Student Loans- What to do?

[luvtocrop]

Between my husband and I, we have $80,000 in student loan debt. I saw a BK lawyer yesterday and she made me feel just AWFUL about them. Said I should be paying $1000+/month to get rid of them.

Anyone else with student loans have any success negotiating balances due, or anyone have any advise on what to do, how to manage this kind of debt?

[Mi Bankruptcy]

First of All.. You should not have to deal with an attorney that makes you feel bad. I suggest looking for someone with a little compassion. To answer you question. I have never heard of anyone getting their Student loans BK'd unless it was a true undue hardship( sickness). You have to be able to prove it. I am in the same boat.. However, not to the tune of 80K.

[luvtocrop]

I know I cannot include them, but wondering if there are other options out there... lower interest, etc.

[JRScott]

As part of the bankruptcy you could fill out the hardship petition for student loans, that's really the only way to get them modified through the courts. However the success rate is extremely low based on what I've seen here, and next to nil. Still never hurts to try.

If you each have multiple student loans you might could attempt to see if there is a way to consolidate them into one loan. That might lower your interest rate and payment. You'd need to look at each of them to determine if this is possible and how to do it.

[CindyLou]

I owe 75,000 and the payments are less than 300 per month over a 30 year period.

[pageturner]

I was told that I will be able to put them in deferment during the time of the bankruptcy and pay only interest.

[StartingOver08]

Between my husband and I, we have $80,000 in student loan debt. I saw a BK lawyer yesterday and she made me feel just AWFUL about them. Said I should be paying $1000+/month to get rid of them.

Anyone else with student loans have any success negotiating balances due, or anyone have any advise on what to do, how to manage this kind of debt?

I am sorry to hear that your attorney made you feel awful about this debt. But looking at the big picture, that is like buying another house to live in if you pay it over 30 years. If your interest rate is for example 6.5% and you make the min payment of $505.65 per month you will have paid $182,035.59 over the life of the loan (of which a little over $102k is interest!!!).

I would try to attack this debt on a couple different sides right away. The first is to find out if you are eligible for any sort of FORGIVENESS of the debt. See this link:

http://www.finaid.org/loans/forgiveness.phtml

Next, and this one might be rough given your current situation, I would try to figure out what I could do to ACCLERLATE the payments to reduce the total amount as quickly as possible. Go here to enter in different figures to arrive at something you can do. This is a amortization calculator

http://www.hsh.com/calc-amort.html

In the above example of $80,000 at 6.5% fixed for 30 yrs, you can save over $35,000 by paying another $300/month. OR if you make an ANNUAL LUMP SUM payment of $3500 (say when you get your tax return) you can also save nearly $35,000. Plus save lots of years on paying.

I don't know your situation. So it is best you calculate what is best for you. Maybe you can get some forgiven and some acclerated. Good luck in handling this student loan.

The problem with deferment is...doesn't the interest continue to accrue while in deferment? A friend of mine, a school teacher, had about $50k in student loans when she graduated collage. She has managed to defer these loans for one reason or another for years and years. (Many years). Well, right now she owes almost exactly DOUBLE ($99k). And, it is interfering in her ability to purchase a home.

[luvtocrop]

My personal loans amount to just under $30,000. I just looked them up, I have a $15k unsubsidized loan, and a $15k subsidized loan. Both were locked in, years ago, at 4.25% interest. Is this pretty good? Could I do better?

It appears that the "climbing" debt is not coming from my loan, but rather my husband's. He has almost $50,000 in student loan debt from 1 1/2 years in law school. I need to check out his rate, as it is his loan(s) that seem to be growing and growing...

[StartingOver08]

Your loan sounds very good. I would still check out the link for forgivness just to see if you can get any part of it reduced.

Also, even if you make a very, very small payment of like $50 per month toward principal on your payments you can save almost 12 years in payment and SAVE over $10,000 in interest payments. (I don't have your loan info as to # of yrs of payout etc, so I had to make assumptions on length of loan payment. I "assumed" $30k at 4.25% for 30 yrs) If my assumptions are incorrect, just plug in your correct terms in the amortization calculator and 'play around' with various figures to acclerate. BTW, I call that extra $50per month my PIZZA theory. You buy one less pizza/month. Because for about the price of a large pizza with everything on it and a 6 pack 1 time per month you can pay off your student loan almost 12 yrs early and save ten grand!!

Your husband's loans need more work. Is it possible for him to consolidate the loans?? Are they subsidized or unsubsidized? What are the terms? Remember, attorney's are great with words...not so much with MATH!!!

[biggomez777]

I have to agree with the above posters, ditch the lawyer. No lawyer, or anyone else for that matter, should make you feel bad about your debt. I know for DW and I we could extend the life of our loan, and then make higher payments as were available. If you've got the will to do that, it can work. Allows the flexibility to take a lower minimum if an emergency comes up, but you can have a fixed non-emergency month payment as well. However, our loans are 10yrs, not 30. We're paying(as soon as the stay ends) $~400/month on $30k.