student loans

iVillage Member
Registered: 04-17-2003
student loans
8
Thu, 05-15-2003 - 12:00am
I graduated from college several years ago but I am still in debt due to my student loans. I was totally unprepared for the responsibilty when I graduated. My loans have added up and I feel as though I'm drowning. To top it all off, my husband has loans too.

Does anyone have any advice on how to get out of this debt? Where do we start?
iVillage Member
Registered: 08-14-2002
In reply to: rudygirl
Thu, 05-15-2003 - 4:18am
This sounds like an advertisement, but it's really just advice from my own experience with my student loans. Been there, done that, still doing that. I feel like I've learned to work the system (legally) 7 ways to Sunday. I have $6,500 to go, then I'm free!

1) If you haven't done so already, consolidate your loans. Call up Sallie Mae and do it ASAP while interest rates are low. They have about 4 different repayment plans, so you can pick one that fits your budget.

2) Laws have changed recently - used to be you could only get 60 mos. of forebearance or deferrments (total, 12 mos at a time) if you run into trouble making payments. Not so anymore - now the time is unlimited (thank you Mr. Clinton). All it takes is filling out a form that states why you can't make payments, fax it in, and *presto* you can breathe easy for a year. Remember, though, your interest continues to accrue during this time. You have the option of paying the interest every quarter (good idea) during forebearance, or capitalizing it back into the loan if you must (bad idea).

3) Remember that student loan interest is 100% tax deductible. Again, new laws (Clinton, again). Used to be you could only deduct it during the first 60 mos. of repayment. Not so anymore. Now student loan interest is deductible for as long as you are paying on the loan. As long as it takes.

4) The only way to get out of this debt is to pay it off. Fortunately, you can count your student loans as one of your "good" debts, since it is tax deductible and interest rates are fairly low.

Anyone have more ideas???

Msfit

                  &nbs

iVillage Member
Registered: 03-26-2003
In reply to: rudygirl
Thu, 05-15-2003 - 9:07am
My only advice would be to consolidate loans.. but don't consolidate your loans with your husbands.. Two reasons.. If you were to ever get divorced (I know your probably saying you won't), but if you ever did, one of you would have to take the loans, because they can't split them back out. Secondly, if one of you were to pass away and you had consolidated them together, the person left would be responsible for ALL the loans.. If you keep them separate, there is a chance that the loans of the person who passed away would be forgiven.. Just something to think about.
Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
In reply to: rudygirl
Thu, 05-15-2003 - 9:11am
You've gotten good advice so far. I really don't know that much about student loans but wanted to let you know there is a Student Loan board here at money that can help you also.

http://messageboards.ivillage.com/iv-mlschoolloan

Becky

Avatar for noahs_mommy2007
iVillage Member
Registered: 04-17-2003
In reply to: rudygirl
Thu, 05-15-2003 - 9:31am
I agree with everyone else here. You must consolidate your loans. I am currently receiving student loans. I use the leftover (after tuition) to help me pay my bills. By the time I graduate next May I will have all of my credit cards and medical bills paid off. Then all I will have is basic living expenses(rent, utilities, food) and my student loans. I plan on consolidating them from the very beginning so that I will have a payment I can afford. It can literally cut your payment in half. What you pay back is definitely tax deductible and interest rates are really low. That is why I don't feel bad about using my excess to pay off the high interest credit cards. You should definitely consolidate.
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
In reply to: rudygirl
Thu, 05-15-2003 - 10:53am
Hi there and thanks for posting!

First I want to say that Becky has given a very valuable link to the Student Loans board here on iVillage - DEFINITELY worth checking out!

I still have student loan debt, and because of that, I periodically peruse the Student Loans board. cl-assilemw recently posted the following message on her board: http://messageboards.ivillage.com/n/mb/message.asp?webtag=iv-mlschoolloan&msg=892.1&ctx=0

Read the article she links to! I would NOT consolidate my student loans until AFTER July 1 of this year. If you consolidate now, you could get locked in at a higher rate than what the rates may be in July. We've not yet hit rock bottom on student loan rates (that's the good news!!).

The bad news, like another posted already mentioned, the way to get out from under your sl debt is to repay it. I'm still paying mine - have been since 1994. It's tough, but it gets easier with time.

Hope this helps!

Danni

All my best,
Danni

iVillage Member
Registered: 04-28-2003
In reply to: rudygirl
Thu, 05-15-2003 - 5:57pm
Hey Msfit,

Thanks you just made my day!!! I didn't know the laws have changed to allow for tax deductions after 60 months. Wow, doesn't that make a whole lotta sense?! I could never figure out why the gov't only permitted a tax deduction for ONLY the first 60 months. Finally, somebody out there is bringing instrumental changes to archaic rules of practice.

You also mentioned paying off interest that accrues when a loan goes into forebearance, otherwise it gets capitalized back into the loan. Do you know at what point this takes place? After the loan is out of forebearance or after each quarter?

Thanks for all your info.

Kali :-)

P.S. Hi Rudygirl, everyone has offered you some great ideas. I know where you're coming from I've got $33,000 in loans to pay back. It gets a bit daunting but the key is consolidating them at a fixed LOW interest rate and then repaying them every month. And a good chunk at a time too.


iVillage Member
Registered: 08-14-2002
In reply to: rudygirl
Thu, 05-15-2003 - 9:37pm
At least with Sallie Mae (don't know about other lenders), the interest is capitalized every quarter while your student loans are in forebearance or deferrment.

Something interesting with my loans, that I've never seen happen with any other type of loan: I've been paying extra (about double or three times my payments) for the past year or two. Every time I do this, the due date for my next payment gets pushed back - I now do not have a payment due until September 2006! Of course I will continuing making payments, otherwise the interest adds up and I would be right back where I started. Hopefully, I will have these paid OFF by that date.

Msfit


Edited 5/16/2003 2:14:31 AM ET by msfit777

                  &nbs

iVillage Member
Registered: 04-22-2003
In reply to: rudygirl
Fri, 05-16-2003 - 3:05pm
Now you can consolidate through sallie mae for your student loans,

get your interest lowered and lower your payments so talk to them.