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I have more student loan debt than many morgages. What do I do?
March 18, 2010 5:05 PM   Subscribe

I have ~$100K in student debt...from undergrad. A very long story with legal, emotional and financial questions after the jump.

This will be very lengthy. Apologies in advance.

Too make a long story short, I grew up in a very small town in the midwest, the sort that no one ever leaves. I worked extremely hard growing up to gain acceptance to an elite university far from home, which I did.

This was during the height of the easy lending boom. My situation was common: my father made too little to simply pay for me to go, but made too much to receive any significant aid. And so, in order to go, I was going to have to pretty much take it all out in student loans.

Now, I really knew nothing about finances when I was 18. I was a heady intellectual kid who lacked a lot of common sense and life skills. Furthermore, my acceptance to this far-away elite school was foreign not just to my family but to my entire town. I was like the hometown hero, and I was told by most everyone that it would be worth it, that student debt is 'good' debt, that 'what an opportunity!' etc, etc.

Couple that with aggressive marketing by the largest lender in my home state, especially aggressive marketing for private loans, and my own determination to attend this school, I signed the papers for the loans I supposedly needed to go - not really understanding (at all) what I was getting myself into. I'm not trying to make excuses, just trying to explain why and how I got myself into this situation.

School was a shock. Having been pretty isolated as a kid, I was pretty surprised to discover that most of my fellow students had parents who could just write checks for their tuition, give them large amounts of spending money, etc. Not wanting to let myself, my family or my town down, I just buckled down, worked very hard, and didn't really make many friends or 'connections,' as I didn't have an extra dime to spend going out, etc. I was awesome at school. I graduated with a near perfect GPA, two majors, etc. I had planned to take a year off and then hopefully enter grad school and pursue a career in academia.

But then my student loan payments came due, and for the first time I really realized how fucked I was. I had never been completely financially independent, had never really understood what 'wealth' was, and learning all of this the hard way was, well, very hard. Suddenly grad school became not an option, as I didn't want to take on more debt. While many of my fellow students had the leisure to travel abroad a bit after school, wait for a job they really wanted, take some unpaid internships, etc., I had to immediately take whatever jobs I could find. Most of my loans are private loans, which makes deference, forbearance, and forgiveness essentially impossible. Around this time I basically had a huge breakdown. My life and my dreams felt crushed, I felt hopeless, alone and downright angry. It became hard to more forward.

To make matters worse, of course, the economy collapsed just as I entered the workforce. Finding a job as a recent grad with no experience was next to impossible. My parents weren't able to help me out at all, so I worked odd service jobs until I got an office-y job in the non-profit sector. It isn't at all what I had seen myself doing with my life, I really don't like it all that much, but I don't have many options. I make a small salary, but it's enough to meet my minimum student loan payments - which barely cover the monthly interest. I have health insurance and got on meds - which have done wonders - and I feel a bit less anxious about the whole thing. But still, not a day goes by that I don't think about it, that I don't feel regretful and hopeless, that it doesn't give me little moments of panic.

I'm smart, talented in many areas, and very hard-working - yet my future looks increasingly bleak. Things like going to grad school, buying a house, starting a small business, taking any sort of risk feels pretty much out of the question. To make matters worse, a year after I graduated, my alma mater started this program where students from families making less than $100K a year either paid no tuition or very little. Coupled with looming student loan reform, I get into a bad cycle of self-pity - like I feel I did everything right growing up, and largely in part due to timing (economic, political), I screwed myself by just trying to get a great education.

My questions are:

1) Legal (YANML/YANAL): in the past three years (coincidentally the years since I graduated), my private student loan lender has come under state and national scrutiny, and is often cited as the apotheosis of the broken student lending system. There's been a deluge of scandal surrounding the firm. Emails were subpoenaed which detailed the firm's plans to "very aggressively" market private loans to students and families, turning them away from safer - and cheaper - government-backed loans. Myriad ethical complaints have been filed against them, accusing them of false advertising for marketing themselves as having "the cheapest school loans in the nation," which is untrue, for not giving adequate information to students before giving them loans, for persuading students to take private loans instead of government loans, and for making students borrow more money than they need. They've been attacked for not being transparent in the slightest, for paying executives and board members extravagant salaries even as students of this state had the highest student debts in the country, and for seating board members who had conflicts of interest. The state issued a mandatory audit (which i think is still underway), forced the removal of several board members, etc.

On top of the ethical concerns surrounding my lender, the school I attended was also part of the financial aid workers taking kickbacks scandals. While I have no proof that this occurred between my lender and the financial aid office of my school, it's a troubling side note.

Now, I know that I and I alone bear responsibility for this mess - and I'm not looking for an easy legal out. On the other hand, I am growing increasingly concerned, the more I research the allegations, that the money lent me was done so in an unethical way. I was one of the students they aggressively marked private loans to, persuading me it was the best option, that it was necessary for me to do if I wanted to go to school, etc.

Granted, any sort of hard proof beyond ethical accusations, the state audit and lots of terrible press, I don't have any hard evidence that anything explicitly illegal took place.

Is is worth contacting a lawyer and discussing possible options or actions in this regard? Are there other ways I might use these allegations to negotiate different loan terms? If so, what other information might I need and what would be the best way to proceed? Or is that a terrible idea and I should just let the legal thing go and accept it?

2. Economics. I work a full-time salaried job + a small part time job in order to afford living. I make about $2,200 a month and pay $700 on my student loans (I'm on a gradation plan - my payments will go up every year). I save a little each month, which is tough, and I live like an ascetic. Given the job market, I don't see myself being able to find a higher paying job anytime soon. I have no other debts or financial obligations, and don't plan on acquiring any.

Outside of continuing to pay and not default, do you have any other advice on how to manage this debt? If I had to pay the whole thing, what would be the fastest and most efficient way to pay it off?

3. Emotional. The debt is like a chain. I struggle with some pretty serious depression and anxiety to begin with, unrelated to the debt, which I sort of manage with medication. The debt on top of all of this just makes things worse. I have an amazing partner I've been with for some time - and we are very happy together - but I worry that by not leaving her I'm holding her back from a prosperous life. because of the debt I carry. She's very supportive and reassuring about the whole thing, but it eats at me.

Lastly, what are the ramifications of moving to Mexico, Canada or overseas and simply leaving the debt behind? I know this seems like a terrible idea on many fronts, but desperate times call for desperate measures, and I'd be lying if I said I didn't consider it with some frequency.

I know - I made my bed and now must lie in it. But advice on how to deal with the aforementioned issues would be extremely helpful and encouraging.

Throwaway email: arthur dot mcpants at gmail dot com.

Thank you for reading this short novel. You guys are the best.
posted by anonymous to Work & Money (32 answers total) 24 users marked this as a favorite
 
I work a full-time salaried job + a small part time job in order to afford living. I make about $2,200 a month and pay $700 on my student loans (I'm on a gradation plan - my payments will go up every year).

I'm assuming you maxed out federal aid when taking out your loans, so I think that part should, at the least be income contingent now.

but I worry that by not leaving her I'm holding her back from a prosperous life.

Don't feel like this. She loves you. She'll let you know if she feels like you're holding her back. Don't leave her.
posted by anniecat at 5:19 PM on March 18, 2010


Some branches of the military will repay certain types of school loans, in varying amounts, if you enlist, with various other conditions attached. Probably not what you were hoping to do for the next 4 years but if skipping out on the loans is on the table, maybe this is too.
posted by lakeroon at 5:31 PM on March 18, 2010 [1 favorite]


Aw, man... I feel for you. Money troubles foment anxiety and poor self-worth like almost NOTHING else.

I don't believe you mentioned your undergrad major... however, depending on what it was, there may be state/federal/private student loan forgiveness programs for which you may be eligible.

Another idea which may be viable, depending on your undergrad degree, is part-time tutoring for SAT prep courses (or GRE prep, assuming you can take and rock that particular test in your spare time). Princeton Review, et al usually pay pretty damned well, and odds are they'd be impressed by your academic history thus far.

Sorry I don't have more ideas... it's a rough situation. Stay strong, know that you're NOT in this mess due to any personal failings of your own and resist the urge to flee to Mexico. :-)
posted by julthumbscrew at 5:33 PM on March 18, 2010


This is general advice on point 1 -- I'm not sure of any of the schools involved, or the up-to-the-minute state of the prosecution, but I can tell you have a strong sense of responsibility and you feel that it's moral to pay off your debt. This is true (as much as any moral sense can be 'true'), but I encourage you to remember that the student loan company, their debt collectors, their shareholders and their office workers don't see this as an ethical situation (although they may use that language when they interact with you). You are a kind of renewable natural resource to them, and they want to keep you paying absolutely as much as they can for as long as they can. They have signaled their ability and willingness to break legal and ethical rules to do this -- I think you, at the very least, should use the law as it stands to your maximum personal advantage. This may include hardship waivers, calls for renegotiation (my wife was shocked to learn that the individual loan officer she interacted with had the power to renegotiate certain terms, and could be worn down by frequent contact), the most generous possible interpretation of your 'ability to pay', etc. etc. It sounds like every bit that you loosen the terms of this loan will improve your quality of life.

And I know this isn't something I can say through the internet and you'll just automatically start to believe, but this is not something you should be ashamed of. Not just because loan companies have made a living of exploiting young, idealistic kids who believe (rightly!) in the power of education -- also because at the end of the day, you took money from someone and used it to explore the world. They can't take away what you've gotten out of them -- and what they had (money) serves us all much less than what you did with it (educate yourself).
posted by Valet at 5:45 PM on March 18, 2010 [2 favorites]


$100k just for undergrad? Holy shit.

Can you try to get a federal job that has loan forgiveness?
posted by k8t at 5:48 PM on March 18, 2010


Is Teach for America something that might be of interest? They have some loan forbearance/interest paying benefits, and in some areas apparently loan forgiveness is a possibility. I haven't done it myself, but if you're up for teaching for two years, it might be worth looking at.

You might also try contacting your school's financial aid office. They won't be able to help change your loan terms with your loan company, but they might have some good advice as they should be up to date on all the current student aid options available -- if consolidation is an option (or a wise one), etc. If nothing else, they might be able to help talk to you about your hopes of going to grad school and how to pay for it.

Good luck with everything!
posted by sldownard at 5:49 PM on March 18, 2010


I'm e-mailing you.
posted by Eyebrows McGee at 6:15 PM on March 18, 2010


Default. Consult an accountant or attorney first to make sure these loans are actually dischargeable in bankruptcy etc. You are screwed for a few years though so perhaps first get yourself into grad school and secure those loans. Then default. I feel a little dirty saying this, but the past year or so has engendered so much hate against the finance industry.

Of course you can just wait it out. My wife and I both took on a lot of education debt and it came due at not such a hot time in the economy, but then things got better and ten years later we were able to easily pay off what had been an essentially similar staggering debt.
posted by caddis at 6:16 PM on March 18, 2010


yeah, I was going to suggest something like Americorps or the Peace Corps which would at least put things on hold for a few years while you do something interesting, take a breather, and build your resumee. Also realize that if you go to grad school in some areas, like the sciences, you won't be accruing more debt.
but i'm in the hole about as much as we speak, so i feel your pain
posted by genmonster at 6:25 PM on March 18, 2010


Default. Consult an accountant or attorney first to make sure these loans are actually dischargeable in bankruptcy etc.

A bankruptcy attorney will almost certainly tell the OP that since 2005, even private student loans have been made non-dischargable except in truly extreme circumstances (like, the borrower is 100% permanently disabled and will never, ever be able to work again). Before 2005, private loans were dischargeable, but they've closed that loophole, unfortunately.
posted by deadmessenger at 6:34 PM on March 18, 2010 [1 favorite]


Yeah, wow, this OP hit close to home. This is, almost literally, my story. I mean, it's almost as if I read my own life story. Jeeze. It's definitely very very tough, especially the emotional chain aspect.

Did your parents cosign? This is very important. Is the loan in your name, or is their name on it? If you DO leave the country, they'd be on the hook if their name is on it (I thought about the same thing, and that's what keeps me from skipping and running at times). And yeah, the debt will most likely follow you through a bankruptcy.

As far as paying it off quickly: do not save. I mean, you want to get a small nest egg to cover like..3-4 months rent and living just in case, but you shouldn't save when you have large amounts of debt, because you're losing money on the deal (unless you can guarantee a risk adjusted return higher than the cost of your debt...yeah, doubt that's gonna happen). So basically get the nest egg, and start paying down principle. That's the only way to not be tied down for the foreseeable future: put every penny towards the debt. Hopefully if you can up your salary with but keep living on very little, you can keep paying down principle. As the principle goes down, keep paying more, and more will go towards principle. The killer with debt is that the payments at the beginning are paying mainly interest, so if you can throw some more money at it, all the better.

As far as loan forgiveness programs, joining the military, etc...it really depends on your loans. Most private loans don't qualify for any of these things.

It's tough. Hang in there.
posted by wooh at 6:58 PM on March 18, 2010


If you really want to be an academic and did so well at school, I would pursue it. If you are interested in an academic job, most PhD programs will cover your tuition and pay you to be a TA. At the same time, you can defer your loans while you are in school (even your private loans, I believe)

You should definitely look into improving your work situation, because being miserable at work and being so deeply in debt is a bad combination. If you are most concerned about the debt, you will want to find a job that pays much, much better so you can pay off the loans. Tutoring part time is a great option, SAT prep, etc. (I'm assuming you don't have wall street type skills to broker).

Third, see if bankruptcy is a viable solution. I would consult a lawyer on that one.

Finally, do not leave your girlfriend. She loves you, not money, and you will be even more miserable single.
posted by rainydayfilms at 7:33 PM on March 18, 2010


Do you live in NYC or Boston? If you do there are tons of families who will hire you to tutor their kids in various subjects and/or the SAT for north of $50 per hour.

As for default: pretty much impossible.

I think you said you're in therapy; if this is correct, good. Else, get a therapist.
posted by dfriedman at 7:54 PM on March 18, 2010


If you really want to be an academic and did so well at school, I would pursue it. If you are interested in an academic job, most PhD programs will cover your tuition and pay you to be a TA. At the same time, you can defer your loans while you are in school (even your private loans, I believe)

If you defer private loans, the interest will keep accruing, meaning that in the 5+/- years it takes to get a PhD, the principal would skyrocket. He can definitely make his dream happen but the ideal would be to pay down the principal a bit until the grad school payment + tutoring on the side (a very good idea!) can pay the monthly payments.
posted by wooh at 8:14 PM on March 18, 2010


I had planned to take a year off and then hopefully enter grad school and pursue a career in academia. ... I worked odd service jobs until I got an office-y job in the non-profit sector.

Stop, stop, stop. You have $100,000 worth of debt, your parents can't help, you're considering going into academia, and you currently have a job in the non-profit sector.

That debt isn't dischargeable into bankruptcy. Everyone has made great suggestions by pointing you in the direction of loan-forgiveness programs and income-contingency programs.

But what you really need to do is rethink all of your career goals. Get back in touch with your elite university's career office and ask them about higher-paying jobs in management consulting or finance, which truth be told, is actually still hiring if you have a good academic pedigree. They can even put you in touch with alumni.

That career in academia that requires a humanities Ph.D.? Just don't go. You're the very profile of the sort of person who will get hurt the most in an attempt to pursue a career in academia.

And whatever you do, make sure that the interest doesn't get capitalized into the principal.
posted by deanc at 8:26 PM on March 18, 2010 [8 favorites]


$100k just for undergrad? Holy shit.

I have quite a few friends with this much debt from undergrad. Mostly I just want to pop in and tell OP that you have nothing to be ashamed of. I "only" have around $40k from student loan debt but what I've seen is that a large population of people who graduated around the same time as me--turn of the millennium--were essentially prayed upon by private liberal arts schools and predatory loan companies. Our parents were unprepared for the sort of debt they were encouraging us to take on (because, back in their day, taking out loans for college meant something well under $10k). Hell, even my sister, who graduated high school five years before me in the mid-nineties, was shocked by my loan interest rates (mostly low at 5-7%, nothing compared to some friends who have ~10% variable rate loans) as hers had only been around 3%.

I think there are some great suggestions here already. I'd just encourage you not to be ashamed or contrite. We didn't do anything wrong; it's the predatory lending companies and the schools that allowed them to profit off of us that should be ashamed.
posted by PhoBWanKenobi at 8:51 PM on March 18, 2010


inding a job as a recent grad with no experience was next to impossible. My parents weren't able to help me out at all, so I worked odd service jobs until I got an office-y job in the non-profit sector. It isn't at all what I had seen myself doing with my life, I really don't like it all that much, but I don't have many options. I make a small salary, but it's enough to meet my minimum student loan payments - which barely cover the monthly interest. I have health insurance and got on meds - which have done wonders - and I feel a bit less anxious about the whole thing. But still, not a day goes by that I don't think about it, that I don't feel regretful and hopeless, that it doesn't give me little moments of panic.

I can't really help you with the debt but this? is completely normal.
posted by fshgrl at 9:04 PM on March 18, 2010


A bankruptcy attorney will almost certainly tell the OP that since 2005, even private student loans have been made non-dischargable except in truly extreme circumstances (like, the borrower is 100% permanently disabled and will never, ever be able to work again). Before 2005, private loans were dischargeable, but they've closed that loophole, unfortunately. - deadmessenger

Pretty much this. While there's an oddball case going before the Supreme Court from the 9th Circuit where in brief, filing a Chapter 13 and simply claiming an undue hardship, and so long as the Feds don't notice in time and contest it, you get the discharge...it's pretty much what deadmessenger said.
posted by Atreides at 9:19 PM on March 18, 2010


"Suddenly grad school became not an option, as I didn't want to take on more debt."

Although this may seem counter-intuitive to you, you may actually be better off going back to school and taking on more debt because doing so would allow you to convert your current debt into a more manageable form as well as eventually have a portion of your debt forgiven -- possibly even a greater amount than the additional net debt you would take on by going back to school.

Here is how you could do it, if you were so inclined:

1. Go to grad school part-time while continuing to work. Choose an inexpensive program at a school where direct federal student loans are available (ideally for a degree that would further your career and intellectual interests, but if you can't find such a program then just do a cheap and easy distance-learning Masters degree in whatever). Enrolling in 6 credits/semester should put at least some of your loans into in-school forbearance, which will give you some immediate breathing room in your monthly cash flow.

2. Only take out federal loans (Stafford, Grad PLUS) but take the MAXIMUM possible every year. Use the excess (after tuition and books) to pay down the balance on your private student loans. The limits for Stafford loans, both annual ($20,500/year) and aggregate ($138,500) are much higher for graduate students than undergraduate students, and Grad PLUS loans are limited only by your school's cost of attendance figure minus whatever you got in Stafford loans. So if tuition and books are ~$5k/year that's $15k+/year you can put towards your private loans for however many years.

3. Stay in graduate school until your private student loans are paid off and the entire balance of your student loan debt is now in federal loans. If necessary, complete your graduate degree as slooooooooowly as possible (no more than 6 credits/semester, take extra electives, etc.) so as to maximize the number of years in which you can take the maximum available federal student loans and keep them in in-school forbearance. Get two graduate degrees if you have to.

4. Upon graduation, consolidate your federal loans and then enter the Income-Based Repayment program. Your payments will be 15% of your discretionary income, with discretionary income defined as the difference between your adjusted gross income and 150% of the poverty line for your family size. That should be much more manageable than what you're paying now.

5. Continue to work in the non-profit sector or for government or education after you graduate. After 10 years of student loan payments, apply for Public Service Loan Forgiveness.

Voila! You will have simultaneously achieved your dream of a graduate education AND made your student loan debt burden much more manageable.
posted by Jacqueline at 10:09 PM on March 18, 2010 [84 favorites]


Read this page on consolidating student debt with the DOE. There is hope your private loans can be income contingent.
posted by saxamo at 10:51 PM on March 18, 2010 [3 favorites]


To be more explicit about how the math works out: Since your debt is already so astronomically high, unless you start making substantially more money after graduate school it's very unlikely that your monthly payments under IBR would be enough for you to pay the debt off before you meet the 10 year eligibility requirement for loan forgiveness. So your total student loan payments would be 15% of [AGI - poverty line] for 10 years regardless of the size of your debt or how much it increases when you go back to school.

The only "catch" to taking on more student loan debt to go back to school is that tax law currently treats the forgiven balance as income in the year in which it is forgiven, so you would eventually have to pay your marginal income tax rate on the forgiven amount. However, you won't have to pay that until 10 years after you complete graduate school, so the net present value is low... for example, let's say you go to grad school for 5 years, then 10 years after that you're in the middle class with a tax bracket of 25%, and the discount rate is 5% -- the net present value would be about 12% of whatever additional debt you take on to return to school. Using my previous example of ~$5k/year for tuition and books and assuming an unsubsidized Stafford loan rate of 6.8% interest capitalized on the loan, at the end of the 15 years your total additional debt for grad school would be ~$55k but you'd only have to pay ~12% of that, so ~$7k. If you compare that to the net present value of how much you'd save on monthly student loan payments plus the portion of your original debt that will be forgiven, you'd very likely come out ahead.
posted by Jacqueline at 11:08 PM on March 18, 2010 [1 favorite]


"but you'd only have to pay ~12% of that, so ~$7k"

I mean, the equivalent of ~12% in today's dollars, so it's worth like $7k in today's dollars.
posted by Jacqueline at 11:21 PM on March 18, 2010


Your college career services office is an *incredible* resource. Having worked in one, I can tell you that they are largely ignored by graduating seniors, but have amazing resources and connections. Not only do they have leads on new job postings for your day job, they will often have parents who are calling in looking for a tutor for their high schooler, or alumnis looking for another alum to do yard work, etc. Get a morning off work (and do go in the morning) and go into your career services office. If you are no longer in the same city, CALL. Ask them if they keep resumes on file. If they do, send one in. After they help you, send a thank you card. If they get you a job (even a short-term side job), send them some sort of treat. This ensures that you will be the first person they think of when something good comes up. Make these people your best friends.
posted by stoneweaver at 12:40 AM on March 19, 2010


Let me introduce you to a little thing the Llama family calls 'the rearview mirror.'

This particular set of troubles will at some point be in your rearview mirror, a distant time of trouble like a terrible apartment or lousy relationship.

First, pretty much everyone I've ever known was poor in their early twenties and most straight through their twenties. I hope you like shitty beer.

Second, start figuring out how you're going to plot a career of some sort. Differ the decision about grad school until you're let's say, 26.

Third, erase that $700 from your mind. It never existed. Make it an auto-withdrawal from your account and stop thinking about it, because it will drive you crazy.

I can't speak to the financial/legal part -- I think you can probably move those loans and consolidate to a less snakey lender but I'm not sure about that, but I can speak to the 'stop freaking out' part.

You don't have enough life experience to be looking out over the whole of your life and thinking you pissed everything away by taking out a big loan. You need some perspective. You have absolutely no way of knowing right now whether or not that was a bad decision, and you won't for about twenty years, and my guess is in twenty years you'll feel like it was a damn fine decision.
posted by A Terrible Llama at 3:05 AM on March 19, 2010 [2 favorites]


If this is a PRIVATE student loan then the Op cannot get on the loan forgiveness wagon!

but what I've seen is that a large population of people who graduated around the same time as me--turn of the millennium--were essentially prayed upon by private liberal arts schools and predatory loan companies.

Yup. That was me. Private art school, left around 2002, owe upwards of 100 k.

Predatory sharks. I had no idea what I was signing up for. I was, really, just told to sign here and here because that's what I had to do to go to college. So of course I did.
posted by Windigo at 4:48 AM on March 19, 2010 [2 favorites]


2. Only take out federal loans (Stafford, Grad PLUS) but take the MAXIMUM possible every year. Use the excess (after tuition and books) to pay down the balance on your private student loans. The limits for Stafford loans, both annual ($20,500/year) and aggregate ($138,500) are much higher for graduate students than undergraduate students, and Grad PLUS loans are limited only by your school's cost of attendance figure minus whatever you got in Stafford loans. So if tuition and books are ~$5k/year that's $15k+/year you can put towards your private loans for however many years.

Actually, this is a pretty good idea, and I'd like to second it. PLUS loans weren't practical for me for some of my loans since my interest rates were around 7% on my private loans, but by taking out the maximum stafford loans I was able to "transfer" about $20,000 from private to federal loans with a much lower, fixed interest rate.

It really sounds like you have two problems here, OP: you loans and your job situation. So why not look for solutions that will help both? You're in a fairly stable position in terms of employment--this is, in fact, the best time to look for other jobs. Consider jobs that will cover room and board (I've known people who worked at private boarding schools; teaching abroad is another option, and in some countries pays better than the equivalent job in the states) to reduce expenses. Even just a job that pays $100 more than you're currently making a month can help you pay down your loans faster.
posted by PhoBWanKenobi at 5:13 AM on March 19, 2010 [1 favorite]


OP: If you're going to look for a new job, and you want to go to grad school, look for jobs at universities that you might like to attend school at. Then you get the employee tuition discount (sometimes completely free tuition) and your work-->class commute is a breeze. :)

"PLUS loans weren't practical for me for some of my loans since my interest rates were around 7% on my private loans"

If OP wants to go the transfer to federal loans / federal consolidation / income-based repayment / public service loan forgiveness route, transferring a 7% private loan to a 8.5% federal Grad PLUS loan may still make financial sense because then that debt could be included in the consolidation / IBR / forgiveness. If most of the debt will ultimately be forgiven, the marginal cost of the higher interest rate is only the net present value of the marginal income tax rate of the capitalized 1.5% difference instead of the whole capitalized 1.5% difference. The net present value of the savings on the monthly loan payments under IBR and the forgiven portion will almost certainly exceed that.
posted by Jacqueline at 6:05 AM on March 19, 2010


Have you seen the National Consumer Law Center's student loan website? There is a ton of good information there, and the NCLC is a reputable non-profit. You may want to contact an attorney through the National Association of Consumer Advocates and see if you can get a free or low-cost consultation with an attorney.

My only other advice is to not be so hard on yourself. I don't know if you included so many statements that this is all your fault because you were worried about "you made your bed, now lie in it" responses or because you genuinely believe it. But you were 18 and were preyed on by sophisticated and unethical private lenders. They've screwed over a lot of people.
posted by Mavri at 9:12 AM on March 19, 2010 [1 favorite]


I was SO hard on myself after college. I felt like life was over and that I was too old to jumpstart my life. Nothing could be further from the truth. You have no idea how many people much older than yourself are in your boat and start over.

Contact your school's professional services. Pick a job that's high paying. Think about doing things you never saw yourself doing. Become a physicist, a lawyer, a financial consultant, whatever. Go to Grad school. Go to the one that pays you the most. You likely won't have to pay your loans while in grad school. Don't give up. You're not through by a long shot.
posted by xammerboy at 2:19 PM on March 19, 2010 [1 favorite]


Change your payment plan to income based immediately. It will probably reduce your federal loan payments significantly and will start the 10 year clock. If you stay in non-profit or government work, you're loan will go away after 10 years, even if you still have a huge balance. A small warning: the calculator on that site said my payments would be $350 and they ended up being $450. But it's still a hell of a lot better than where they were.
posted by the christopher hundreds at 5:20 PM on March 19, 2010 [1 favorite]


Hmmm - I wouldnt beat myself up about this at all - i think it was 50k a year to go to the us place i was on exchange to - the games not straight at all, you're a good guy in a bad system. You can come hide out in Scotland if you want : ) Dont the bastards get you down !
posted by sgt.serenity at 3:55 AM on April 16, 2010 [1 favorite]


let !
posted by sgt.serenity at 3:55 AM on April 16, 2010


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