How can I deal with my Private Student Loans?
September 4, 2010 2:04 AM   Subscribe

A lot of debt, almost not funds to pay it. And bad, bad things happen when you don't pay private student loans. Besides "Get a better job" (which I'm certainly trying to do), what advice can you offer?

Hey Metafilter,

I've been rolling this one around for a while, researching, alternating between terror and denial (so I can function on a daily basis). I'm 24, about to graduate college. Like a lot of my classmates, I'm pretty heavily in debt: a little under $30,000. In the many similar threads I've read someone invariably says "X? X is nothing. I've got Y amount." Please don't go there. It all depends on the person, and for me, 30,000 is an incredible, insurmountable sum.

I'm scared for two reasons. One, because it's simply a lot of money. I'd never, in my wildest dreams consider taking out a loan that large for anything other than education, and even then I only took it on because the school I was working with assured me it was a reasonable strategy. Also invariably in these threads, someone gets to this part and comments "You took on THAT much debt? For THAT degree? What a moron." Again...well, you know. Hindsight is 20-20: It's obvious now they were lying to me, and that I wasn't a good fit for the school, and that the school did a pretty poor job teaching in
general. But you don't know these things when you walk in the door.

So first, it's a lot of money. Second, it's with Sallie Mae, which is basically the mafia of Student loans. If everything goes ordinary, it will take me a little over a half-decade to pay the money back, but I have every reason to suspect it won't. The web is full of horror stories of SM pulling one trick after another to make the process as miserable and costly as possible, and some of them look pretty credible.

Federal law, as you may know, has also screwed me over. Student loans can't be discharged via bankruptcy, and generally can't be escaped at all except through some very extreme circumstances. So the forgiveness that's there for other loans, the ability to take a credit-score beating but escape with your life isn't there for me. The only options seem to be pay up or get the money bled out, one drop at a time.

What's worse: My mother is a co-signer on the loan. I know, I know. So even extreme options like fleeing the country (not that I'd have the balls anyway) are off the table: If I disappear, they'll screw her. More realistically, if I fail to pay, eventually they could start making her life miserable. Nice, huh?

So what do I want? Either to get out from under the loan entirely, or to shift it to another lender (ideally the government) with a less sinister reputation. And yes, I did just refer to the government as "less sinister" then Sallie Mae.

I make peanuts right now, and I though I'm doing all I can, I don't see that going up any time soon. I just don't have the cash to pay, and I don't know when I will.

A lot of people seem to think these posts have an air of entitlement. "Ha, you knew what you were getting into when you signed, now pay up you bum!" Well no, I didn't know. Not really. If I had I would have run out of the room and burned the pen. I made a bad choice: partially because I was lied to, and partially because I wasn't paying attention enough to realize I was being lied to. Now I just want my life back. I'd be deeply thankful for any help to that end.
posted by wanderingchord to Work & Money (38 answers total) 12 users marked this as a favorite
College is no longer an entitlement. Since the Higher Education Act - heck, since the GI Bill - it's been a requirement for a great number of opportunities. I am sorry there are people out there who still think college is not a necessity, although I personally think we need to widen the option pool. But, that is a different thread.

$30,000 is not a huge amount of debt. You are still in college. I am guessing you are a senior. Probably several months from graduation? Correct me if I'm wrong. My suggestion in the first place is that you don't let this number hang over your head like a yoke. Instead, examine your degree and what comparable skill you could learn in the next several months in college that could most help you keep your trajectory closest to what would be meaningful for you to be doing after graduation.

Of course, what's right and what's fair are rarely in line with each other. Debt is a difficult thing. At least you can't go to jail for it - I hope you're not in Minnesota. You have to live with this debt and urge yourself not to default. There is no law route out of college debt yet. Remember this: Debt does not equal poverty. It means learning to live in a paradigm - a series of related ideas put to the test - that mark the path to joy. That means bar tending on the weekends or doing weddings or demanding a raise.

Don't make your debt a limb that doesn't work.
posted by parmanparman at 2:18 AM on September 4, 2010 [1 favorite]

Talk to your college's financial aid department. They can help you formulate a plan.

And you may not want to hear it, but $30k ain't much, and certainly isn't an insurmountable amount of money to repay.
posted by herrtodd at 2:27 AM on September 4, 2010

I've never had to deal with a student loan personally so I don't know all that much, but my husband is still paying his off. He was able to put his into forbearance for a few years after college, and he still has several more years of it available if he ever needed to use it. One option may be to put it into forbearance until you do have a steady job.
posted by Sufi at 2:53 AM on September 4, 2010

Honestly? I apologise about how condescending this is going to sound, but from the tone of your question, it sounds like you are stressing about this WAY too much. It also sounds like it's not just the loans, but a lot of things about life are bothering you. By all means talk to the financial aid office, and find out the rules about deferment, but I hope that you will consider going to the counselling centre and talk to them abut life more generally.

Look, $30k is a lot of money, but how much money do you expect to earn in your lifetime? Much more than $30k. And this is an absolutely horrible time to look for jobs, but do you real think that a COLLEGE DEGREE isn't eventually going to help you find a higher paying job? You just can't extrapolate from your current position to your future one.

I could be way off base here, and I apologise if I am. But I think you should forget about the debt until you graduate, and try to enjoy the last few months of college. Please take care of yourself.
posted by sesquipedalian at 3:02 AM on September 4, 2010 [1 favorite]

Try not to freak out, because it certainly sounds as if you are freaking out. You do still have options, and while $30k is a lot of money, it's not insurmountable. I'm not sure what your line of work is, but some jobs or volunteering activities will actually allow you to have your loans forgiven.

You can also defer loans if you can demonstrate a financial hardship. Talk to your financial aid office, but here is the Sallie Mae page to give you a head start.

Your last year of college is really strange in a lot of different ways, and part of that will be the holy-shit-now-what aspect. Student loans makes that a lot scarier, but please don't give over to anxiety. A positive, optimistic attitude will help you tremendously as you take your next steps, and there's no reason why you shouldn't have one. You have a lot of debt, but it could be worse, and you will find a way to deal with it. I agree with the above advice that you might want to drop in to your school's counselling center as well - i found it very useful during my last few months of college.
posted by ukdanae at 3:30 AM on September 4, 2010 [1 favorite]

This is not an 'insurmountable' sum. If it were, there would be no point in asking how to deal with it, would there?

The last thing you should be doing is obsessing over horror stories (complete with eeeeviilllll bad guys) you've read on the internet. You're letting imaginary problems distract you from the actual tasks at hand.
posted by jon1270 at 4:04 AM on September 4, 2010 [1 favorite]

Are you graduating any time soon (like, in the 3-4 month range, not the 9-12 month range)? Do you have any job prospects lined up? If the answer to these is no, stop stressing out so badly. You are whipping yourself up into a frenzy of fear and it's snowballing.

If you are graduating soon and do not have a job lined up, have your loans deferred. If you have a job lined up, but it's likely to pay you so little that repaying loans would mean you can't pay rent or something, have repayment adjusted based on income.

You say that if everything goes well, you can pay that amount back in half a decade. This is not meant to be condescending at all: that's 5 years. Some people spend 20+ paying back their loans. You're not drowning.
posted by asciident at 5:03 AM on September 4, 2010

Why are you on a 5-year plan? (You reference paying it back in a half decade). My loans are on a 30-year plan.

And seriously: $30K is not a lot of money to be in debt for your education. I know someone who is $200K in debt for school. I know you say it feels insurmountable to you, but it's a part of life, and you've got it better than some. No snark here: you might want to consider therapy to help talk yourself down from this freakout. It's really not so bad, and you shouldn't torture yourself over it.
posted by Admiral Haddock at 5:03 AM on September 4, 2010

The 5-year thing is standard Sallie Mae for private loans. That means the OP has to pay back 30k in 5 years. That clock may have started ticking the second they disbursed the money.

OP, I don't know what to do besides say that I'm sorry, but that you generally do have to pay. If you don't have the money to pay, don't, but of course there will be consequences.

The best people to talk to about transferring it to the federal government would be your school's financial aid office, but if you didn't qualify for federal aid in the first place, I doubt you will be able to get federal aid now.

There is also the option of changing some of the debt for less onerous debt, if your end goal really is to never, ever pay it--meaning put as much debt as possible on credit cards, if that seems better to you (although the interest rates will not be great). You can pay Sallie Mae loans via credit card, I think, so that's one way to make the payments. Then you can just never pay those credit cards off. 30k is a lot of credit, though.

As far as your mom being the co-signer, you can get her removed from the loan after (I think) a year of paying on time, if Sallie Mae approves it. You obviously should try to get your credit score in order so that they will be more likely to remove her as a co-signer. That might be a good goal for you. Then at least the debt will be solely your own.

Speaking of your mother, what does she think of all this?
posted by the young rope-rider at 5:21 AM on September 4, 2010

So, OP, tell me if I'm wrong, but your payments will be around $500 a month, correct? If you've been on a pay-little-or-nothing plan until now, they would be more than that. If so, that might give the other commenters here some perspective about why you're worried. It's nothing like a 30-year loan where the payments would be a more manageable $100 a month.

I know this because I have a private student loan with Sallie Mae for around $15k on similar terms, and my payments will be somewhere around $230 a month when I'm no longer in school.
posted by the young rope-rider at 5:28 AM on September 4, 2010

Federal law, as you may know, has also screwed me over. Student loans can't be discharged via bankruptcy, and generally can't be escaped at all except through some very extreme circumstances. So the forgiveness that's there for other loans, the ability to take a credit-score beating but escape with your life isn't there for me. The only options seem to be pay up or get the money bled out, one drop at a time.

Sorry, but you sound like a drama queen/king who is refusing to a take responsibility for your own actions. Assuming federal law did indeed "screw you over" by not agreeing to repay your debt or discharge it, Sallie Mae is "sinister" for giving you money and expecting repayment, your school "lied" when they said and you agreed that going in debt for a degree is a "reasonable strategy", and that "fleeing the country" would screw your mom over, your only option is indeed to "pay up or get the money get bled out, one drop at a time".

Sorry, but time to drop the drama, put on your grown up pants and deal with the consequences of your decisions. Call your finalncial aid office and see what your options are. You can extend it to a 30 year debt (that's what I did 15 years ago with sinister Salliemae and a much bigger debt than you).

Paying back large student loan debt isn't fun. I, like you, was scared when my debt came due and was honestly shocked by the fact that my monthly payments (before converting them to a 30 year amortization) ate up nearly all of my income. I lived for many years after graduation no better than a poor college student because every extra dime went to paying back those loans.

But I did and gained the hard-won wisdom that going into debt is something to be taken seriously and that it has consequences.
posted by murrey at 6:00 AM on September 4, 2010 [12 favorites]

I'd never, in my wildest dreams consider taking out a loan that large for anything other than education

Oh, really? Not even for a house? Or a car?

Is 30k your total debt load, or do you have federal student loans from elsewhere? The worst part of the 30k, it seems to me, is the 5-year payback plan. Graudating with 25k of loans is average for students on financial aid at lot of colleges, and over 10 years, the payments are manageable.

From what I remember, when I needed a loan, I was allowed to borrow something like around $20k in Perkins and DoE loans per year before going the private loan route. It's possible you could effectively repay much of your SallieMae loan with a federal loan this way.

Then, after that, you get a job and make your payments each month.
posted by deanc at 6:07 AM on September 4, 2010

Take heart! If the size of the monthly payments is the scary thing, it looks like Sallie Mae offers several options for reducing them/extending the loan period. Many graduates end up modifying the original loan terms in one way or another to make repayment work for them, and the lender will actually help you do this, especially if you work with them in a timely way (i.e., before you miss 6 months of payments).

One other positive aspect of student loans to note: if you make regular payments on them, they can be a POSITIVE part of your credit history. That's right: having a student loan in active repayment can make you look better to a mortgage lender a few years down the road. It's much better than having credit card debt.

[Me: about $20k of loans in '97-98 for a degree I didn't even finish. Deferred payments while in school for a degree I did finish. Now in repayment. Just got a mortgage of my very own - no problem, even under the new tightened credit guidelines.]
posted by philokalia at 6:08 AM on September 4, 2010

I remember well the panic I felt before I took out 30K in student loans to fund my graduate degree. It was so bad that I actually had several sessions with one of my undergraduate school counselors to help me get the panic under control.

Do you qualify for a Federal Direct Loan? Once I finished graduate school I applied to have my loans consolidated under the above mentioned program. I was able to set up an extended repayment program. The caveat is not all student loans qualify for consolidation under this program, but the worse they can say is no, yes?

Talk to your college's financial aid office as others suggested and if the panic is that bad, see one of the counselors. Both parties can assist in you in formulating a plan.
posted by theBigRedKittyPurrs at 6:28 AM on September 4, 2010

Now I just want my life back.

Oh? Who took your life from you? Your lender? Really? Because I have a feeling your life is still yours, same as it was yesterday, same as the day before, same as tomorrow.

You can defer payment of student loans due to financial hardship. You can arrange a monthly payment schedule of peanuts a day. They only start going after you when you start playing dead and stop returning their phone calls. And what can they do? Garnish your wages. So, if you're not making anything anyway, what's the concern?

Deep breaths, dude.
posted by Civil_Disobedient at 6:29 AM on September 4, 2010 [9 favorites]

Take some deep breaths. I was in a similar position 20 years ago. I know how overwhelming it seems right now, but believe me, it does get better. The money you invested in your education will eventually pay off. Not today, not tomorrow, but in time.

My best advice to you is to keep doing what you're doing. Ask around for better deals on loans and find out what you can do to lessen your monthly payment. Above all, communicate with Sallie Mae (or the bank), and let them know you're trying and doing the best you can. The tactic of avoiding payments and phone calls only makes it worse in several ways.

Also, a part time job would help. It's not a ton of money, but every little bit helps and it will keep you busy to stop worrying so much about this. I know at one point I had a full time and two part time jobs and it really helped me to keep up with things for a while. No, it's not easy, but it's what you have to do.
posted by NoraCharles at 6:48 AM on September 4, 2010

A lot of debt, almost no funds to pay it. ... In the many similar threads I've read someone invariably says "X? X is nothing. I've got Y amount." Please don't go there. It all depends on the person, and for me, 30,000 is an incredible, insurmountable sum.

Per-spec-tive. When it comes to emotional/family/personal issues, the AskMe maxim of "everyone's hardest struggle is their hardest struggle" applies. Don't tell people not to worry about their alcoholic parent because your parent was a heroin addict. Debt, however, is a math problem. Make lots of money and have a small, low-interest rate, long-term loan? Then your debt is not a big deal. Make very little money, but a large loan is due soon at a crushing interest rate? That's a big problem. You sound like you need someone to explain the math to you so that you can get these things in the proper perspective. Starting with:

You do not need $30,000 in funds to pay back at $30,000 loan. How much do you need? In the month after you graduate, you need about $500-$600. Can you come up with $500-$600? Each month, you need $500-$600, until you manage to extend the loan to a 10-year term, at which point you need $250-$300. Extend it to 15-20 years, and you need even less (but you'll pay more in interest). You need a job (or jobs) that can cover these payments. This may involve living at home, paying no rent for a little bit so you have enough money to pay down the loan.

You've told us only two parts of the equation: the principal of the loan and the term. What's the interest rate? What kind of job are you going to get/what's your income going to be? What will your living expenses be? In the end, those are the only things that matter, here.That's what the counselors in your school's financial office are going to explain to you, too.
posted by deanc at 7:00 AM on September 4, 2010 [3 favorites]

Many people leave college and go on to pick up a car payment (~$200-400/mth) and a mortgage payment (~700-2000/mth). The money that you owe to your student loans each month will, in the end, just reduce the money that you have available for those kinds of things. I purchased an older used car and live in a smaller home than I might have chose otherwise. In many ways those necessary decisions have taught me that the used car and smaller home aren't all that bad to have.

As for Sallie Mae, I had my loans with them for the first couple of years after grad school, and honestly they weren't that bad. Compared to the gov't loan website, their information is much easier to navigate and the online payment system processes more quickly.
posted by bizzyb at 7:16 AM on September 4, 2010

Didn't read all of the previous posts.

I have $300K in student loans (undergrad and law school), about $50K of which are through Sallie Mae. Not sure of the specific terms of your loans, but my SM loans can be paid back over 10 years; you can also choose the graduated repayment plan (or something of a similar name; depends on your loan type), where you pay less per month initially, and then increase over time. You can also request a forbearance due to economic hardship. They may not grant it, but it's worth requesting.

(1) Talk to your financial aid office; (2) talk to Sallie Mae; (3) Stop panicking

If all else fails: If your interest rate is relatively high (as mine was), it may be worthwhile to see if your mom would be willing to take out a loan for the balance (or part of the balance) of your SM loans at a lower rate; pay off the loans with the new loan, and at least save yourself some interest.
posted by melissasaurus at 8:45 AM on September 4, 2010

> bad, bad things happen when you don't pay private student loans.

I'm curious: what are the particularly negative consequences, relative to other types of loan?
posted by Coventry at 8:59 AM on September 4, 2010

I'm curious: what are the particularly negative consequences, relative to other types of loan?

A motivated creditor with literally unlimted resources to pursue sastifaction:

1) ruined credit score
2) wages garished
3) property liens
4) 10-1000 phone calls a day
5) harrassing your relatives, cosigners
posted by T.D. Strange at 9:11 AM on September 4, 2010

Those things all happen with other types of loans, too, though. Is it that they can turn the pressure all the way up, because they don't have to worry about forcing you into bankruptcy?
posted by Coventry at 9:18 AM on September 4, 2010

1) ruined credit score

I would bet hard cash that people that don't pay their student loans because they can't afford it already have terrible credit scores. The funny thing is, a bad credit score is almost liberating because it utterly castrates collectors' threats. "Oh no, my credit score! Maybe I'll find some time to worry about that after I find out how I'm going to keep the lights on, the heat on, and the rent paid."

2) wages garished

This is true. But if you're not making any money anyway, this isn't the end of the world. You'll go from broke to still broke.

3) property liens

This requires property to begin with.

4) 10-1000 phone calls a day
Dear Debt Collector:

Pursuant to my rights under federal debt collection laws, I am requesting that you cease and desist communication with me, as well as my family and friends, in relation to this and all other alleged debts you claim I owe.

You are hereby notified that if you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the [your state here] Attorney General’s office. Civil and criminal claims will be pursued.


Your Name
5) harrassing your relatives, cosigners

See above.
posted by Civil_Disobedient at 9:30 AM on September 4, 2010 [9 favorites]

Almost all of my student loans have been through Sallie Mae and I haven't had one problem with them. I'm poor as dirt and have just as much debt as you do. Calm yourself down and realize that you need to stop worrying about the future and concentrate on the hear and now. Sallie Mae will work with you if you can't make your payments due to financial hardships - they have with me. All you have to do is talk to them.

deanc is right, you don't need $30,000 right now to pay your debt. Stop panicking and focus on what you need to do right now to keep them off your back. Seriously, your life is not over. I'm sorry your school lied to you, but them's the breaks. I'm sorry you weren't paying attention when you were taken advantage of, but you made your own bed...
posted by patheral at 9:39 AM on September 4, 2010 [4 favorites]

*here and now
posted by patheral at 9:40 AM on September 4, 2010

Hey, look, if you want to stick it to the Man, go ahead and stick it to the Man. But I'd say first you need to figure out for yourself if you're an honest to goodness stick-it-to-the-Man type of person. Given that you've presented your options here as basically either sticking your head in the oven or fleeing the country because you have what is a relatively minor amount of student loan debt, I'm going to bet you're not that sort of person. Sorry.

First, look on the Sallie Mae website and read up on Deferment and Forbearance. This is an option if you really can't swing your monthly payments because your wage is too low and you cannot come up with another source of additional income. Second, call Sallie Mae on the phone and talk to a real-life human being about how to pay off your debt while making what feels like a small wage. You will not be the first person they've had this conversation with.

Then, go get a pencil and paper. Write down your monthly income. Write down your monthly expenditures. If you have more expenditures than income, start figuring out where you can spend less money. I'm guessing your creature comforts are pretty important to you. Got an Iphone? Maybe premium cable? A gaming system like an XBox or a Playstation? Like to head to the bar a few nights a week? Enjoy designer clothes and shoes, perhaps? Want to order pizza or Chinese a couple of nights a week? Have a car? Look at how you're living and what can reasonably be trimmed in order that you have your basic needs met with a bit leftover for an indulgence occasionally. When I was out of school, I didn't have a cell phone, I didn't have premium cable, I didn't have a gym membership, I didn't buy expensive clothes or shoes, I cooked most of my meals and I went out once or twice a month until I started to make more money. I read alot, went to the movies, had people over to hang out or went to friend's homes, went to the park, went to free days at museums, went to $8 cover concerts, baked or cooked, talked on my land line to friends and rented alot of videos. I lived. I paid off my student loan in its entirety to the tune of $400 bucks a month on a $26,000 a year income with a couple of periods of forbearance in there.

Then, consider part-time work. 10 or 12 hours a week at 8 bucks an hour would provide you with about $300 bucks pocket money a month after taxes. Deliver pizza. Bus tables. Clean apartments. It's not going to kill you.

Also bear in mind that you can choose to live however you want. It's your choice. Personally, I decided that the person I was and what my priorities were in my early twenties were not who I wanted to be for the rest of my life. Ultimately, it's up to you. Just make sure you decide what you're going to do because you've examined all of your options rationally, not because you decided to run away from reality and make knee-jerk, fear based decisions.
posted by TryTheTilapia at 10:53 AM on September 4, 2010 [1 favorite]

If it makes you feel any better, my student loan was bought by Sallie Mae a few years ago. I was terrified of Sallie Mae, having read all the horror stories. However, I was very surprised that I have not had a problem. The Sallie Mae web interface is easy to use and I can easily pay extra each month if I want.

My loans were from the government, for grad school. I owed appoximately $25,000. My job prospects weren't great after graduation so I consolidated my loans and set them up to be paid off after 20 years. I pay $134 a month (and even at my poorest, this was do-able). For a 10 year loan, it would have been about $250 a month.

I'm not sure how private loans work. However, before you decide that $30,000 is insurmountable, you might want to do some research on how much your payment will be and find out whether you can extend loan term.
posted by parakeetdog at 1:08 PM on September 4, 2010

Have you looked into any of the public service forgiveness programs?

You can also request deferment and forbearance.

And, don't think I'm nuts--try out for Who Wants to Be a Millionaire. Can't hurt.
posted by Ideefixe at 1:36 PM on September 4, 2010

I totally totally understand stressing about student loans, as some people (like myself) are debt averse and it just sucks to have that kind of money hanging over your head. I got lucky and was able way to pay mine off much sooner than expected but until that happened, I just paid the monthly ticket.

But, I think what everyone is saying on this thread is right on. It's NOT that big of a deal in the long run. It'll be a monthly bill and you'll deal with it. Even if you don't deal with it for awhile, trust me, it's going to all work out. I know lots of people with 30k plus in student loans, and their lives are just fine. I would say: just decide to work it out. Who knows, you might have an opportunity to learn a lot about money&savings, and empower yourself to be financially savvy. Just stay on top of it as best you can and if you can't, forbearance and deferment are totally fine options.
posted by Rocket26 at 6:56 PM on September 4, 2010

Thanks for the responses guys (and gals). They've been a lot kinder then I expected (mostly anyway).

There's been a lot of response (which is awesome) but it's probably be better if I summarize my reply.

So here's the useful bits I've gathered so far:

-It may be possible to release my Mother as co-payer after a year of payments. (great bit of info, thanks young rope rider.)

-Many posts claim I can easily go into deferment or adjust the monthly payments at will to whatever I can pay. My understanding is that neither of these are true of private loans, but I'll check with SM to be sure. If they are, that solves a lot of the problem.

A few statements/questions I'd like to reply to, just to make things clearer:

-Like I said, 30,000 is a lot for me. No, I wouldn't buy a house or car right now: I'm on the razor's edge of being able to afford a small, run-down apartment.

-A lot of people assume degree=more money, but that was part of the fallacy that landed me here in the first place. I'm sure college works great for some people, but it hasn't worked for me. Maybe that's what's really eating at me: not the money I own but the lack of a future. I have no career to step out into (even if the economy didn't suck), no nothing. I'm at the same place I'd have been at, in terms of making money, if I'd never enrolled. Except I wouldn't be $30,000 in the hole.

-I know the posts encouraging frugality are well-meaning, but honestly there isn't much fat left to trim. I'm not paying for much of anything at the moment, because I can't. Almost everything is either mooched or non-existent. I wouldn't even have a cell-phone if I hadn't found a pre-paid plan that doesn't cost much more than $10 a month (I don't talk much on it).

Anyway, the take-away is that I'm going to see if I really can get this debt deferred or the re-payment adjusted. I'll try to remember to post again with an update on how that works out, in the interest of making the thread more useful (and on the off chance anyone is curious). Thanks again for the help; I do feel slightly better now.
posted by wanderingchord at 8:36 PM on September 4, 2010 [1 favorite]

I don't have anything particularly helpful to contribute. I just wanted to wish you loads of luck. I, too, am a college student and know how ridiculously and intimidatingly expensive a college education is. There's something wrong about a system that pretty much requires 20-somethings to go to college and get into massive amounts of debt. I know a lot of people have said that you have to "take responsibility for your choices" or "be a grown-up," but $30K is incredibly intimidating to a 20-something and the average 18 year old who first starts taking out loans has no idea what taking out a loan really means.

And why should we? I mean, yes, we should be conscious and smart and aware and of course we should all be smart consumers. But at 18, we're thinking about prom and living away from home for the first time, not what $10,000 of debt per year will mean in five years. I don't think we're equipped to truly understand what that means--how many kids have handled $10,000 before college? Besides, what other transition in life that we've been through before has us grappling with $10,000 in debt per year? College doesn't feel like a choice anymore, so I don't think we handle the financing part as much of a choice either.

That's not to say that you should flee or spend the next few months shaking your fists at the sky and moaning, "woe is me," but I still think you're allowed to think that it sucks. It does suck, and it especially sucks because you didn't know what you were getting into. Still, it is not unmanageable. If you are unable to negotiate a longer-term loan, I still think you'll be able to get through this. It'll be a lot of work but you will make it happen.

I guess what I'm saying is... take responsibility but also know that you are legitimate in being scared and intimidated by your situation. It's fine. It's normal. But it's also what you make of it. Good luck!!
posted by melancholyplay at 11:00 PM on September 4, 2010

Wanderchord, we all lived in small, rundown apartments after college. Ask me about Roosevelt Island! Seriously, you won't know what's what until you actually have to face the barrel of the gun. If you are really serious about acting on fear, why not take a job that you can devote the entire salary to an account you won't touch until you finish school. Then, when you're done, you can go to the loan agency and say, "this is what I have, and I want to pay it down for the year." Or, "this is what I have and I want to pay a big chunk at once." either way, you will be stuck with payments but you'll buy yourself some breathing room. I have the feeling that even a part-time job like bartending or waitressing will earn you $15,000 in the next nine months. The challenge is to resist the temptation of easy money and pay that money forward to what you really see as important.
posted by parmanparman at 2:16 AM on September 5, 2010

-A lot of people assume degree=more money, but that was part of the fallacy that landed me here in the first place. I'm sure college works great for some people, but it hasn't worked for me.

A lot of your post, including this comment, is far too vague for us to do anything with, other than to point out that you are really stressed. Now, I don't know whether you got a degree from some kind of rip-off for-profit university or whatever, but your first step is just getting a job after graduation. It's true we don't know what your job prospects are, but my advice would be to speak with someone in your college's career office. As far as navigating SM's bureaucracy, your school's financial aid office can provide some guidance there, as well.

The average debt load for those in debt from a private university is $25k. Most people go on the 10-year payment plan and get a job that covers those payments. So keep in mind that the answers you get from AskMeFi are going to reflect that perspective, outside more tangible, firm details of your situation.
posted by deanc at 5:55 AM on September 5, 2010

I'm sure all of the answerers here have good intentions, but:

1. Federal loans are vastly different from private loans; if you have federal loans your payments were much lower (total/30 is much different than total/5).

2. The terms of federal loans are much better, and the programs for repayment completely different, they can be deferred or forgiven in certain circumstances--completely different from the OP's situation and not really relevant

2. The economy isn't the same now as it was 5, 10, or 15 years ago, real wages are down and jobs are scarce--yes, even jobs at Starbucks and the Gap--so "suck it up and get a job, I did" is not relevant to the OP
posted by the young rope-rider at 7:57 AM on September 5, 2010

To follow up on my previous comment, here's a chart going around the internets today on student debt. Other possible outcomes I didnt know about either: garishment without a court order and garishment of tax returns and social security benefits.
posted by T.D. Strange at 8:32 AM on September 7, 2010

More school and more (but better) student loan debt may be your answer, actually. I wrote a detailed response about this strategy previously.
posted by Jacqueline at 4:29 PM on September 7, 2010

Thanks melancholyplay, that means a lot.

I'm finally contacting Sallie Mae after doing some more digging (should have been quicker, but it's been a chaotic week). Meanwhile though, I have a few updates I think I should add.

First, a confession of my own stupidity: I was mistakenly understating the amount of federal loans I have considerably. I have about 20,000 there, in addition to the 27,000 with Sallie Mae. Now maybe my worry makes a little more sense? It's chopped up into a couple smaller ones, Stafford and Direct being the biggest. The good news is that at least with this half I may be able to consolidate and get into an Income-Based Repayment plan.

I'm still more worried about SM though. Here's a few things I've found: First, there are basically two options, forbearance and deferment. In forbearance I can skip a few payments, but they still capitalize the interest. Deferment for economic hardship exists, but the requirements are complex, and even if I qualify, it maxes out at 3 years. Will I be in a better place in 3 years? Sure, hopefully. But in a position where I can pay 6-700 a month on loans? I'm skeptical.

"To follow up on my previous comment, here's a chart going around the internets today on student debt. Other possible outcomes I didnt know about either: garishment without a court order and garishment of tax returns and social security benefits."

Yeah, basically once you make SM unhappy and they turn it over to collections they can violate you in pretty much every way financially possible. People say as long as you stay on their good side it's still workable; the question is whether I'll be able to or not.

"More school and more (but better) student loan debt may be your answer, actually. I wrote a detailed response about this strategy previously."

I appreciate the strategy, and for some people it probably works. But I can't do any more college. Even with the loans I was relying a lot on my family to help with things like food and shelter. Now that the economy has gone to hell things are looking pretty grim for them, which means I'll have to pay my own way pretty soon. Which means I have to work more, which means I don't have time for college. I suppose I could take a massive loan out and pay for living expenses too, but...I just don't have the will to go any deeper in debt.

"A lot of your post, including this comment, is far too vague for us to do anything with, other than to point out that you are really stressed. Now, I don't know whether you got a degree from some kind of rip-off for-profit university or whatever, but your first step is just getting a job after graduation. It's true we don't know what your job prospects are, but my advice would be to speak with someone in your college's career office. As far as navigating SM's bureaucracy, your school's financial aid office can provide some guidance there, as well."

I apologize if some of this needs to be more specific. Understand it's a little hard to talk about, even on an anonymous forum like this. Let me be clearer then: I don't have the skills to get a job in my field (Illustration). I need considerably more practice before I have them. Which means that the only option open to me is part-time, near-minimum-wage work, the same stuff I'd be doing without a degree. And as rope-rider correctly observed, thanks to this economy a whole bunch of people are out there looking for the same jobs.

I will be visiting the financial aid office soon too, mostly to discuss the federal stuff but I'll ask about SM as well. I have a sinking feeling the only people that really know how SM works are SM themselves.

"The challenge is to resist the temptation of easy money and pay that money forward to what you really see as important."

Again, this is probably a result of me being too vague. I currently am working 20hrs/week to make room for school. I'm doing everything I can to get second job. But even if I get it, the cash will barely be enough to support myself in a very basic way (food, shelter, all that). Like I said before, there isn't much fat to cut.

Thanks again to all for the advice and support, and for putting up with my hyperbole in the process. Like I said in the last post, I'll try to keep this updated as things progress.
posted by wanderingchord at 2:30 PM on September 13, 2010

One more follow-up here.

Apologies for not getting to this sooner. Life has been pretty intense the past few months.

So for those in a similar situation reading this, good news and bad. The good: I have two kinds of loans, public and private. This can be confusing, because until recently private lenders "serviced" the public loans too. Now the government takes care of its own loans. And as it turns out, public, federal loans are great, because there are a number of "repayment plans" that will adjust your payments according to your income. Do a little research to see which one fits your needs best, but in general IBR seems to be the most useful. Thanks to my extremely low income ($700 a month gross), under IBR my payments drop to zero on all my federal loans, and for some of them I'm not even accumulating interest. So after a lot of paperwork and calling around to nudge some of the agencies into actually FILING that paperwork, all my federal loans are essentially frozen until I can get a decent job. Awesome.

The bad news is that my private loan with Sallie Mae isn't eligible for any of these programs. The only repayment plan is "Whatever Sallie Mae feels like granting," and from what I've been able to find so far, the chances aren't good. In a hilarious bit of cruelty, they also refuse to even fully talk about my repayment options until the loan goes into repayment two months from now. I'll probably post another question with updated info once I've called them again, but one last time, thanks for all the help in this thread.
posted by wanderingchord at 7:12 AM on March 19, 2011

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