repayment

[f0rbidden]

Hi everyone

 

I'm interested in knowing if anyone has successfully reduced their SL payments...I have a LOT of student loans, and right now they are deferred until September. They've been consolidated, but I'm still looking at a payment in excess of $500/month, which we cannot afford.

 

We are trying to buy a house now, and around here, that's quite a feat, with prices in excess of $500k for a small home, so I don't want to overextend - I don't want to ever be in credit hell again. EVER.

 

So, any suggestions on getting payments to a place we can afford?

 

Thanks

[Polaroy2]

You will need to talk with ALL your borrowers to get it reduced. If you already have, and it's currently at the lowest right now, you're stuck... Getting a private loan won't help as SL interest rates are generally pretty low.

 

Options:

 

Get a second job

 

Borrow from family to pay off...

 

Other than that, if you default, it will be harder to get SL in the future for yourself or your kids. Additionally, SLs can be garnished from SS. One way or another you will pay it back. Whether it be now or when your 60. And no, SLs cannot be discharged in BK

[f0rbidden]

well, I guess I am lucky since my SL's are with one lender - consolidated.

 

I know they aren't dischargeable, but there is no way to pay that $500 a month. I'll talk with them more when repayment time approaches! It's something we'll have to deal with.

[ziggypop]

well, I guess I am lucky since my SL's are with one lender - consolidated.

 

I know they aren't dischargeable, but there is no way to pay that $500 a month. I'll talk with them more when repayment time approaches! It's something we'll have to deal with.

 

Who are you consolidated with? Which type of repayment plan are you consolidated with? Consolidation lenders offer three types of repayment plans -- standard (your payment is an amount that will pay off the loan in 10 years), extended (it will pay off the loan in a longer period -- up to somewhere around 30 years -- on a sliding scale depending on how much you owe), and graduated (your payments are lower in the initial years and then gradually get bigger as time goes on under the assumption that you get better paying jobs as time goes on). There's also income contingent or income sensitive (depending on whether you have a FFEL lender or Direct as your consolidation lender). Direct offers income contingent where your payment is completely based on your income (they get your tax returns every year and adjust your payment accordingly). If, after 25 years you haven't paid off the loan, the remaining amount will be forgiven and you pay taxes on the forgiven amount. FFEL lenders offer income sensitive payment options, which is similar, but it's less forgiving in that they don't offer the forgiveness option, so you eventually have to pay it off. Some FFEL lenders may also offer some other options, but that's the general pattern. If your $500/month payment is under the standard payment plan, you may want to check with your lender to look at other options.

 

Hope this helps! Good luck!

[f0rbidden]

Thanks Ziggy!

It does help.

 

My loan is with Wells Fargo, and it's on the extended repay plan - I will contact them when it gets closer to Sept to see what other options will help - maybe just the graduated plan you mentioned will do the trick!