Ask MetaFilter questions tagged with loans and debt

Risk-aversion shows I'm qualified, right?

Anonymous — Mon, 13 Jul 2009 11:59:57 -0800

Should I take out a full load of student loans to attend a top-6 law school right now? I just got accepted off the waitlist at the last minute. This is not a "should I go to law school?" question; I'm already excited and fully committed.

The question, rather, is how much risk should I take financially in this economy? I was not offered a grant or scholarship (and might have a better chance at being considered for one next year if I apply very early - I put my applications in very near the deadline instead of in the fall). I currently have a job that pays well enough to put some savings away by next year, let's say at least enough to cover living expenses over all 3 years, and hope to come up with some opportunities to enhance my income given the extra time. I also have some personal projects I could finish up and be satisfied overall with spending another year this way before embarking on a long-term, non-interruptible career path like law. Until this waitlist acceptance, I was perfectly content with reapplying next year.

I am passionate about becoming a lawyer but terrified of becoming a debt slave. I can't seriously consider the possibility of committing to a loan payment plan that lasts longer than 5 years; right now, my 5-year payment plan would be $4,000 monthly starting 6 months after graduation.

On the other hand, schools like Columbia, NYU and Chicago are extremely competitive. As I was waitlisted at all 3 this year, I may not be able to count on getting in next year and they don't give deferrals to waitlisted admittees. After applying to other schools, I am certain that these are the only ones I would seriously consider attending, especially on student loans. I think I might be game for big law, but my freedom to choose is more valuable to me than anything, and I don't want to be stuck with it if I genuinely hate it.

Biglaw isn't even hiring right now, and I certainly don't want to place a $200k bet that they will be by 2012. My loans and interest rates are a certainty; the economy and the effects the recession will have on the legal industry and my ability to thrive or survive as a member of it in the near future are anything but certain. If it becomes clear over the next 12 months that student loans this large would be a death sentence for anyone, I could come up with a plan B and be glad to have escaped such a fate, even if being a lawyer remains my first career choice.

So I could be making the biggest financial mistake of my life (there are suddenly no guarantees of summer associateships and huge starting salaries for anyone at any law school?!) - or throwing away the biggest opportunity of my life (admissions are likely to get even more competitive next year, although I do have competitive numbers and would like to chalk up having been waitlisted to having applied quite late and scoring a 6-point increase on the February LSAT after applying with a lower score from December). If I pass up an opportunity to go to my dream school that might not materialize again next year, I'll always regret it; if I find that my life is essentially over after graduation due to crushing debt obligations, I will probably lose the will to go on after a couple years. Which way to go?

Can I make it as a lab tech?

pullayup — Thu, 19 Feb 2009 08:06:36 -0800

Is it realistic for me to expect that I can pay off my student loans with a lab tech job? I'll have my BS in biology soon, and I'm looking at lab tech jobs. These seem like they're just about the only thing I'll be specifically qualified for other than being a product rep, which is undesirable for other regions (e.g. 50% overnight travel).

Most of the jobs I've applied for pay new hires around $10-13/hour. My student loan payments will be $530/month; tight, but doable, though probably not enough to save very much. If I switch to a graduated repayment schedule, my initial payments will be closer to $350/month, but would go up to--well, I'm not sure, but no more than 3X the initial payment--$700-800/month, let's say.

So, the question: will my income after working as a lab tech for six to eight years be high enough to make those payments? Is there a career there, or are these jobs more of a layover for people planning to move on to graduate or medical school (which I am not going to do)?

Things to consider: I'm not considering the income-contingent plans, because the idea of paying $100,000 to discharge a $40,000 debt offends me, and I'm not wild about planning to make payments for basically my entire working life (I'm over thirty). I would probably be a lousy teacher.

Drowning in debt

Anonymous — Wed, 11 Feb 2009 21:02:46 -0800

How do I know if I should be considering bankruptcy? My spouse and I have somewhere around $15,000 in credit card debt, and we each have student loans. Between rent, bills (utilities and such), card payments, student loans, gas, groceries, etc. we are getting by paycheck to paycheck. Most bills are paid somewhat late, depending on when paydays fall, which means we end up with late fees, making it even harder to pay, and it's an endless cycle.

I don't want to sound like I just racked up a bunch of debt and want out of it (which isn't the case - due to being laid off, I lived off my cards for awhile, and we moved to a different state for economic/job reasons, using the cards again).

How do I know when to begin contemplating bankruptcy? I don't want to think about having shit credit for years to come if we do this, but on the other hand I'm sure we already have shit credit from all the debt and late payments.

I live in North Carolina if it's relevant. Throw away email drowningindebtnc@gmail.com

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!

Is it time for a credit card?

fogster — Fri, 14 Mar 2008 21:31:50 -0800

Should I sign up for a credit card right now? If so, from where? I'm an unemployed college student. I'm due to graduate in May, and currently have no job since I'm a full-time student. (I'm looking for "real" jobs for when I graduate.) I'll delve into (much) more detail in a minute, but the basic gist is that people keep telling me I need to get a "real" credit card to build history, but I think now may be a bad time.

I should also disclaim that I'm extremely contemptuous and distrusting of the credit industry. I believe that they, as an industry, have gone out of their way to exploit people with financial problems; I find it repulsive that they're exempt from usury laws; I'm yet to find a credit card company that doesn't engage in one sleazy practice or another. More than anything, though, I have major issues with credit reporting: I never asked to be put in a database with some random third-party group, and I think my financial data is the last thing in the world they have a right to know anything about. I realize that it's very helpful to banks, but that doesn't appease me. Not only is it a (creepy) invasion of my privacy, but I have major issues with them being the definitive word on whether I'm creditworthy or not. (It'd be like if I spontaneously declared that I was the "Job Rating Bureau" and kept files on every person in America, every time they've been disciplined at work, every place they ever worked, for how long, and also reported when people applied for jobs. And then, when someone went to apply for a job, the company would contact me to ask what I thought of them. Oh, and employees could only see my ranking of them once a year. And that's only because Congress forced my hand.)</rant>

So I acknowledge that some of my reluctance is that opening a credit card is "giving in" and playing by their rules. But I also think it just doesn't make sense at this point in my life:

- I have no job. I last had a job this past summer.

- I have about $2,000 to my name. It's in a local credit union, which has also issued me a (Visa-branded) "check card," which works as both a debit card and an ATM. The money just comes out of my checking account. This works very well for me.

- I have around $10,000 in student loans. I consider myself pretty prudent in this regard: they don't officially become payable until I graduate (and then I have the ridiculously long time they allow), but back when I did have a job, I worked on paying down monthly accrued interest and a small amount of principal.

- My 2007 tax return was for about $7,000 in income. (I consider this quite good for a no-skill summer job, but the point is that current debt, technically, outweighs my annual income. Further, I don't even have the job anymore.)

Also, I was turned down for an auto loan a couple years ago. (I had about $13,000 in the bank, and was seeking to buy a car for about that amount, but my mom convinced me I should try for a loan to build credit rating. So I applied for a $4,000 loan and was turned down.)

As I understand it, applying for a credit card and getting turned down would hurt my credit further. I almost signed up for the Costco AmEx card, but this thread got me worried about AmEx's apparent obsession with putting accounts under "financial review" at inopportune times and demanding years of financial data. If your answer is that I should apply for a card now, I'm also soliciting recommendations for a company that doesn't seek to cheat me too badly. I should note that, because I hate spending money I don't have, I expect to pay cards off in full, so I'm actually not too sensitive to interest rates.

I have no military links, so USAA is out. And thanks for reading this far; this came out to be a long one!

Starving Artist seeks funding

whimsicalnymph — Thu, 13 Mar 2008 13:40:06 -0800

How do I pay for grad school? So, I just got accepted to Columbia University for an MFA in fiction. Which is awesome. But I don't have a lot of money. Which is, well, just the way it is.

Do you know any resources for outside fellowships/scholarships that I could apply for?

Ways to get private and government loans?

I already filled out my Fafsa. That is the first step, correct? What next?

Low cost/no cost financial planning for students?

iamisaid — Mon, 26 Nov 2007 12:38:08 -0800

Where would I go to get free or low-cost and unbiased financial advice in regards to student loan debt and big-picture student financial planning? I'm a third-year college student with a fairly considerable amount of debt in the form of student loans and credit cards. Aside from the financial aid office at my university (which has been of little help thus far), where can I go to get unbiased advice and big-picture planning regarding my debt situation, the best methods of debt consolidation and payment distribution while in school and thereafter, and careful consideration of options for funding my remaining two years of college? Are there any financial planners who specialize in this field who wouldn't charge me an arm and a leg?

Furthermore, I'm at the point where I could still change my university major without much loss of hours. It would be great if said person could assist me in taking a careful look at career planning while taking my financial problems into account.

Payoff CC with student loans? Then invest or pay off loans?

Anonymous — Wed, 12 Sep 2007 12:58:17 -0800

I am using extra student loan money at 6.8% (mostly unsubsidized) interest rate to pay off my credit cards (about 25K) worth. What should I do when I get a bunch of other cash? Pay off loans or invest? I will soon be getting $5K cash and will probably get some additional money for freelance jobs, while I am in grad school (MBA). My wife and I would like to buy a house at some point in the next few years.

So what do I do with the cash? Invest it (I typically return about 20% yearly on individual stocks...obviously riskier so maybe index fund?) Put it in a high yield savings account? Other thoughts?

Some have said I should immediately make payments on my student loan...seems to me if I can beat the 6.8% on the student loan I should save the money for the house.

(p.s. lest you think I am irresponsible with the 25K in debt their are valid reasons I won't go into..I am annoyed by it but it was mostly unavoidable)

Credit card debt vs. car loan debt

tristeza — Tue, 27 Jun 2006 16:18:13 -0800

Which is a "worse" type of debt - credit card debt or car loan? I have a goodly sum left to pay on my car (around $6k). The interest rate is 5.5%.

I have the opportunity to put up to 19K on a particular credit card which they say has a 4.9% APR until the balance is paid in full.

Obviously, one rate's better than the other which is why I'm tempted to pay off the car with the card, but....is credit debt somehow "worse" or more insecure than car financing? Are there pitfalls to the credit card deal I'm unaware of (I had them confirm over the phone the rate for LIFE).

Please assume that a) I will never charge anything else to this card, b) I will pay more than the minimum, on time, every month, til death do us part amen.

repairing a credit report

Anonymous — Sat, 08 Jan 2005 01:18:06 -0800

I'm in college in the U.S., and have a few state student loans. They were under a forebearance that I once requested, which ended four months ago. I didn't realize this, and ignored the mail that was sent about it because I thought it was the usual mail they send me about how I have a loan and ads for consolidation. I just recently got this fixed and the forebearance backdated so it will have another year from when it ended. But I now have two 60-day late marks on my otherwise good credit report. Anything I can do to get rid of them?

Repairing Credit

Anonymous — Wed, 10 Nov 2004 19:45:33 -0800

How should I repair my bad credit? I'm 26, my income ($53k) exceeds my expenses and I have only $1.5k debt, but I was awful about paying bills on time until the last year or so. Now I'm finding it difficult to secure a car loan. I haven't even gotten a credit report because I'm afraid to look at it. I will probably end up talking to a credit counselor, but I thought I'd ask for advice before I do. College kids, don't wait until the utility bill is yellow to pay it. Trust me.

Cash Advances

BrodieShadeTree — Wed, 01 Sep 2004 15:04:59 -0800

Wow. All of the sudden my small town has been innundated with "cash advance","check into cash" type businesses. There are, at last count 9 new openings here. What is this all about? What are the terms of these places for borrowing money? Any other towns seeing such a boom?

ReFi Student Loans?

Tin Man — Wed, 16 Jun 2004 06:53:12 -0800

Is it possible to get a lower interest rate on my student loans? I began paying off my loans in 1999. In mid-2001, I refinanced them through the government and got a slightly lower interest rate (5.7%). Since then, of course, interest rates have gone way down, but the government won't let me refinance more than once. Occasionally I get offers in the mail from companies offering student loan refinancing, but my instinct is not to trust them. Are there any advantages/disadvantages of refinancing through a private bank? Any other ideas?