Ask MetaFilter questions tagged with loans and studentloans

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?

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.

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!

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?

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.

It's got an awesome appetite: Tyrannosaurus Debt

johnofjack — Thu, 28 Feb 2008 12:05:23 -0800

How do you figure out daily interest from an APR on student loans due monthly? I have about 100k USD in student loan debt, at a fixed APR of 5.75%. I wanted to work out what the monthly rate was, but my debt holder tells me that the interest is actually calculated daily, though the payments are due monthly. Then they sent me twenty pages of amortization tables, I suppose imagining that it would help me somehow. Aside from seeing that 75-80% of each month's payment goes to interest before any of it goes to principal, the tables don't help me.

I accrue and pay off a small amount of credit card debt each month, mostly in grocery bills. This is deliberate, since it's a monthly expense I'd have anyway, and paying by credit instead of debit is (I think) at least a slight help to my credit score.

I have no other debt.

I can see conceptually that paying as much extra as possible as soon as possible is best for reducing the total amount paid on this debt.

What I'd like is to work all of this out into a big spreadsheet so that I can see the actual final result of any extra payments made.

How do I do this? I feel like maybe I'm venturing into the realm of deep magic.

I've poked around in the archives here and not found another question asking this; if I've missed it, a pointer would be great.

What's the easiest way to repay US Stafford student loans having moved to Canada permanently?

Nelsormensch — Wed, 07 Nov 2007 09:19:10 -0800

I'm an American living in BC with about $20K in consolidated Stafford loans. I moved up here two years ago for graduate school at UBC. I've since graduated, secured gainful employment and have applied for permanent residency. My student loan repayment begins soon and I'm trying to figure out the easiest way to do the actual paying. I heard that the Dept of Ed will give you an interest rate reduction if you setup direct withdrawal from a bank account. Is this possible with a Canadian bank? If not, is there another way to setup automatic payments? Any other hidden gremlins of loan repayment from abroad, both physically and financially? My scenario is basically the mirror of this. The rising loonie is great for me, as my student loan debt keeps getting smaller and smaller. I'm looking to pay off my loans in about 24 months. I'm mainly just looking for information about the logistics of repayment, but if there are any subtle factors to student loan repayment that I haven't considered, feel free to mention them (and yes, I've also budgeted savings for emergencies, RRSP, etc.).

To consolidate, debate, or just negate? (Don't ya hate)

thetenthstory — Tue, 16 Oct 2007 12:25:25 -0800

Consolidate student loan or would that possibly be bad for my credit? I’ve read several of the older posts regarding this. I’ve decided that probably the Direct Loans from the Department of Education would be best if I do decide to consolidate.

I have one Stafford loan, one for about 21k that’s at a reasonable interest rate (lower than 5.5, it’s been consolidated), that I’m not really that concerned about, I’m just going to pay it as it goes.

But I have this one loan which is a Private Student Loan with a variable interest rate of 11.25% that I’ve had for about 4 years now. It’s at about 7k, which isn’t bad, but I know I can be doing better. If wasn’t so naïve about bad advice I probably never would have gone that rout. I know it’s my own responsibility, but I never really gave these things an honest look until the last month.

I’m making a decent living out of school and can afford to go right after the loans, but my way of life would change slightly by missing out on a few extra hundred bucks a month.

As for the tax standpoints of paying off the interest, I’ll probably be taken as a dependant (better him than me form a cash standpoint) this year and my interest should be phased out the following.

So should I start a quest to begin to look for better a better rate or just suck it up and stick with what I have? (I would assume to pay as much principle as I can) If I went looking and decided not to, would that mess up my credit score at all?

Thanks in advance.

Help me understand how to pay for my education.

Quidam — Sun, 12 Aug 2007 20:44:02 -0800

Please tell me, using layman's terms whenever possibly, everything you know about student loans. (backstory inside) Two years ago I graduated from high school, and proceeded to go to a college at a small, out-of-state school. My parents (at that point) were paying for my education. Earlier this summer, I decided to transfer to a bigger, in-state school. My parents are 100% not okay with this decision, and have effectively cut me off financially (or at least will stop paying tuition, housing, books, etc in the fall). I am more or less okay with this. I am willing to accept the financial responsibilities of this decision.

However, of course I still have to file as a dependent on the FAFSA, the problem being that my dad makes too much money for me to qualify for any kind of federal aid at all. Okay, actually, in the interest of full disclosure, I haven't filed a FAFSA (ever), because my dad has promised me all along that if I do I won't qualify for jack squat. Furthermore, because I applied so late, I'm too late to qualify for any kind of merit-based scholarships through the school (I do have a strong academic record).

So, if federal aid is out, and scholarships are out, it seems to me that my only option is to take out a private loan. The problem is, I don't know the first thing in the world about taking out a loan, because I've never had to until recently. I've looked here, here, and here in an attempt to do some research, but I'm totally lost and mildly overwhelmed as to how to proceed. How does one begin to compare banks and interest rates and know which one is the best option? How do I know how much money to take out? If I take out too little, can I take out more later? How long will the process take after I apply for a loan? What other factors should I be taking into account?

I'm just really pretty clueless about all this, and would love to not get myself in massive debt, if possible. Any and all advice would be greatly appreciated. Thanks in advance. :)

Which student loan is best?

kakes — Mon, 25 Jun 2007 12:22:08 -0800

I'll be borrowing $22,200 to pay for school. All other things being equal, which loan is best? All three options have a 10-year term. Loan #1: 5.55% fixed rate; 1% principal rebate after 12 months; a second 1% principal rebate after 24 months Loan #2: 5.55% fixed rate; zero payments for the last 6 months Loan #3: 6.55% fixed rate; a 3.3% principal rebate after 33 months I feel confident that I can make all payments on-time for the entire length of the loan.

Learning is EXPENSIVE!

CwgrlUp — Wed, 09 May 2007 18:32:34 -0800

StudentLoanHellFilter: No more sub or unsub fed loans. No help from FAFSA. Are we doomed to pay back student loans for the rest of our lives? My gf and I live together. She is still in college and has a couple years left. The financial office of the school has told her she is 'maxed out' on federal help (sub and unsub loans). Her parents make too much for her to get a Pell Grant. (and they are contributing nothing to us anyway)

For her to be able to declare herself independent for the FAFSA she has to be age 24 and up and/or married. (According to a FAFSA help desk person.) Well that's great and all but she's 22 and we're both female and our wonderful government doesn't allow us to marry.

SO: Question 1 - Any way around this FAFSA fine print so she doesn't have to show her parents income? Ideally I would like to 'claim' her because she goes to school and I work and frankly, I could use the help financially to help us fed and the lights on.

Question 2 - How in the hell does a single person make it through school without coming out a hundred grand in debt?!

TIA folks.

Cosigning for a student loan

charmston — Sat, 01 Jul 2006 19:40:42 -0800

CreditFilter: Does co-signing for my student loans affect my parents' credit? My parents are concerned that cosigning for my student loans (which, before I complete my undergraduate studies, will probably amount to approximately $50,000) will adversely affect their credit. If not their FICO credit score, at least show up as some sort of debt that they are responsible for that might hurt their chances at getting future loans.

Are there any credit or financial experts that might know the specifics regarding this? Many thanks!

Consolidate my student loans!

The Michael The — Fri, 01 Apr 2005 12:35:09 -0800

I have a sizable amount of Federal Perkins and Subsidized Stafford student loan debt, and I'm thinking of consolidating to take advantage of current interest rates. 1) Is this a good idea (why/why not?), 2) Through whom do I consolidate? I seem to get offers to do so every day from random companies. Is any one more reputable than any other? The only one of which I've heard is Sallie Mae. FYI, I'm currently in my 2nd year of a full-time Ph.D. program, so I'll be in deferment for a while.

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?