Ask MetaFilter posts tagged with studentloan

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?)

How to go about paying for a college education?

shangomoons — Thu, 05 Jun 2008 21:38:21 -0800

How to go about paying for a college education? Here's the situation. I went to college right out of high school and pursued a degree only to find out a year away from getting that degree that it's not really what I wanted to do.

The problem is that my credit is just about maxed out after taking on a pretty substantial student loan in order to pay for the unfinished degree. I'm ready to go back to school now, but am having difficulty trying to finance it. My mom's credit isn't great after enduring some pretty hefty medical bills, and I'm not entirely sure that federal money will get me by while making payments on the earlier student loan. Between my rent and my student loan payments, I'm at about $1000 per month in bills (plus internet, phone, etc.). If I go back to school my income is likely to drop so that I'll not be making enough to cover those bills. I could defer the previous student loan, but I'd rather not if possible, to keep knocking down my debt.

I've looked at some sites like Fynanz and GreenNote. Anyone have experience with these? I hate asking family and friends for money honestly, but am more afraid that if something were to happen to me they'd be out the money.

In talking with some friends, apparently some companies have programs to help you pay for school where you work for them at a reduced salary while going to school and they help pay for it, and in return you agree to continue working for them for X years after you graduate in order to "pay them back." Haven't had much luck in that department with the companies that I've expressed an interest in.

Any other creative ideas for paying for a college education?

Loans with Borders?

mireille — Tue, 20 May 2008 22:36:23 -0800

If someone moved out of the US and defaulted on a federal student loan, and never returned to the US as a resident, what would be the implications/ramifications? --i.e., on future visits, cross-border financial matters, family still residing in the US (if any), and other potential fallout.

Student loan consolidation scam avoidance

jennyjenny — Sat, 01 Mar 2008 07:39:33 -0800

Student loan consolidation and the current economy: Should I consolidate now, or wait a few months? Are interest rates as they apply to student loan consolidation likely to drop? Bonus question: are you happy/unhappy with the company you consolidated with? I have (lots of) student loans to consolidate, and I have until June before many of them come out of post-school deferment. Should I do it now, or later, or at all, and with whom? I know that there are certain loans I should not consolidate, as I am in a health profession and might potentially get some of them forgiven -- these are perkins loans, correct?

Also, can anyone point me to a reputable resource where I can read a lot about this? there seems to be an awful lot of hard-sell scammy stuff out there, and I can only do this once.

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.

Student Loans and FHA Debt to Income Ratio

Dr. Zira — Wed, 27 Feb 2008 11:35:13 -0800

Does a student loan in deferment count as debt for the purposes of figuring debt to income ratios in an FHA loan? We're looking at applying for an FHA home loan. I had a lender tell me that my student loans, currently in deferment until graduation in May, then in grace period for six months after that, would be counted against my debt to income ratio now.
The lender says that in order to not have them counted against my debt to income ratio right now, I would have to provide documentation from the student loan lender that they would be deferred from one year of closing date of the mortgage. At best, I think I could only document the current deferment and subsequent grace period (six months after I graduate). As to applying for a forbearance, I don't think I can apply for that until I'm actually in repayment and even at that most lenders, apparently, only grant forbearances for 6 months at a time. It seems weird to count this as debt now, especially since my future income from my full time job which will kick in the future won't be counted.

Is this one-year deferment doc requirement a lender-specific thing or a HUD thing?
Anybody have experience doing this?

What happens when you don't pay your student loans

PercussivePaul — Sun, 04 Nov 2007 14:56:41 -0800

Someone I know has decided that she is simply not going to pay off her student loans. What's going to happen to her? She is from BC, Canada and owes something like 50K. She moved to Europe earlier this year to be with a guy, doesn't speak the language there and is unemployed with no prospects for employment. While she has talked about getting married, I have reasonable cause to believe that the relationship will not last.

It is not up to me to change her mind, but she is a very close friend of my girlfriend's and we are both wondering if there is anything we can say to talk some sense into her, bearing in mind that she is not really listening to reason right now. (She got angry at my girlfriend when my girlfriend refused to support her decision.)

Can she expect to be hunted down by debt collectors in Europe? If she ever returns to Canada will they grab her at the airport? What are the consequences of her decision? Or perhaps it really is possible to escape from the consequences by staying out of the country, in which case we should be supportive? (I really have trouble believing that last one but I will try to keep an open mind.)

What to do about student loan payments misdirected during Chapter 13 bankruptcy?

shannymara — Mon, 10 Sep 2007 16:07:41 -0800

I made $3,000 in payments on my student loan during my Chapter 13 bankruptcy, but they were not applied to my loan balance. What should I do? I just had a chapter 13 bankruptcy discharged successfully after 3 years. When I filed chapter 13, the trustee told me to continue making payments on my student loan. I had been paying about $100/month to Sallie Mae. On finding I could no longer access my Sallie Mae account online, I called them to find out what they wanted me to do. The representative told me they couldn't bill me since I was in bankruptcy, but gave me the address where I could send my payments, and told me to write my SS# on the checks so they'd know where to apply the payments. I made the payments every month by check, and they cashed them.

Last February I checked my credit reports and found they showed the loans had zero balance, with a claim filed with the government. I called Sallie Mae again to find out what my balance was. I spoke to a rep in India, and he told me it was paid in full. I sent a letter to Sallie Mae requesting an accounting of the activity on my account since the bankruptcy was filed, and stated that per their rep saying the loan was paid in full I would send no more payments until I received such documentation. I never received anything in return.

Last week I got a letter from Sallie Mae stating my payments were to resume now that the bankruptcy was over, as of October 5th. The total balance on the loan did not reflect any of the approximately $3,000 I had sent them during the bankruptcy! I called them, and after going through a guy in India, a rep in the US, and her supervisor, I was told they sold the loan to the guarantor (Connecticut Student Loan Foundation) as soon as the Ch. 13 was filed, and that I had been supposed to pay CSLF the whole time. She said they'd been forwarding the money on to CSLF. Now that the bankruptcy was over, CSLF had sold the loan back to Sallie Mae, but without reflecting any of the $3,000+ in payments I'd made. She said if I wanted to dispute the loan amount I would have to document the bankruptcy, all my payments, etc, and that if I didn't make payment by Oct. 5 the payment would be reported to the CRAs as late.

I tried in good faith to make the payments I owed, I contacted Sallie Mae twice via phone and once via letter and they never mentioned that I shouldn't be paying them, and I never received any communication from CSLF the whole time. She is supposed to mail me a summary of all the payments they received during the bankruptcy.

I don't want to end up being charged interest on the amounts I already paid. I can't afford an attorney. Was it legal for Sallie Mae to cash my checks during that time? Should I call or write CSLF? What should I do?

UK pre-1998 student loans and tax

altolinguistic — Tue, 04 Sep 2007 03:13:43 -0800

Are student loan repayments tax deductible in the UK? I've asked various people (including HMRC - I think I caught them on a bad day, they were not helpful) and haven't managed to find an answer to this - is there tax payable on the £134 per month that I pay to the Student Loans Company in repayment of my student loans?

More details - I'm self-employed and do my own tax return each year (I don't have an accountant; perhaps it is time to get one). I took out student loans for a course that started in 1996, so I am not part of the new scheme whereby repayments are done as part of payroll (if employed) or are calculated by HMRC from the tax return (if self-employed). As I understand it, borrowers who started courses from 1998 onwards do not pay tax on their loan repayments - do I have to? At a stretch the student loan money could be considered a business expense, as my degree is directly relevant to the self-employed work I now do.

I do intend to phone HMRC again and check this, but thought I'd appeal to the collective wisdom here as well.

Should we save for down payment or pay off our student loans?

esolo — Mon, 11 Jun 2007 12:20:28 -0800

Should we save for down payment or pay off our student loans? and what about retirement? My partner and I want to buy a house soon. He is a young professional and I am a grad student. We are both recent university grads and are working towards paying off our school loans. The interest rate on these is about 8% (it’s a private bank loan). I am confused as to how to divide up the little money we have between paying off the education loans, saving for retirement and saving for the downpayment. What is most logical money-wise? Not to save for either retirement or downpayment until we pay off the loans in full, because we are not likely to make more than 8% in anything else? But then it may take a while to pay them off (approx. $25,000 to go).

I heard that many people save for downpayment in ING savings account (if the purchase is less than 5 years away). ING savings account pays 3.5-4% in Canada, so it doesn’t seem to make much sense to do that, when we are paying 8% on our education loans. Is the better approach just keep paying off as much of education loans as possible, and then just take out the mortgage with zero downpayment? (The rates on the mortgage are low now, so we could get 5.5% rate right now).

One option would be to keep paying off the education loans, until we find the house we like, and then just take out a large mortgage and cover the education loans in one shot. This way, we will only have one large relatively low-interest debt. Has anyone done this? Any advice and suggestions would be appreciated.

My tax returns are being sucked up by unpaid Stafford Loans that have long disappeared from my credit report. If I offer to pay the whole thing off, what can I expect?

ValveAnnex — Thu, 17 May 2007 18:24:26 -0800

Repaying Stafford college loans that disappeared from my credit report (due to age), but still collect all tax refunds - what kind of hit might I expect on my credit, reactivating the account by a full-payoff? More importantly, what kind of deal can I propose to avoid all the interest? Anyone have experience with this? I've completely blown these people off, so I'd be popping up, after over ten years, offering to close the account. I received an offer about two years ago to repay half of the entire debt to completely close it out. Considering the amount of interest over the years (over 15 years of interest has accrued), I'm afraid if I offer to pay it off, they'll want WAY more cash than I can pay.

My goal is to get debt out of my life, even debt that has disappeared from my credit report. But I don't want to go through more and more years of bad credit due to reactivating this account with activity.

I don't want to continue to lose my tax refunds to this account, which can sometimes be over $5,000/yr. What should I do?

Is income used to pay back student loans taxable in Canada?

sindark — Sun, 15 Apr 2007 06:53:20 -0800

Canadian tax question: After six years of university (undergrad and an M.Phil), I am about to start working. Will I need to pay taxes on income that I use immediately to pay off student loans? Leaving the hallowed halls of academia, I have some tax questions. My studies in the last few years have been partly funded by student loans from the federal government and province of British Columbia. As soon as I am no longer a full-time student, they begin accruing interest. I want to pay them off as quickly as possible.

The first question, then, is about income tax. If I am shipping money straight from my paycheque into the coffers of the federal and provincial student loan bodies, does it count as taxable income? If not, I would probably be able to push myself into a rather low tax bracket by spending as much income as possible on paying down my debt burden.

Secondly, I have been spending a lot on tuition in the past few years. Can I use that as a deduction against future taxes. If so, how would I go about doing it?

In case it matters, I will probably be working for the federal government in Ottawa, Ontario. Many thanks for your suggestions.

How do I pay a large amount of money on my student loans?

Anonymous — Fri, 01 Sep 2006 07:16:23 -0800

I have a surprise chance to pay off my student loans (!), so how do I go about doing this in the way that's best for me? My "more inside" has a few details about possibilities / ideas. I got money from a relative's will that is to be used only to pay off my student loans. I'm intensely grateful for this chance, and now I'm just figuring out how to handle it in the most practical way.

So what is the best material way to pay my two loan holders (Sallie Mae and the US Dept. of Education) in the way that's most beneficial to me -- such as via a card that gives a small amount of cash back, because any cash would be really helpful to me.

I have my paypal debit card that I use for all my everyday stuff because it gives me 1.5% cash back. (1.5% cash back would be over $700, given this amount I'm paying to the loans.) But my cash limit on that card is only $400 a day, and at that rate I would be paying them every day for 3.5 months (over which time my loans would increase in interest enough that it might not even be worth it?).

I have poor enough credit that I can't get another credit card with a higher daily limit right now.

Is there something I'm not thinking of (I know very little about money) that is a way to get 44K total to my two loan holders and get some kind of cash back? Should I see if my mom (who has good credit) can get some cash-back credit card, so she can do the payments? If so, what card should she get??

I am not at all used to dealing with money correctly, so any help would be hugely appreciated. If it matters, the money was not officially willed to me but to my mom (nothing was willed to me), and the agreement is that from that I get the amount of money that will directly pay off my student loans. Also, student loans are the only debt I have, if that matters.

How bad is student loan debt?

jennyjenny — Sat, 29 Apr 2006 20:08:59 -0800

Should I drop out of school? I am 31 years old. I began my undergraduate degree at 28, got straight As all the way through (except physics) and am now just completing the first year of a 2.5 year physical therapy program.

I have 45 thousand dollars in student loan debt right now, and at this rate will have another 45 thousand when I graduate with a Master's in December 2007. I have no other debt.

In the last six months a lot has changed in my life. One of those things has been my enthusiasm for my chosen profession. All I have to do is look around me at my life as it is now, and it's pretty clear that my schooling is the one thing that doesn't fit. I am interested in a lot of things, have always been involved in the arts and working for nonprofit organizations, and now I am saddling myself with enormous debt for something that I am not entirely certain that I want to do. I fear that my debt when I leave school will require that I work as a PT in order to pay off, and I will never be able to pursue my real, lower-paycheck dreams.

But I have so much invested in this! I don't even have a BS yet (I will in December). But the debt will be very serious.

Has anyone run into a situation like this? How did you handle it? How do you wish you handled it?

can I make money off my low-interest loan?

masymas — Thu, 17 Nov 2005 19:33:05 -0800

FinanceFilter: can I make money off my low-interest loan? So I borrowed a bunch of money to pay for college, and at the time, interest rates here in the US were historically very low. If US interest rates continue to increase, is there any way for the lender to make money in this scenario?

For instance, I know that banks sell/buy loans to/from each other. It seems that banks would pay a premium on a low-interest loan with a variable interest rate (under the assumption they would have a higher ROI resulting from increasing interest rates).

Beyond that, it gets confusing to me. Is there a good site explaining the market of purchasing/selling both variabel and fixed rate loans? Is the loan market exclusive to banks, or can lenders get in on it as well? Many thanks.

How do I pay off my student loan?

Katemonkey — Wed, 30 Mar 2005 12:26:57 -0800

I owe around $18,000 to Sallie Mae in student loans. I live in the UK. And, now, Sallie Mae has decided to not accept credit cards... Because, you see, for the past five years, what I've been able to do is call up Sallie Mae each month and pay the monthly bill by credit card. It was a pain, but it worked. I didn't have to have a US bank account, I didn't have to worry about money orders being mailed overseas, I certainly didn't have to worry about the surcharges that came with transferring money, and with the exchange rate as it is, it wasn't half bad.

Except that, now, they don't accept credit cards. Which means that my entire system has gone down the toilet. They say it costs too much for them to accept credit cards, but I'm not quite certain how that works out — since they've just made it near-impossible for people who live overseas to pay their loans off. Thanks, guys.

We think what we're going to do is take out a loan over here, pop it into our bank account, and then pay off Sallie Mae all at once with an electronic transfer. It sucks, and it's definitely not what I would want to do, but the exchange rate is still pretty good.

But does anyone else have any other ideas? Or suggestions for loan companies in the UK that aren't going to break our legs with interest rates and/or hired goons?

What are my options for private student loans?

socialdrinker — Mon, 28 Mar 2005 12:36:15 -0800

What are my options for private student loans? (I have checked the archives, and while there was some helpful info in there, I decided to post this anyway. Sorry in advance for the supa-long question, just wanted to fill in as many details as I can!)

I'm a 26-year old full-time student. I'm finishing up my 2nd year at a 4-year art school in New York City. I commute there from southern CT, and the commute and the fact that I'm so far away is killing me. I work full-ish time near home right now (I say full-ish because it's technically not full-time hours right now, but they let me keep my salary and I work enough hours in the summer to more than make up for it - think 90+ hours/week). I'm not happy at my job (I've been there too long and I'm too attached to it to keep going without it affecting other areas of my life), and I really want to leave, but financially, I don't know how to swing it.

The commuting/working at home arrangement worked for all of last year and the first half of this year, but this semester, I want to die. Next year is going to be just THAT much more intense - I've spoken with juniors and instructors from my school, and I've realized that I can't work this much and devote enough time to school that it needs. I really feel like I'm missing out on a lot (culturally and socially) by not living closer to school. I feel like I should make the next two years "worth it," and if I stay here, I don't feel I can.

Right now, my parents are helping me with tuition (I plan on paying them back later since I took time off from college only to return long after they thought I ever would), but I pay for books, supplies ($$$ - I'm a photo major), commuting, and any other costs that arise. Basically, I feel like the physical distance from school/New York is putting a damper on my education, and for the money I'm (right now, my parents, but in the long run, I'm) paying and the sacrifices I've made to go there, I should be getting everything I possibly can out of this opportunity.

I tried looking up information on private student loans to see if I could move closer to school (there's no way my parents can help me with rent & related expenses), but the truth is, all of the information that's out there is confusing and overwhelming and I don't know where to begin even THINKING about this, let alone applying for loans.

I have a small amount of money (around $3K, I know not much) saved, and the only other consistent expense that I have is my cell phone. I do own a car (finished paying for it last summer), and if I have to, I can sell it (I can probably get around $6K for it). I have good credit, and my parents have stellar credit and would most likely be willing to cosign a loan if I needed needed them to.

Have any of you had any similar expierences? What did you do? What should I absolutely NOT do? FWIW, I'm not afraid or put off by hard work, and if I do go through with this, I do plan on getting some kind of job - ideally it would be in the photo/art field, but I have expierence in other areas (accounting, retail), so I feel like it won't be too hard for me to find a part time position, but I know that this will no where NEAR cover the expenses of living in NYC. I know that it may be a fairytale wish, but I'd like to have a job that I don't have to care about that much, so I can put my full attention where it needs to be - on school and photography.

Question number 7992

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?