make an emergency payment of $300 to stave off the threat.

As the situation grew more dire, my anxiety piqued, and I looked for outside help, a non-profit, a government agency, anyone. There was nothing. Now, there is a Consumer Financial Protection Bureau, which claims it will help students with loans. But it directs people to the ombudsman at the Department of Education. How effective either of these entities will be is anyone's guess. What is absolutely clear is that help is needed. In no other country are students borrowing such staggering sums of money. A simple technical glitch, like mine, could literally cause bankruptcy, except that you can't take bankruptcy on student loans.

Finally, I made a breakthrough. For the first time ever, a sympathetic collections agent gave me a phone number to the lender's executive suite. Before, they would only give me a fax number. When I called, the first question they asked was, "how did you get this number." Their attitude towards customers was sickening, but I stayed focused and laid out my case. A few weeks later, after more than a year of abuse, the lender deferred my loan. My case was irrefutable -- I was never a graduate student and a graduate student loan should never have been approved. Yet despite the obvious, it all came down to a phone number.

That is what makes these companies so frightening -- most people don't have the time or energy to deal with their ruthless tactics. I wanted to give up so many times I can't even count them all. Students who are planning to borrow should learn from my case and be extremely vigilant about the type and terms of their loans. Most importantly, they should know their rights as borrowers and where to turn if they encounter trouble. A technical glitch can become a nightmare, and it can happen to anyone.