Ask MetaFilter questions tagged with StudentLoans

Which student loans to pay off first: Stafford or private?

Muffpub — Tue, 15 Dec 2009 19:03:02 -0800

Student loans in the United States: I have larger fixed-interest Stafford loans, and smaller private loans tied to LIBOR. Which should I pay back first? Thanks to anyone in advance for being patient enough to read this.

I'm just entering the beginning of my payback period for my student loans in the U.S. and I'm wondering which I should prioritize fiscally and pay off first, seeing as I'm going to have to lower my monthly payments on at least one set of loans.

So I have two sets of student loans:
- A set of three private loans with quite low interest rates (~3.29% right now - around LIBOR + 3%) but which may rise in the future;
- A set of four Stafford loans, three fixed at 6.8% and one mysteriously at 2.48%. (I have not yet consolidated, but plan on exploring that ASAP.) Together the Staffords add up to about 1.5 times the size of my private loans.

A part of what complicates the situation is my ignorance about consolidation, which is something that I have to explore further with Sallie Mae (who services my Staffords.) One of my loans is now a Department of Education loan (but not the 2.48 percent one...) and I have no idea if I can even consolidate those altogether.

The larger question I'm facing is this: I can focus on paying off the private loans, but get hit by the Staffords' higher interest rates compounding on an already significantly greater sum. And I'm assuming the interest rates, even fixed, will be even higher consolidated / pushed out.
Or,
I can focus on paying off my Staffords, but risk the LIBOR going up past six percent, as it has done in the past, which could really hurt down the line. If these were relatively small amounts I can see it not making much of a difference, but with sums as big as these (over $10,000 each) I don't want to take a decision lightly.

I feel more comfortable owing the government than owing a private lender, but apparently while I was in college the world decided that I could no longer make financial decisions based on fuzzy feelings. So I'm making them based on the hive mind's judgement instead. Thank you all.

Time to pay the piper, but I'm still paying a DIFFERENT piper.

Anonymous — Wed, 25 Nov 2009 13:58:15 -0800

I'm a graduate student who has been in school continuously in Canada for 10 years now. Now the student loan people want to make me pay. What can I do? I'm a graduate student who began university in 1999 in British Columbia. In my first year of undergrad, I applied for, and received, a government student loan amounting to a colossal $260. After that, I did not apply for any further funding until I began my graduate education in an MA program, also in BC. I received student loans for three years as a result of this. I finished my MA, and went on to do PhD work in another province.

I have diligently sent in my forms indicating that I am still a university student and have never had a problem. Yesterday, though, I came home after being out of town for the weekend to find a letter saying I am to begin re-payment as I have used up my 520 months of grace period, even though I am still enrolled in a Canadian (non-BC) university as a PhD student.

This threw me for a loop as I had, a month previous, received a letter confirming that they had received my proof of enrollment and I was still okay to not pay anything just yet, being covered until the end of the semester after my proof of enrollment indicated (I have to do the proof of enrollment each semester). They want me to begin payment on the entirety of my student loans, not just the $260 I borrowed ten years ago.

I spoke with the student loan people on the phone today and they said that all I can do is apply for interest relief, principal deferment, or extended amortization (all of which are described here) and that there are absolutely no appeals available.

I'm totally at a loss as to what to do. I offered to just pay off the $260 from 10 years ago but that won't do anything, apparently. I really can't afford to start paying my student loans back right now being, still, a poor graduate student. I don't know what my options are beyond those three things above. Can anyone offer any advice (and I fully recognize that you are not my lawyer, accountant, banker, financial advisor, or anything similar).

Private Student Loans

rossination — Wed, 30 Sep 2009 13:35:30 -0800

Help me figure out my options for a small (~$4000) student loan. First of all -- forgive my noobish questions here. I am new to student loans and this whole process is getting overwhelming. I can't find previous AskMe questions that are particularly relevant, but if there are other pages that will answer my questions, feel free to direct me there.

I'm in my fifth (and final) year of my undergrad degree and have to take out some loans to cover part of my last year. I need about $7000 and I qualified for (and received) $3500 of subsidized Stafford loans, leaving me with another $3500 that I'll need to acquire through a private source.

What are my options for the private loan? I assume that I should be looking at credit unions first. The first one I visited today (WSECU) doesn't offer student loans, and BECU directed me to their online application, which says I'm ineligible for a loan unless I co-sign with my parents, as I make less than $3000 a month.

While I don't have a big problem having my parents co-sign a loan, I would much rather do this without them if possible, for practical and personal reasons. I have a pretty good credit score in the low 700s (no credit cards, one $4000 car loan that is almost completely paid off, always made payments on time, etc).

What this boils down to is: am I likely to run into the same restriction that BECU placed on me if I go to other credit unions? My gut tells me to avoid large banks, but should I be looking at Chase (my main bank) or other large institutions? What about Fannie Mae or other companies that specialize in loans like this?

Best strategy for paying student loans?

yeoja — Tue, 22 Sep 2009 14:37:41 -0800

I’m in grad school and work full time. I have several Federal student loans in deferment, all of which are subsidized or unsubsidized with different interest rates. I have an extra $500 each month that I'd like to use towards my loans. If I want to have lower monthly payments when my loans go into repayment, should I make extra payments now towards the interest from unsubsidized loans with a lower interest rate or the principal of subsidized loans with a higher interest rate? Or is there a better approach? Background info: I have 1.5yrs left for school, and I’m 90% sure I’ll continue to work full-time until I graduate. Other than my mortgage and these loans, I have no other debt (car and credit cards paid off). I have ~6 months of savings in a high (well, 1.4%) yield savings account.

My loans are distributed something like this:

Loan A: Unsubsidized, 1.8% interest rate, $5,000 balance

Loan B: Unsubsidized, 6.8%, $12,000

Loan C: Subsidized, 2.8%, $6,000

Loan D: Subsidized, 6.8%, $3,000

Right now, I make $150 monthly payments on the unsubsidized interest on Loans A & B. My lender will let me specify how I want to apply the $500 each month (Loan A/B/C/D, interest or principal). I know the usual advice is to target the higher interest rates first (as discussed here), but I’m unsure how this applies with subsidized vs unsubsidized loans. For example, Loan A has a lower interest rate than Loan D, but Loan A has a higher principal balance and is unsubsidized.

I want to make the smartest decision with these payments. My goal is to get rid of my loan fast, but I also want to minimize my monthly payment amount when my loans go into repayment. Should I focus on the principal of Loan B since it’s so high? Or should I spread out the money across the loans? If I have the money to pay off Loan D, should I go ahead and do that?

My dreams didn't work out, now what?

Anonymous — Sat, 12 Sep 2009 22:50:49 -0800

Liberal-arts-grad-filter: How can I parlay my existing skills (qualitative, creative, communication-oriented, artistic, empathetic) and experience (tutoring, writing/editing, activism) into something with a sustainable income and job security? I am a 42-year-old American woman with advanced degrees in anthropology, creative writing, and women's studies. My employment history includes tutoring as a grad student, entry-level journalism, freelance writing, and a gamut of "B" jobs to fill the gaps. The most money I have made was as a technical writer for a trade union. I wrote manuals for apprentices. I was hoping to continue as a tech writer but found that contracts like the trade union were a rarity, and without IT experience I would not get many job offers in the field. I have $50K in student loans already and have never made more than $30K in one year, so returning to school would be a last resort. My parents are exasperated with me and will not help because nothing has really worked out for me so far. I don't expect them to be responsible for me anyway, and besides they don't have a ton of money either.

When the economy tanked, I lost all my freelance clients. I wanted to work in a more structured environment anyway, and I soon found a grant-driven, temporary position in pre-election activism. When that ended all I could find was an $11/hour clerical job that I just found out will end in six weeks.

When I was younger, I decided to pursue my dream of being a novelist at all costs, so I neglected my professional development and have lived an unconventional, Bohemian lifestyle, and I feel a lot of shame and regret at the way this has turned out. I have no assets, no savings, and no retirement fund. I do not have a spouse who can carry me through these tough economic times. Instead, my husband and I are separated and he is trying to establish himself in an artistic field also. Neither of us have kids, and he is a lot younger than I am. Our relationship is still very loving, but its future is up in the air. I initiated the separation, and our unstable financial life was a big part of the reason. My tiny income carried us more often than not.

We live in one of the states with the highest unemployment rate. All the instability in my life has propelled me into a nasty mix of anxiety and depression, and I'm being treated with medication and counseling. I finally feel like I can concentrate on something other than my mental health and I really need to start earning much more money. But because I haven't focused on how to be a truly professional adult, I have only the vaguest idea of how to get a better job. My core issue is my shame and my fear that I'm not really all that marketable -- that I'm nothing more than a dilettante slacker and that all any employer wants are things I don't have, like quantitative skills and an ability to multi-task and focus on detail. I try with my clerical jobs, but it's really hard -- I'm a very abstract thinker. I would love to become a counselor, but I think that is out of reach due to the student loans I already have. I didn't mind tech writing; at least I was working with words and making good money. I feel I don't have the luxury to pursue what I really love doing (journalism). The field is dying, and even at its best it didn't pay enough for me to save and pay off debt. My dearest dream was always to be a novelist, and I have started but never finished a novel. Right now I am too stressed out about money and the future to even think about fiction writing. Plus, I'm mad at myself for putting all my eggs in the basket of that difficult dream without a practical backup plan. For a long time I considered myself inept at anything pragmatic and I'm trying to change that.

I'm looking for any advice on how I can get out of the hole I've dug for myself. I sort of have a plan but I'm not very confident or hopeful it will work out. Part of my hopelessness stems from knowing the economy, part of it is my low self-esteem. My plan is to start attending local meetings of the Society for Technical Communications. I don't have the money to join right now but at least I can attend meetings and start networking. I want to improve my resume; perhaps they can help. I will also set up my LinkedIn page. I currently have my own apartment; I'll save money by moving in with a friend if I have to.

Relocation may be an option with or without my husband but we haven't figured out if we're going on together or divorcing. I'd prefer to stay where I am right now if possible because the changes I've gone through recently have been upsetting enough, and I hope my husband and I can reconcile. FWIW, I've read tons of career books and I'm looking for advice from people in the current job market and the writing field, not from books. I fear that I'm going to lose everything quite soon, including my good credit rating. I wake up every morning scared and alone. I keep imagining myself elderly, as a burden on relatives or a bag lady. Please help me think this all through.

Going back to school: how do I make it happen financially?

itsacover — Fri, 10 Jul 2009 23:01:48 -0800

I'm trying to go back to school. I have bad credit, some unpaid debt, and cannot afford any classes without help... Help! After 5 years, I'm going back to school to finish my undergrad. My current career is turning into a bust and I'm terribly unhappy with it, so finishing my degree seems like a good way to open new and enjoyable opportunities. I have roughly a year left on the degree. In an ideal world, I would quit my job and go to school full-time since I cannot do both at the same time (my field of work requires a completely flexible schedule). I also cannot afford to take classes without any help, even a class at a time. My income covers my bills and that's about it. I have credit card debt along with a few other things (around $3000 worth) that I am slowly chipping away.

Basically, I need someone to explain to me a) whether it's a good idea to try and get loans that would not only cover my school expenses, but also living expenses (I would get a part-time job also), b) how I might make that happen as I have never dealt with any sort of loans before (plus the bad credit!), and c) why this seems so difficult and overwhelming.

I am, of course, going to talk to the financial aid department at my school, but I would love personal experiences as well as advice from those smarter with finances.

Student loans above cost of attendance?

Malad — Wed, 29 Apr 2009 21:11:34 -0800

For doctoral grad school: what does one need to do to borrow more than the school's "cost of attendance"? I know federal loans don't permit this; which private lenders do? Will private student lenders lend out despite a lack of income or assets, and despite previous student loans (though no defaults, and good credit)?

South African Aid!

PaulingL — Thu, 23 Apr 2009 09:32:30 -0800

Friend is from S. Africa. Friend's family is going to have to move back there in August. Friend wants to continue going to college here but says he can't get student loans. Hive-mind to the rescue? A very good friend of mine recently told me that he had to move back to South Africa, but wants to stay here and continue his education in the States. He currently lives in Chicago and would like to stay there (goes to UIC).

Does anyone know how he could get some student loans? Is there anything set up for someone in this sort of situation? I would really love to help him out and would hate to see him leave for S. Africa (as it would mean seeing him only extremely rarely).

Help me out hive-mind!

MBA Wanted: Help me get to Spain!

OuttaHere — Mon, 13 Apr 2009 07:22:49 -0800

How do I fulfill my dream of getting my MBA in Spain? (Argentina is on the menu too). My main goal is to get my MBA, and I am currently a United States Citizen, however I have family in Spain. Morning Mefites,

This is my first question. I am young, have about 2 years of good work experience behind my back, but I am starting to go a little crazy. My wanderlust is taking control and my dream of studying abroad again needs to be fulfilled.

I have lots of family in Spain, my Grandparents were born there and have already spoken with family members who are pretty high up in the government who have told me obtaining a visa should be no problem, even a non-student visa, so I consider myself slightly lucky in that regard. I currently am looking at good International Business Schools in Spain where I can get my MBA. There are several top-notch schools in Barcelona and Madrid that I am looking at. The one problem is that I may not have enough work experience to get accepted (I'm at the complete low point). I think that with a killer GMAT score, my work experience, and my experiences studying in Spain and Argentina previously may help as well.

So what I want from you guys are suggestions, tips or ideas. I am currently in a rut at my job, unhappy, doing the same thing over and over and I realize this is part of life, but I really want to move forward and get my international experience going. How can I, a young 20 something get to my MBA in Spain. The main problem I have right now might be funding, I know I will have to get student loans for my MBA program so any suggestions on how to fund a plan like this would be of great help.

Also, does anyone else have experience getting MBA's abroad, especially in Spain?

Another thing I am looking at is potentially saying HECK with my current job (which I think is great experience) and moving down with my friend in Buenos Aires for a year in Argentina, and maybe trying to find work there that would qualify as experience. However I'm not sure if I could get anything more than an under the table teaching job there. Any suggestions?

This is my first Mefi question, you guys are the best, so any help would be great!

Cutting the umbilical cord

sixcolors — Mon, 06 Apr 2009 10:38:23 -0800

This moving out thing, uh...how do I do this (financially)? I often complain about my parents to my friends, random people, and even on here.

The most common comment/question I get is "Hey, why don't you just move out???"

If it were only that simple...

This is something I would love love LOVE to do, but I don't think I can afford it. I am underemployed. Full time jobs are hard to find. I do have the option of getting a second part time job, but that wouldn't give me benefits like a full-time job.

I have 50K worth of student loans, how on earth I would be able to pay rent, bills, gas, and food along with those student loan repayments (I calculated it will be around $500-700 a month)?

Well, I know I am no unique snowflake in this regard. I am assuming most 20-somethings who do live on their own, have some sort of debt...and car payments (thank God I don't have to worry about that one). I am wondering how do they do it? Am I missing something?

With my situation, I want to know what my options are.

Can I turn a family loan into a loan that qualifies for loan repayment?

hurricanemag — Thu, 26 Feb 2009 07:33:17 -0800

Can I turn a loan from a family member into a loan that qualifies for loan repayment? I completed a very expensive nursing degree a year ago with a BSN and an MSN and am working as a nurse practitioner. I was fortunate enough to have an aunt who was willing and able to loan me the money during the program and I'm now paying her back interest-free. I know what a great deal that is, but it is still going to take me >15 yrs to pay her back and I have looked into some loan repayment programs that might help speed up the process.

The non-profit I currently work for qualifies as working for an under-served population, but I'm wondering if there is any way to turn my family loan into a qualifying loan. The nursing education loan repayment program I want to apply to (http://bhpr.hrsa.gov/nursing/loanrepay.htm) lists qualifying loans as:

2) Examples of Eligible Loans
Nursing Student Loans;
Stafford Loans; and
Supplemental Loans for Students

3) Examples of Loans Not Eligible

The following are examples of financial obligations that do not qualify for repayment by the NELRP:

• Loans for which the applicant has an Existing Service Obligation (see Definition of Terms);

• Loans obtained for training in vocational or practical nursing (LVN/LPN);

• Loans obtained from family members or private institutions not subject to Federal or State examination and
supervision as lenders;

• Loans made prior to or after the applicant's qualifying nursing education;

• Loans obtained for non-nursing education;

• Loans that have been repaid in full;

• PLUS loans (made to parents);

• Any portion of a consolidated/refinanced educational loan that is not clearly identified as being for
reasonable educational expenses and reasonable living expenses incurred for qualifying nursing education
by the applicant (See Definition of Terms).

• Consolidated/refinanced educational loans that include any debt other than eligible educational loans of the
applicant;

• Credit card payments or personal lines of credit;

• Federal Perkins Loans (unless the applicant can provide documentation as indicated in Section L.3
(Instructions for Completing Required Supplemental Forms) that such loans are not subject to cancellation).

Has anyone had a similar situation? Can I take out a loan that would qualify and pay my aunt back? Or is it just too late at this point?

Any input is appreciated, Thanks.

New student loan payment calculations given 25th year forgiveness?

warsawjude — Sun, 08 Feb 2009 18:49:52 -0800

New student loan regulations mean that govt consolidated student loans will be forgiven after 25 years but the balance may be taxed as income. Seems that's being debated but stands as taxable at this point. I work public service = make little cash. How to calculate how little I can pay through income-sensitive payment ($165/month currently on 48K at 6.875%) without getting slammed too much at 25 years? Want to see my options for cash flow/403b money now vs. balance later. Thanks!

SallieMae won't cut me a deal, who else will?

SansPoint — Thu, 29 Jan 2009 20:12:25 -0800

How can I consolidate my PRIVATE student loans, to make my financial life a little easier? I recently consolidated my student loans through the Federal Loan Consolidation program. My payments are now over $100/mo less than before, which is wonderful... but I could only consolidate my Federal Loans, the Staffords and such. I have about $40,000^1. in loans through Sallie-god-damn-Mae, though, that I'm paying $250/mo on. I tried consolidating those through Sallie Mae, but $40,000 isn't quite enough to consolidate with them, and now they're not even doing private loan consolidation. This is bad.

There are private loan consolidation places, but... who the hell do I trust to a) be legit, b) not go out of business or go bust due to the stupid economy, c) be *really* legit, d) not screw me over. Honestly, I don't know where to look. This is, as always, where MeFi comes in.

If it helps, right now I make around $30k a year, before taxes, insurance, and other deductions at my day job, and a varying second income of $400-$800/mo (on average) at my night job. Actually, my night job netted me $17,0000 last year, but that was my only source of income and it was five days a week—I'm down to four days a week now. I started my day job in October, after graduating in May. I don't have the cleanest record in borrower history... failing out of college, missing payments due to low income, and general idiocy, but I've begun to make up for it.

Who can I trust to take these private loans, and say, "Buddy, you can pay us $200 a month, instead."? Help!

^1. All told, having only this much in loans isn't as bad as some people, but since I'm working two jobs to make sure my head stays as much above water as it can right now... well, I don't want to hear any finger-waggling on financial irresponsibility.

How to make sure I get the best financial aid while still deciding between schools.

Anonymous — Sun, 25 Jan 2009 13:00:11 -0800

FinancialAidFilter: How do I decide whether to fill out the FAFSA (for law school) with or without parental info when some schools require and some don't? I applied to several schools, but there are three main contenders.
School A- I have already been accepted to this school. They require all students under 28 to include parental information on the FAFSA. I'm 24 years old, which means I am not required by the government to include parental info.
School B- I have a good chance of being accepted to this school. They don't require parental info on the FAFSA, but do require parents financial info for students under 28 on a separate form from the school.
School C- I don't have a great chance of getting in here, but if I did, it would be my absolute top choice. They don't require parental information at all for students 24 and over.

Most likely, I will end up in the situation of choosing between schools A and B. School A is weighted slightly higher than school be, but really it may come down to what aid packages I'm offered. C is the most expensive of the three schools, so on the off chance I get in there, I would need all the help I can get.

My parents combined made between $50k-$60k last year, and I made just under $30k, I have a younger sister in her 2nd year of college, and all three schools have annual costs of attendance of $60k-$70k, so hopefully that will make me fairly competitive for need-based aid. I don't receive any parental financial support, though, so I really need as much financial aid as I can get. I really don't want to be working nearly full-time in law school like I did in college to support myself. If some schools don't require their info on the FAFSA, I hate that I'm screwing myself out of better aid (like more subsidized vs. unsubsidized loans) by having to include parental info for the sake of one school. School A says that if I just want student loans, I can fill it out with just my own info, but I don't want to keep myself out of the running for their need-based grants.

I could wait until I hear back from the other two schools so I can better decide what to do, but I know that earlier is better, and finding out what need-based aid I am offered from each school will help me make the best decision.

Any advice?

Twice-Consolidated Student Loans?

nosila — Mon, 15 Dec 2008 14:48:28 -0800

I have already consolidated my student loans (federal Stafford loans) with Brazos, and I am not happy with them. Is it possible for me to move these loans to another lender? Is there a down side to doing so? I have around $50,000 in debt that I'm currently deferring (about to be a student again). I recently screwed up and agreed to a temporary forbearance while some deferment paperwork went through. As a result, the company is refusing to allow me to keep my incentive plan, which means that I'll end up paying significantly more in the long term.

I do plan to continue to appeal their decision, but assuming they will not reinstate my incentive plan, any suggestions? FYI, I plan to spend the first five years or so after my PhD living very frugally (which I'm completely used to) and paying everything off. Despite my loan debt, my credit is pretty decent. (Not stellar, not bad.)

Thanks!

Has my student debt condemned me to a life of mediocrity?

Anonymous — Tue, 28 Oct 2008 09:53:24 -0800

Due to a breakdown in negotiations, I have $30,000 more student debt than I thought, leaving me with $35k. I live very, very simply, and after college I wanted to go travel the world for a few years and not worry about a career or marriage or consumer debt. Am I totally, completely screwed into a life of mediocrity? The practical side:

I don't see how I could ever in a million years pay this off. Even if I paid $500 a month, which is twice my living expenses save rent, it would still take six years to get rid of. And $500 a month means six years of the best part of my life doing nothing but working. Even if I could manage to throw $100 a month at it, that debt would be hanging over my head for the rest of my life.

What are my options? Is there any way to dig myself out of this? I don't think I know ANYBODY with this much debt, and I feel like there's no way out.

From a philosophical standpoint:

I don't know what to do. I never actually wanted to go to college, but I was convinced by various agents because of the alleged fantastic benefits an education would bring me. I've been waiting to be free since I was fourteen, and it was always just around the corner. Everyone's always said, "Just wait till your done with high school!" or "When you get that BA you can do whatever you want!" Now, it's "oh just get a job, pay off that debt and you're totally free!" It's pretty clear I've been lied to, and I'm angry that I've been trapped by a system I never wanted to be a part of in the first place. You can tell me over and over again how important college is, how I would go nowhere without a BA, but it's now pretty apparent that I'm going nowhere with one.

I do not care about money or cars or mortgages. I do not want a family for years and years. I just want to see the world, pay my own way and free myself from the mindlessness of working a 9-5. Now I'm afraid that this debt will force me to, and when it's gone I will be so deep in a life I always planned to avoid that I cannot escape.

I feel completely broken, hopeless and idiotic for getting into this. What the hell do I do?

Are there any student loan repayment help agencies?

smashingstars — Wed, 17 Sep 2008 15:21:27 -0800

Are there any credit counseling or 3rd party agencies that work with student loan repayments? My husband has a substantial student loan. Health problems hit both of us this year, I'm unable to work, thus we're unable to pay the full $300/month for now and want to lower payments. We have every reason to believe we can go back to $300/month in 12-18 months.

His student loan company is terrible, constantly making errors and they employ completely unhelpful customer service people. They say he's ineligible for any more deferments or forbearances and they claim he's on a graded repayment schedule but it made no difference in payment amount. He offered $200/month payments and they hung up on him.

Is there any kind of third party agency that can help us? I don't even really know what I'm looking for, but a web search isn't revealing anything except government pages threatening those who don't repay.

Or are we just stuck?

So i'm frugal, but what's next ?

fizzix — Tue, 26 Aug 2008 12:28:42 -0800

I am a frugal person entering his senior year in college [age 21]. I have been following advice like the stuff in thread 84915and thread 99852 and living below my means. I sought advice in Financial books for college kids my age [for example, generation debt], but left feeling wanting more because they focus primarily on how to cut expenses [skipping the latte, etc]. So, I have some student loans already, but will need more for my senior year. I also have some money set aside, but I should I use this money to lower the loan amount that I'll take out or use this money for an investment (Roth IRA, index fund), and take out more for my student loans ? Here's my scenario:

- I have NO debt - EXCEPT from my Student Loan Debt

($46,025.40 for undergrad so far, heading into my senior year).
($27,519.40 are government loans - fixed rates, ),
the rest is from a private company, at variable rate -
A combination of federal and private loans
I am getting VERY Scared about affording this (right now, I have
estimated payments of $ 541.34, given the current interest rates and a normal payment schedule that is not income contingent).

- I have NO credit cards.

- I do have a checking account (with a debit card).

- I have a saving account (only 1.05% APR) of $ 800 (a 6 month
emergency reserve).

- In the past 5 months or so, I have saved 40 % of my income to a
general savings and a checking account

(it's only 1.05 APR, and I know there's better ones (ING, etc) but
both my [savings and checking]
banks charge a rather large fee (of $30 or so) for transactions from
one bank account to another,
for retirement.

My most important question is THAT I have received conflicting advice
regarding the following
situation:

This fall, I'll need to take out an additional $5,500 (estimated) for
living expenses (this is living frugally, rent, utilities, etc) (I am aware that I could work off campus more hours, but I have tentatively decided not to do that.
(I decided not to work more than 12-15 hours a week, while in school,
which can be for metatalk if you want to discuss that).

Should I take that 40% [which I saved - $650] and my federal work study job income ($2220) towards my expenses and take out a smaller loan (the advice from a counselor at the school financial aid office) ?
(Because any rate that I get on investing wouldn't be higher than my loan rate)
(I have not applied for the loan yet, so not sure of the rates that I'd be getting. This loan would be a private loan, because I am already taking out the maximum from Stafford and Perkins loans. I am looking at PLUS Loans - another govt loan, but that may not work, because my parents do not want a loan in their name).

Should I take that money and put it into certain investments for retirement (Roth IRA, Index Fund,etc) ?

Should I put that into something more safer like a money market account (Andrew Tobias' advice for those with less than $5,000) ?

What is the best financial/tax situation for a family with a kid on the way?

Anonymous — Wed, 02 Jul 2008 06:27:17 -0800

What is the best financial/tax situation for us? Kid on way, financial aid eligibility concerns. Me: grad student for 2 more years, on a teaching assistantship (this covers tuition, fees, health insurance, and gives me a $1600/mo. stipend) and with some student loans on top (less than $10k/year). I also work in the summers, but make less than $5k. I also receive research grants sometimes ($5k-$15k). In 2008, I will only have been in the country for 2 months and will have an income of less than $5k. In 2009 and 2010 I will be be back on the normal track with $1600/mo. and some loans with perhaps 2-3 months of a travel grant of ~$6k.

Him: working person making a good salary (floating around 6 figures)

New factor: baby on the way at end of year (will be on Dad's insurance and Dad's company covers childcare)

The way that we see it, here are our financial options:

(1) Stay unmarried, he claims baby on his taxes.

(2) Stay unmarried, I claim the baby on my taxes. (But would this screw up my student loan/financial aid eligibility by making me look richer?)

(3) Marry and claim kid together. (Again, would this screw up my student loan/financial aid eligibility?)

Public service loan forgiveness

roll truck roll — Fri, 27 Jun 2008 11:40:54 -0800

So, is there any reason not to go for the new public service loan forgiveness program? I work at a nonprofit that qualifies for the program; my wife works for a small museum technology firm and makes even less than I do. We have loans from college and graduate school spread across four banks - all of them can be consolidated.

We're both pretty clueless about financial things. Based on some very rough calculations, I think that if we were making income-contingent payments, we'd be paying a couple hundred less per month than we are now, a difference that would actually make a huge change in our day-to-day finances.

So really, my question is this: what are we not taking into account? Are there any pitfalls associated with government consolidation? Are there any caveats or loopholes in the forgiveness program? Since the program is so new, I'm having trouble finding much information about it online. I can only assume that other MeFites are in similar situations right now, so if you have more information about how the program works, this might be a good place to post it. Thanks.

Loan Woes

Anonymous — Thu, 15 May 2008 04:12:32 -0800

My partner and I need to acquire a loan for her grad school. The catch(es): She's not a citizen. We're gay. We don't have the first clue how to go about doing this. Help! My partner is from Canada. A Canadian loan is out of the question. (Period! Don't even suggest Canadian student aid...it won't help!)

She has one year of grad school left, which will be around $30,000. I make a pretty good living here in the midwest (less than triple digits, but not substantially less), though the two of us must live on my single income, but paying off the loan shouldn't be too difficult. We're young. My credit is right there in the middle, not great, not wonderful.

I've never done this before. Please explain how to prepare, what I can expect, who I should ask (my bank? other lenders?), what criteria makes a lender more likely to approve a loan, should we ask for a personal or financial loan, and if we have a chance in hell of pulling this off, given the current economic climate. I am a babe in the woods, please be kind, and my one caveat must be: please do not pass judgment on our situation, financially, emotionally, or otherwise.

Thanks in advance for your help. It is much needed and much appreciated.

Help Me Make the American Dream a Reality

mynameismandab — Sat, 03 May 2008 19:13:11 -0800

Future Lawyer-Financial Aid-Student Loan-Borrower/Cosigner-Filter: Help me help both and Myself and my Ecuadorian friend achieve the American dream--Many details and questions follow. My friend from Ecuador hopes to go to medical school to become a neurologist, but needs a $20,000 reserve in her bank account in order for her school to take on the enrollment liability and grant her an I-20.

We found that she could get a Sallie Mae loan as long as an eligible U.S. citizen would cosign for her, which I have agreed to do. She will request $50,000 for the coming year but keep only $27,000 and repay the rest, then do the same thing next year. Her total loan request will be $100,000 but will only owe $54,000 plus 5.75% interest.

I have requested contact information for her family living in Ecuador, as well as relatives of hers living in the States (all of which she has provided) and I have full faith that she will pay off the loan.

I am the first person in my family to go to college, am in my own graduate program, and will have accrued about $70,000 in Stafford loans by graduation. I also plan to attend law school in the next few years and will need loans to cover the costs. Currently the annual tuition is $32,000 at the law school I want to attend, but I will not be attending for another 2 or 3 years, so that will put law school at about $35,000 a year for 3 years, or about $105,000.

Given that the lifetime limit for Stafford loans is $138,500, I know that the remaining $68,500 of Stafford loans will not totally pay for school, but I need to keep as much of my loan funding available as possible.

So I have four questions:

1. Will my cosigning for her take away from My lifetime Stafford loan amount, or how does that work?

2. If the answer to the question above is, Yes, will her repayment of that amount release funds for me to utilize for my own education in the future? So if she pays back the full $54,000 plus interest, will that go back into the community chest for my future use and repayment?

3. Also, does anyone know if the total amount is frozen regardless of how much is repaid, or does the repayment amount provide for the possibility of borrowing in the future?

--That is, if I take out the full $138,500 but repay $20,000, could I take out that $20,000 again some time in the future and pay it back later? How does that work?

4. Once I have exhausted my lifetime Stafford loan allowance, what alternative resources will I have for financing my education--what are my chances of getting a good scholarship and for how much?

I hope this makes sense, everybody, and I appreciate any assistance you can provide. Thanks in advance.

Sallie Mae: Should I trust that wench?

Jess the Mess — Sat, 12 Apr 2008 14:17:08 -0800

Is it possible Sallie Mae is scamming me? Okay, so I just graduated this past December. In all honesty, I'm not the best with financial matters and student loans are rather perplexing to me. Complicating the situation is that it took me about ten years and three colleges (with several lengthy breaks in between) to graduate. I know I'm going to be owing soon so I'm just waiting for the bills to come around so I can pay up or make other arrangements.

The thing is, I recently received a letter from Sallie Mae saying I was delinquent on a loan. As far as I know, though, I don't have any loans with Sallie Mae. I had one from my first school with them but it was paid off years ago. And as far as I know I consolidated all my loans (except one small private loan with Chase) with Direct Loans last summer before the interest rate hike. I also have received absolutely no bills or notice that I owe anything to Sallie Mae until now.

I am aware that Sallie Mae has recently come under fire for shady practices. Obviously, I'm going to call them but are there certain questions I should ask that will help me determine the legitimacy of this debt? What proof can I ask for?

Also, if anyone has any links or recommendations for student loan organization/simplification tips for the financially illiterate, I'm all ears.

Should I go to grad school next year?

lxs — Fri, 11 Apr 2008 13:42:21 -0800

Please help me make the right decision about graduate school. I applied to seven grad schools this year and was rejected by all of them but one (the CUNY Graduate Center, FWIW). I was admitted with no funding my first year. Contrary to what this may imply, I really feel like I had a lot going for me on my application - I have five publications, have presented at four conferences, have a good job in my field (unfortunately one which is contracted and ending in July), language skills, a decent GRE score, and a MA (where I had a 4.0 GPA). I had multiple faculty members/advisers/professional contacts read all my essays/SOP/etc and everything sounded like it was good. I have spent several years preparing for grad school and I feel like I have a good variety of experiences/accomplishments on my cv so I'm not sure what I would add in a year's time that would make much of a difference if I applied again next year. It seems like the top programs in my field - ones that offer tuition plus a fat stipend - admit two or three people a year, whereas programs with less prestige don't necessarily fund all students. So, if I apply again next year, I could easily be in the same boat.

The school I did get accepted to has THE best potential adviser for me to work with. I work in an unpopular sub-field, and she is a real expert on it, so I would have the opportunity to take courses that are specifically on my interests. Also, this school is the only one I applied to which is willing to accept some of my MA credits. They have said (tentatively) that I would enter with about 21 of the 45 credits required to complete my course work. Because of this head start, I could conceivably take fewer classes during the first year I'm paying out of state tuition. Also, even though I did not receive a fellowship, my MA qualifies me to adjunct in the CUNY system so I would receive tuition remission if I were to do that.

The downside is that I (somewhat stupidly) paid for most of my MA. I now have about $45,000 in student loan debt. It is consolidated at what I think is a decent rate (4.5%). To start work toward my PhD next year, I would have to take out a loan my first semester of about $4000 to pay for my classes. I'm pretty sure that by my second semester I could handle an adjunct job, which would pay my tuition. I am also planning on getting a part-time job/doing freelance work, which I think I can handle since I will be a part-time student my first year. I worked almost full time while I was getting my MA and it didn't kill me.

My questions are this: can I make this work? Is this additional loan a big deal? This program is a great fit for my research interests and I want to go grad school NOW, while I'm enthusiastic and ready, but I don't want to do the "wrong thing." FWIW, I'm in the humanities (art history).

Should I take on significant debt in pursuit of a Classics PhD?

Anonymous — Tue, 08 Apr 2008 14:27:09 -0800

I've been accepted to a Classics PhD program, and I can't decide whether to go or not. It's a good second-tier program, and the research interests of a number of the faculty line up almost exactly with my own, something that was remarked upon a number of times when I spoke with them. When I got the letter of acceptance, I was thrilled.
Here, of course, is the catch: funding. I'm on the funding wait-list at the moment, and the deadline for my decision is April 15th. The possibility exists that I could end up with full funding at the last minute, but I'm operating under the assumption that I won't.
Now, since I already have an MA (in Classics and Comp Lit), I think I can shave a couple classes off the coursework, and I should be able to finish that within 2.5 years. Without any funding, however, this comes to roughly $90k for tuition alone.
I really want to do this. Really really really. I've been wanting to get a PhD in Classics since high school, as odd as that may sound. Yet my girlfriend, my parents and a number of my friends have warned me about getting into such debt. It is, I realize, a huge obligation. The chances of my making much money at all after graduation is essentially nil.
Yet I don't know what else I want to do with my life. I would be incredibly disappointed in myself if I simply walked away from this offer because I couldn't afford it. "Lots of people," I tell myself, "have taken on massive student debt and ended up more-or-less OK." Other people around me insist differently, especially with as non-lucrative a field as Classics.
I should add, I've been accepted at another school, but the offer is without funding at all, and the cost would be roughly the same.

So, I'm stymied. My personal inclination is to accept and take on the debt as best I can. The voice of reason, however, is telling me otherwise. Any ideas? Suggestions? Thoughts?