Friday, August 12, 2011
I owe 200 k in student loans and make 40 k, will 50 bucks a month keep me from default in 2009?
I owe 200 k in student loans and make 40 k, will 50 bucks a month keep me from default in 2009?
I understand that a few years ago, if you paid at least 50 a month you would be current and not go into default. However, I'm being asked to dish out $2000 a month (yea I took out extra money for the cars, girls, and parties I'm human just like you) but I can't dish out 2000 a month if i want a condo, wife and kids (American nightmare). So do I move to colombia and become a farmer, or do I pay 50 a month and expect to stay current even with late fees? True honest answers from experienced debtors would be appreciated...anyone have any advice as to how they would go about making 2000 a month and owing 2000 a month in student loans alone... second job sounds good but I wasn't born to work 70 hours a week just to pay "the man" and who said I didn't want to live like a college student the rest of my life? No I am not going to live with my mom Im 23. I guess I'll be joining the military...
Financial Aid - 3 Answers
Random Answers, Critics, Comments, Opinions :
1 :
$50 LOL, I owe $9500 and they want $137.
2 :
Fifty dollars a month will not keep you out of default with a debt of 200K and this has never been the case that I am aware of. Federal loans sometimes will advertise a "minimum 50 dollar payment" but if you read more in depth it is to inform you that this is the minimum payment no matter how LITTLE you borrow, not how much. Example: If you just borrow 1,500 total in student loans your minimum payment would be 50 dollars when you graduate. (This is about the same payment as someone who borrowed as much as 5,000 total). Besides, with that much of a debt, I'm sure you have private student loans as well, and those payments and terms are a lot different that the federal loan terms. (variable interest rates - and payments, prepayment penalties, 30 year payment term instead of 10). My advise is to put off the American nightmare for a while and move back in with the parents, grandparents, sibling, cousin, etc. to cut your expenses. Do that..... AND go out and get a second job, 40 hours a week isn't meeting your needs so you need to step it up. 50 dollars a month will not keep you out of defalut and if you don't do something quickly its going to get a lot worse once you are into default. An extra 20 hours on the weekends or in the evening isn't going to kill you. The moral of this story is if you live like a professional when you are a college student (cars, girls, parities...) you will live like a college student when you graduate. You might want to inform those who are your cosigners for these loans you are having problems paying, they will be the ones the most motivated to put you in their basement or help you find that second job.
3 :
The person above me is right, you need to cut your expenses. Either move in with mom or get a couple roommates. If you pay just $50, the interest accrued each month will be more than what you're paying, so the total amount you owe will actually go up each month. You can never get rid of a student loan except by paying it off. Bankruptcy won't get rid of them. So the best thing to do is pay it off as fast as you can NOW, before the amount you owe gets even higher. Look at this page. http://www.ed.gov/offices/OSFAP/DirectLoan/RepayCalc/dlentry1.html If you put in $200,000, you can see that if you pay the $2000 a month you will pay a total of $276,000 back. But if you use the extended plan, which is still $1300 a month, you will pay back $416,000. Now imagine the difference it will make if you only pay $50 instead of $1300. And this is on government loan interest rates. If you had private loans, the interest rate will be even higher and add up faster. If you make some serious sacrifices for a few years, you can get this loan under control. If you ignore it, it will just get worse. It sucks that you made the mistake of not realizing how much you'd have to pay back, and now you're paying for it, but you really do have to pay it off, and the faster the better.
4 :
Jesus Christ, that's a lot of money. I'm going to assume that some of that is from private loans because there's no way you could get into that much debt from a Federal loan. Cut your expenses and get a second job. A condo might not be the best bet for someone making only $40,000 a year. Get a regular apartment, even if it is crappy. It'll free up some of your cash to keep you current because $50 isn't going to cut it. Try to find any job you can on the weekends because money is money. Look in bars or restaurants where you can make a lot in tips especially on weekends and holiday breaks. If you can't manage to stay current, they will take out the $2,000 straight from your paycheck before you even see it or have time to miss it. And if it comes to it, you can say bye-bye to your income tax returns because you won't get those until they are satisfied. Try writing a letter to the people you owe. If you can prove that you are currently facing hardship, they might change the minimum payments or forgive you for a few months.
5 :
Do not just pay $50 a month. The "american nightmare" will be put off a heck of a lot longer because your credit will be effected and you wont be able to make any decent purchases. And yes, you may be human, but if you were going to be that much in debt, I think you should have thought about how much you were taking out! Was it an expensive college and the college costs are most of the $200k in debt? Or was it a cheap college and you were just taking out crazy extra money? Either way, thats a heck of a lot of debt unless you are a doctor or something! Call your loan companies and see what they can do for you. Some offer a repayment method of up to 30 years (if not, they definitely offer a 20 year repayment). Your payments will be lower, but you will pay them back longer. Yes, the payments will still be ovver $1000, but thats the beauty of graduating college and growing up, you HAVE to pay back what you borrowed. Loans arent free money unfortunately, and you will have to pay them back in increments of more than $50 a month
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