Student Loan interest rates questions

[BubbaPuck]

I have about $50,000 in federal loans. they are being deferred until this August and I could probably defer another year. The problem is my monthly payments now would be $700 a month. I plan on consolidating them with Direct Loans sometime in the next year or so so I can get my DTI lower to get approved for an FHA loan.

 

Basically while trying to pay down all of my other debt and save for a house, I cannot afford the student loans. I have heard the student loan interest rates are going to go up over the next year. Does anyone know if this is true? Should I consolidate now to lock in the current rates and ask Direct Loans for an immediate deferrment (if this is even allowed). What are the current student loan interest rates?

 

Thanks... Bubba

[LynnInMN]

I have about $50,000 in federal loans. they are being deferred until this August and I could probably defer another year. The problem is my monthly payments now would be $700 a month. I plan on consolidating them with Direct Loans sometime in the next year or so so I can get my DTI lower to get approved for an FHA loan.

 

Basically while trying to pay down all of my other debt and save for a house, I cannot afford the student loans. I have heard the student loan interest rates are going to go up over the next year. Does anyone know if this is true? Should I consolidate now to lock in the current rates and ask Direct Loans for an immediate deferrment (if this is even allowed). What are the current student loan interest rates?

 

Thanks... Bubba

 

 

Under what grounds for deferment would you be eligible for? Paying other bills and saving for a house purchase is not exactly economic hardship.

 

Student loan rates could go up or down...either way your consolidated interest rate will be a weighted average of what you have now.

 

How many of these loans are unsub? You do realize that your interest accrues on unsub loans during deferment periods.

 

Bottom line is your student loans are going to be with you for a long time and the sooner you start paying them, the better your DTI will be.

[financeguy184]

Bubba, I expect all interest rates to go up due to the inflation and recession in the economy. If you can possibly get these loans paid off ASAP, you will probably save a lot of money in the long run. I know this is easier said than done. I had a professor at FSU who announced that he had JUST made his last payment on his student loans (and he was in his 50s). I expect it to get worse in time. So be sure to get a good, well paying job to make that education worthwhile, and put what you can afford back into paying off those loans.

[BubbaPuck]

Under what grounds for deferment would you be eligible for? Paying other bills and saving for a house purchase is not exactly economic hardship. Sorry... I guess this came out wrong. I am struggling to make ends meet when my monthly student loan bill is $700. Direct Loans can get me down to $400 which is more manageable. But I dont want to pay until I absoultely have to. During this time I am saving money for future use... only $50-$100 a month. Hardly the $700 being deferred.

 

Student loan rates could go up or down...either way your consolidated interest rate will be a weighted average of what you have now. I did not know that. The median interest rate is about 8%.

 

How many of these loans are unsub? You do realize that your interest accrues on unsub loans during deferment periods. I have 12 loans, 7 sub, 5 unsub. I do know about interest accruing on unsub loans.

 

Bottom line is your student loans are going to be with you for a long time and the sooner you start paying them, the better your DTI will be. I do know that. I was hoping to find the best way to get the DTI as low as posible.

 

Thanks for the advice Lynn... you've always been a great help!!! I apreciate it!

Edited May 30, 2008 by BubbaPuck

[BubbaPuck]

Bubba, I expect all interest rates to go up due to the inflation and recession in the economy. If you can possibly get these loans paid off ASAP, you will probably save a lot of money in the long run. I know this is easier said than done. I had a professor at FSU who announced that he had JUST made his last payment on his student loans (and he was in his 50s). I expect it to get worse in time. So be sure to get a good, well paying job to make that education worthwhile, and put what you can afford back into paying off those loans.

 

Thanks financeguy! Ya, I will be stuck with them for a while. Unless I win the lottery, I am sunk. I am a single income family. I have a pretty good paying career in IT now so I should be able to make ends meet. I'll make sure I get a fixed interest consolidated loan so it will get easier as the years go buy and my wife and I get older. I guess my consildated loans will be an average of my current student loans so the benefits of refinancing now for a lower interest rate wont help me.

 

Go Seminoles!