Can I get student loans while my chapter 7 is pending?

[HHM]

Well, most CD rates nowadays are less than the student loan interest rates, so you can't really get ahead with that strategy.

Not sure why you would borrow $24,000, when you need $12K, then pay back $12K 4 years later to still only owe $12K. It is a wash.

[tigergem]

Yeah, I know it's not necessarily a money maker, but if the student had the $12k debt and got in a bind - - for whatever reason - - to repay it after graduation... I thought (perhaps) it might be advantageous to them to have the other half of the loan on hand to begin the repayment of itself. To defer trouble. Just a thought. Neither here nor there.

[HHM]

I don't see it, having that money in reserve means your payment is double. I think if you really run the numbers on this, it doesn't make sense in ANYWAY.

For the sake of argument, lets assume a
$12,000 loan,
5%
10 year repayment (just so we have some way to run the math).
-Payment would be $127.28
-the total cost of the loan is $15,273

$24,000 loan
5%
10 year repayment
-payment 254.56
-total coast of loan, $30,546

I don't think that paying the principal and interest on that extra $12,000 makes any sense for the purpose of having a reserve. SAVE IT, actually saving money is better.

Sorry tigergem, I have to say that it is a dumb idea.

[tigergem]

Huh. Ok. I don't doubt your word HHM. I guess the reason I thought of it was because I recently read that for Stafford undergraduate loans, loans first disbursed July 1, 2010–June 30, 2011, the interest rate is fixed at 4.5% and for loans first disbursed July 1, 2011–June 30, 2012, the interest rate is fixed at 3.4%.

And 2.5 year current CD rates for that rangish amount are between 2 and 2.5%.

My brain went into interest offsetting mode. I read too much and sometimes go off in tangents lol.

I don't know if the interest accrues on direct student loans while the person is in school or not. I'm guessing it does.

Yeah the total loan cost (using your 10 year figure) would be $29,847.86 with a repayment of 248.73 per month. (You made me dig out a calculator. Thanks. I didn't want to get this deep into it...)

A $12,000 30 month CD would give the student 351.91 in interest... or what? 1 1/2 payments... and roughly 48 months of time to get themselves established in a higher paying position.

Yeah wouldn't it be great if everyone was in the position of being able to save for their education and get themselves out of the uneducated minimum wage poverty rut that keeps them from being able to save for their education? And just never mind the current status of our national employment... Of course, those are the same people that probably wouldn't be able to keep their mitts off the savings angle of it and would end up getting themselves in the trouble you speak of.

[Goldfish]

Tiger,

We think along the same lines.

1. I would think that if one's only secure source of money needs to come from a student loan, then that's what needs to be done.

2. It's funny to me how you think of the use of these possible funds. I myself decided to 'balance transfer' from credit card to IRA's years ago. In the end, when I surprisingly got a lawsuit concerning my very old student loan, I withdrew money from the IRA's to pay it.
Was that a wise investment?
I might think that really in the end, as uneduated as I was about the nondischargeability of student debt, and how that debt should have been my top priority, in the end, the payment for it ultimately came from credit card (hopefully to be discharged).

I will consider your probe more thoroughly. This is exactly what I need to think about.

One of the most important things for me is to consider whether I want to complete my PhD; whether it would be a 'good' thing. Whether to just register at some mickey mouse operation, or Santa Monica community college for some other sort of degree or other. But I am fascinated by the fact that this guy from University of Phoenix could be a billionaire, never having himself gotten a bachelor's degree.

Education on-line is clearly something to be reckoned with. I am only accustomed to teaching college in the classroom.

To Be Continued. gf

[Goldfish]

Sorry, once again my post is only informed up to page 1 of this thread. I'll be reading.

[tigergem]

Wow, don't you get hit with a huge penalty if you withdraw from an IRA early? I wouldn't think that would be a great idea at all. The cash advance (dischargeable...eventually, anyway) to pay the student loan directly would have been a better idea.

Anyway, I wouldn't put too much credence in this "idea" of mine, if I were you. A financial genius, I am definitely not... it was really just a passing thought I tossed out for the banter.

[Goldfish]

I balanced transfered at 0 interest for at least a year. And I had Roth IRA's which means there was no penalties for anything because
1. I already paid tax on the money before it went in
2. The IRA's only lost money so there was no interest/dividend income to be penalized for early withdrawal. All that happened is I put money in and then took it out.

The way I had calculated it at the time (and I remember talking to financial people about it) was that the way the stock market was doing compared to the credit card interest rate, it looked perhaps like a toss-up. And I had wanted to get some money into a retirement account.

Incidentally, as an official retiree of the State of CA, my retirement plan is a defined benefit plan. [Not like those 401K's...] It is very unique among retirement plans. I am considering maybe trying to come off "retirement" so that I would be able to do more than 1/2 time work with CALPERS.
I'm at a cross-roads, and there are many options to consider.

gf

[jacko]

Why would you file BK7 if you are collection proof? Do you have medical debt?

I filed pro se at the end of march (chapter 7). Currently, im living and supporting my child on student loans. I am suppose to be getting some loans for summer (which im depneding on seriously), I heard two different things from many different people:

1. Its a federal law you cannot barrow student loans while bankruptcy is pending

and
2. Its a federal guaranteed loan. it is non dischargable. you are not in default, so its a non issue.

which is it? I need to know NOW so i can start my job search for wendy's me and my child will be out in the cold. Thanks

[tigergem]

Why would you file BK7 if you are collection proof? Do you have medical debt?

There are lots of reasons for a person to file bankruptcy even if they are "collection proof".

Foreclosure. Repossession. Just to make the creditors stop calling, because they keep calling even if you are "collection proof". And because the debts simply aren't getting resolved and that isn't a good feeling.

[Exployer1234]

After speaking to two different schools today you can not get any student loans while going through BK, but you can get pell grants. The schools I spoke with today said that you would have to wait 6 months to 1 year before you can do any student loans again for school.

[Majakat]

This is what I understand -

Can I receive a Stafford Loan if I have bad credit/declared bankruptcy/have late payments on credit cards?

Stafford Loan Benefits:
Fixed interest rate - as low as 5.6%
No payments while in school at least half-time

Yes. The Stafford Loan is not a credit-based loan, which means your credit history is not checked when you apply for a Stafford loan. Eligibility for the Stafford loan is based only on your financial need, which is determined when you file a FAFSA.

Note: If you are currently defaulted on any federal student loans, including Stafford Subsidized, Unsubsidized, Perkins or Parent PLUS Loans, you may not be eligible to receive any form of federal financial aid. Contact the U.S. Department of Education for more information on rehabilitating your delinquent or defaulted education loans.

[trigabyte1]

A BK in your history will not bar you from future Federal loans, but you can assume private loans are out of the question. You may also have issues getting a Parent PLUS loan - if you are more than 90 days late on any debt. However, this issue should not apply post-discharge.

See 11 USC 525(c)3:

http://www.law.cornell.edu/uscode/11/525.html

[trigabyte1]

Stafford Loan Benefits:
Fixed interest rate - as low as 5.6%
No payments while in school at least half-time

I think we need to clarify some points here.

First, the interest rate you quote, 5.6% only applies to Subsidized Stafford loans. You must prove you have financial need to get this loan.

You're eligible for the following amounts
1st year (<30 credits) - 3500
2nd year (31-60 credits) - 4500
3, 4, etc. years (>60 credits) - 5500

You can get additional loans (unsubsidized), where the interest accrues while you are in school, up to these limits (these are aggregate limits - meaning this includes Unsub + Sub as not everyone gets their full subsidized eligibility depending on financial need.) The unsub loans have a fixed rate of 6.8%

1st year (<30 credits) - 5500
2nd year (31-60 credits) - 6500
3, 4, etc. years (>60 credits) - 7500

In addition, any independent student (>24 y/o, having dependents, military veteran, etc.) is eligible for an additional $4,000-5000 a year in unsub.

So your totals could be:

1st year (<30 credits) - 9500
2nd year (31-60 credits) - 10500
3, 4, etc. years (>60 credits) - 12500

[lezlovin]

Hi all. I had my 341 meeting today, so I thought i'd check this. what a good convo back and forth about the student loans. I have no default loans or anything, and ive been assured from my school that I will be able to get hte loan. Its still not showing up in my student account though. I called them, they said its a problem with their system and not to worry. it is in fact a STAFFORD loan and not a PRIVATE loan. I dont qualify for those anyway with my bad credit and no cosigner. When i actually get the money in my hands i will post to help whoever i can who reads this as to wether or not it actually went through ( it better! i will be screwed if not ! )