Private Student Loan Debt

[kdhmps]

Hi Everyone,

I will spare the details of why I have private student loans v. federal student loans, but I have just over 60,000 in private student loan debt. Because of the nature of the student loan, I can never lock in an interest rate. The payments increase every month. The interest rates range from 8.75-almost 10 percent for each loan (each school term was a separate loan through the same company- Sallie Mae & Citibank). Few consolidation companies consolidate private versus federal student loan debt, and the ones I have found have a minimum 10% interest rate, plus they take on a loan fee of 3% in most scenarios.

I am a social worker. I make 25 k, soon to be 29 k in January. My health insurance is $207 at work per month, and I need the good group health insurance.

I registered for community college classes to sit for the CPA exam in the next year, even though I am afraid to spend any more money on school....yet I feel I have to make a career change to something lucrative...

Does anyone have any advice---I just started this job and plan to be almost negative with money! But decent pay is hard to come by in the field... Any suggestions on how to deal with the debt? I pay 600/month in student loans now, in two years it will be 800 b/c one loan is interest only now. I have a car payment, and I don't spend money on anything b/c I can't. I am not partying it away... What does anyone think of this? I can't go back in time...

[CityGal]

Soon I will be on that same loan boat. My suggestion is to surf the web....see what's out there to help. I'm not really good at any of this financial stuff but budgeting seems to help. Ugh....can't think of the helpful site I saw on here ...but it's called dealwithit.com or debtfree.com...damn I cannot remember.

[winneythepooh7]

I don't have any suggestions if you are not allowed to consolidate. All I can think of is if you call the loan people, explain and give proof of your financial situation and see if there's any possible way you can make an agreed upon lower monthly payment. I mean, this would work in their best interest, because of the interest they'd be making off of you. Another thought that I have is to see if you would be eligible for getting some of your loans paid off through NASW. I know it's hard because I think you may need to be licensed, and it is dependent year to year on funding, as well as the population you work with, and only a limited amount of applicants qualify. It can't hurt though to look into it. As for Stafford loans, I think that if you call them as well and try to work something out, they would be helpful. I mean, some of my clients pay like $25.00-$50.00 a month back on their loans.........

[Dude]

If you are having trouble making the monthly payments, it may be a good idea to consolidate your private loans and you do have the option of either getting variable rate or a fixed rate. I know that consolidation is offered for private loans. You should make sure you get the best deal if you do consolidate.

I know that Citibank and Education Finance Partners offer fixed rate private consolidation loans; although there fixed rate offers will have a higher fixed interest rate than variable. I know the Citibank fixed rate is closer to the variable than what Education Finance partners offers. It may be a good idea to fill out the application to see what rate they offer you and then you can choose not to sign if you don't want to. Although, keep in mind that an extra inquiry will appear on your credit report each time you apply. However, I have read that if several inquiries are made over a short amount of time, this will not lower your credit score.

Be aware that it may be a good idea to wait to fix your rate for two reasons:

1. If you think the prime rate will go down in the future.

2. If you think your credit will improve in the future. Improved credit will lead to a lower interest rate in the future. The same rule also applies if you have a variable rate.

Also if your credit now is better than it was when you intially to out the loans, you should be able to get a lower rate when you consolidate, thus lowering your payment even more. Obviously, making payments over a long term will increase the amount you pay in the long term. However, your not obligated to make lower payments forever if you consolidate since you can later increase the payments as long as there is no prepayment penalty.

In addition, try to pay as small of an origination fee as possible if you do consolidate. I believe a 3% origination fee is equivalent to an extra 1% in your interest rate.

Good luck

[AshleyJordan]

Soon I will be on that same loan boat. My suggestion is to surf the web....see what's out there to help. I'm not really good at any of this financial stuff but budgeting seems to help. Ugh....can't think of the helpful site I saw on here ...but it's called dealwithit.com or debtfree.com...damn I cannot remember.

http://www.youcandealwithit.com/

[sparky88]

My student loans are almost $600/month too. But my interest rates are lower (2.8% and 4.75%). It will go down to about $280/month in 3 yrs, then I will remain at that amount for the next 5 yrs or so.

I don't have advice, except that you are not alone. I always question my decision to go to school because it was so expensive and is such a huge burden now. oh well!

[AshleyJordan]

I also owe a ton of money (about 50K) and don't make very much, so I feel your pain. Have you spoken to a financial advisor or a nonprofit credit counselor about your options, here? Even though traditional consolidation programs may not work for you, there might be other programs around. Theoretically, maybe you could take out a low-interest bank loan to pay off the student loan debt, and make lower payments on that loan. . .I'm just using that as an example!

Also, although it may not be much consolation, you can deduct up to $2,500 in student loan interest payments from your taxable income and at least get a little bit of a break on your taxes.

[ann1q]

Salliemae sucks! I consolidated my private loans through cfs- suntech for a1% loan fee. I think the rate was prime+1 which isn't great but it is better than what I had.

[Millenial]

Sallie Mae does suck! They refused to give me a lower rate (even though my credit is excellent), and it actually came out to MORE money if i would consolidate. WTF?!? My rates went from 6% to 9.5% in a freakin year.

I plan on paying a huge chunk off then just waiting until a better offer comes by (maybe in 15 years, yeah right)

My federal loans are cosolidated with a local lender.

[Syracuse]

Sallie Mae does suck! They refused to give me a lower rate (even though my credit is excellent), and it actually came out to MORE money if i would consolidate. WTF?!? My rates went from 6% to 9.5% in a freakin year.

I plan on paying a huge chunk off then just waiting until a better offer comes by (maybe in 15 years, yeah right)

My federal loans are cosolidated with a local lender.
Don't get me started on sallie mae. The yused to be part of the govt, then went private, AFTER I had taken out a loan with them. Then after college couldn't get a job right away. Forbearance right? They want a 50 dollar a month fee for forbearance. Um the point of going into forbearance is you don't have 50 dollars to pay a month! And they'd call me 10 times a day. The people that work there are morons too and their lives must suck.

[PhillyGirl23]

If this makes you feel any better, I am in the same boat as well. I owe over 60K in student loans, much of that through private loans. Private loan consolidation general winds up being about equivalent or more in terms of interest. If you think the prime rate will go down then you might have a better option. My advice would be to call your lender and see what the terms are for forbearance. Generally, lenders will allow you to put off payments until you are financially on your feet. In terms of a career, if you are taking more classes, maybe you should consider working at a college so you can take the classes for free. Or, look into job opportunities that pay for schooling to help advance your career. Hope that helps!