Here is the situation:
I took out student loans for the entirety of college (3 Fulltime years, 3 part time years). The loans I took out originally amounted to around $103,000. Had payments deferred while in school. Repayment begins next spring, and the total of all loans is around $142,000 with an estimated monthly payment of $1362. Our monthly income is $2600. Rent alone is $850...that leaves us with $750 a month for utilities, food, gas, and health insurance (we run a small business and have to get individual insurance...at $500 a month). We have a 1 year old son, a dog, and 2 cats...so this house is the smallest we can stand to go to. 2 months ago we sold our old (much larger)house to save us $500 a month so that we could pay off other debts (which we should be able to do in the next year). I do regret the student loans, since my degree is in a useless field which I cannot get work in unless i go on to get my masters (Classical Archaeology). I also used the loans for living expenses most of those first 3 years (another dumb idea). I guess I am another "if I could do it over again" story.

Now you know the situation, here is my question. What can I do? I can't afford their payments. Its not a question of won't...its can't. They are all private loans, so I don't know what i can do. Every deferment/forbearance I get will just make it harder to pay back afterwards. I checked on Income sensitive repayment (actually, I don't even know if they offer it for their private loans...the info I found was on federal loans), but after figuring up the minimum payment which for me would be the monthly interest amount...that was still $1183!! (if it were based on our income the total would have been less than $200...completely doable) They are charging me $1183 a month in interest. No wonder the loan amount skyrocketed while I was in school.

The only other thing we can do to reduce our monthly spending is to go to my FIL and ask for a rent reduction (luckily its his house). But that would at most be an extra $200 or so. Our business already takes up all our time, so a part time job would actually hurt our full time job. We are working on building it up, so within 5-10 years, we may be able to make the payments they are asking (fingers crossed), but there are no guarantees about that.

Please, suggest away. I know I did a very dumb thing in taking out way more money that I needed for school specifically...but its done and I can't change that. I need to figure out how to deal with it now.

You have to contact each individual lender/servicer to intiate forbearance or at least find out their policy.
Consolidation is an option, but wouldn't offer much relief.
Could you return to school p/t? Putting the loans back into deferment and making smaller payments for a few years until the business takes off?

Btw, personally this was also a big concern as my degrees are in social policy and a really specific field of history. I found TAing at a community college to be a big help, it was something I could do p/t, while still working and going to school, it earned an extra few thousand per year. If you have any extra time, that or substitute teaching can add several thousand per year without taking huge amounts of time from other responsibilities.

All in private loans?? Yikes!! No staffords at all??

Private loans do not offer many reduced payment options and those that do are very limited. There is no income contingent repayment like the feds offer. Somehow you are going to need to increase your income now as your lender will not wait 5-10 years for their payments. With your income right now, you will end up defaulting and your lender will end up suing you, particularly with that high a balance. Harsh yes but it is the reality of private loans.

Yes...all in private loans. I was hoping to be able to hold them off for a few more years until the business gets going well enough we can handle this. The way I was planning to do this was to stay in school...however, AES has informed me that I only got 4 years worth of that total and I have used it all up on 2 of the loans already. I didn't know that there was a limit on how many years of in school deferment I could have, but apparently it was in the itty bitty print somewhere (I am actually still trying to find where it says that on my promissory). I have no problem staying in school part time for a few more years, in fact I will be doing so with or without deferment because I NEED those classes to take on a better job on down the road.

There is no income contingent repayment with private loans? None at all? How is it that they can get away with being government backed in the sense that they cannot be discharged in bankruptcy, yet they have the right to sue you when there is no way to come up with the payments? (I looked into bankruptcy but since these loans are the only ones i really NEED to discharge in order to make it by, it seemed like a huge waste of time)

Private loans were not designed to finance an entire educatioal career....they are designed to bridge the gap between federal loans/grants and the cost of attendance. They come with risks...higher interest is the major factor. Did you have a cosigner for these loans??

There is no government backing so they do not have to follow paymet/defermet priveleges of federal lending. Only the DOE offers income contigent repayment....even FFELP loans only offer income sensitive. Private loans are a different animal when it comes to lending. How may lenders out there would offer a loan with no payments for 4 years, with no collateral??? Not many, if any. Without private lending, a lot of students would not be able to complete their education with the huge rising costs of going to school. If these lenders pulled out because student bankruptcies, a lot of students would not be able to complete their schooling.

It is pretty common that private loans can only be deferred for the period/school they were borrowed for. 4/5 years is the norm. No continued deferment for part time enrollment./

You will not be able to hold them off. They will default you within 9 months of your full payment not being made. Simple as that. And again, especially with your high balance, you will be at the top of their list. They will sue you faster than someone with a $25k balance.

My grandmother co-signed for the first year of school, and for the rest my husband is the cosigner.

I am pretty scared of all of this now. Its not that I don't want to pay off my debt...its just that I can't pay what they are asking. I would be willing to pay a smaller payment for a longer term...but in all my research I have not been able to find any way to do that either. I didn't actually want to declare bankruptcy, but like I said...I looked into it to see if there could be any relief in the payments that way. When you say they will sue...what exactly will that be like? I hope I don't sound like an idiot, but I really know nothing about legal issues and the court system. I am trying to find if there is anything i can be doing to avoid all of this, or at least prepare myself and my family for what is about to come?

Actually filling BK will do nothing, even with a chapter 13. Student loans generally are not included in the 3-5 year plan so when you emerge, the loan emerges with all the accrued interest updated. And during the chapter 13, they will persue your grandmother on the loans that she cosigned and your husband as well unless he includes his debts in the bankruptcy. And when it comes to filig suit, they will file against all parties. Once a judgement is rendered, they can go thru the courts to seize bank accounts and lien property.

What this comes down to is that you have to increase your income. Obviously being self employed is not going cut it. At $2600/month for the both of you works out to $7.50/hour based on a 40 hour work week. My local McD's pays more than that. Once you default, they will accelerate your loans, collection costs will be charged and you will be in a bigger mess than you are now.

Are you in a larger city?? Both Fed Ex and UPS offer overnight/early morning employment that includes family coverage healthcare. My old daycare lady's husband is also self employed and this is how they deal with the health insurance issue. He earns about $800 a month working the job plus the benefit of free health/dental insurance.

I feel your pain OP...my wife has about 90k in student loans.

would she not be able to refi them with the DOE? that way she can get income contingent

fla-tan

oh never mind. I just remember my DW had AES and we got hers consolidated with the DOE and had no problems but i cant recall whether they were public or private

DOE only consolidates federal loans so they could not have been private.