Need Student Loan Help!!! Unique situation...

Paying for College
1

<p>I have read many threads and websites about student loans, but my situation is so unique that I cannot determine what the best option for me would be. As I am certainly not an expert, any advice from a knowledgable person would be very much appreciated!</p>

<p>QUICK SUMMARY OF MY SITUATION:</p>

<p>Let me start by admitting that I have made MANY poor financial and education choices throughout my college career that I am now paying for, and need to take full responsibility for. However, I would like to understand all my options.</p>

<p>After high school, I attended a very expensive college. I went for many years and did very poorly. I ended up being academically recessed from that school. After getting my personal life and educational goals in order, I enrolled in a local community college, did well and after a few semesters of good grades, earned admission into a four-year University. I graduated in April with my Bachelor's Degree. I worked hard and have earned admission into a few Masters programs. I am currently trying to organize my finances and need help. I am planning on enrolling in grad school, but still haven't heard back from every school, and may not make my decision for another month or so.</p>

<p>My undergraduate experience has left me with over $110k in student loans.</p>

<p>I have 6 private loans, Citiassist Loans through Citibank, that are unsubsidized and at a current balance of about $35,000. All but one are currently at a 7.25% interest rate (variable). Because I have graduated, I must start making monthly payments of about $350 starting on May 14. I am not sure if I can defer these loans during grad school, because I can't apply from deferment until I choose a school, and have proof of enrollment sent in by the school.</p>

<p>I have 3 private loans being serviced by American Educational Services, that are unsubsidized and at a current balance of about $29,000. One of the three can no longer be deferred or put into forbearance and payments of about $100 must start in June. The other two cannot be deferred any more after July, and can only be put into forbearance for a year, if they allow it. They are all between 5.5% and 7.0% interest rate (variable).</p>

<p>I have 5 stafford loans being serviced by Great Lakes Educational Services, that are subsidized and at a current balance of about $14,000. All five of these loans are at a 2.36% interest rate and payments of $50 each ($250 total) must begin on June 5. </p>

<p>I have 10 Federal Direct Loans being serviced by Federal Loan Servicing, most of which are unsubsidized, and at a current balance of about $35,000. The bulk of the loans are at a 6.0% or 6.8% interest rate. Payments of about $325 must start on May 14. </p>

<p>My questions mainly involve what the best options for me would be. I won't know what grad school I am attending until June. So I can't apply for deferment. Some of the loans don't have any deferment time left. Should I consolidate the private or federal loans? Even though I'm about to take out more loans for grad school?</p>

<p>Any advice would help. Thank you in advance.</p>

2

<p>If I may, my advice to you:
DON’T TAKE OUT ANYMORE LOANS.
This is a really dangerous and serious situation you have on your hands right now. You are currently 110k in debt (quadruple the national average) and you want to add more to it for your masters. You’ve mentioned you’ve made poor judgements on your financial and educational situations and I respect you for acknowledging this but I advise you to learn from them. Taking out more loans and deferring your old ones will not help your situation. Paying them off as quickly as possible will. You’ve already got your bachelors, why not take on a full time job for a year or two in your field of study and then come back to your masters? You don’t have to rush, this will only worsen the situation you’re in. At least pay half of them off before even considering going back to school. I highly suggest you consider my suggestion or you may be looking at a lifetime of loans, and no one wants this. I hope this helps</p>

3

<p>Thank you for your advice. One of my mistakes was not consulting advice from financial aid experts at any time during my educational career. I simply just kept trying to cover the wound with more loans. Hearing this advice from someone else means a lot. Thank you.</p>

4

<p>Here’s another situation, though… what if I am offered a Graduate Assistantship at one of the schools that covers my tuition? What would your advice be in that scenario?</p>

5

<p>If your assistantship is enough to cover all of your costs, including that roughly $450 in no-longer-deferrable loan payments, then by all means go to grad school. If it only covers part of your costs, and the assistantship requires so much time that you can’t get another job to cover the rest of your costs, then don’t. </p>

<p>Really, your best option is to get a job (or two or three) and work like a demon to get this debt paid down so you can go on with your life.</p>

6

<p>Even with an assistantship that covers tuition you will need to support yourself in terms of rent and food. You will also likely need to make payments on the private loans. </p>

<p>If you are in school wil you be able to defer payment on the federal loans? Regardless, they may still accrue interest. </p>

<p>I was fortunate enough to have no undergraduate debt. In graduate school I had full tuition covered, plus a stipend. I still had a small number of loans to cover some expenses (although some of my peers in graduate school did not… particularly if they had parental support for graduate school, which I did not, since my folks GENEROUSLY covered my undergrad, and I was 6 years out of undergrad before attending grad school.)</p>

<p>My masters degree was a “terminal” masters… meaning for a tenured track college teaching position I did not need a doctoral degree… is the masters degree program you are looking at the “end of the line” educationally for you?</p>

<p>I am now a college teacher, and I have former students who working to pay off their undergraduate loans before going to graduate school. Private loan debt is complicated because I do not believe it cannot be deferred while you are in graduate school, not can it be consolidated. Unsubsidized Student loans may also accrue interest while you are in graduate school… worth checking out.</p>

<p>You may want to work for a few years to pay down debt before accruing more for graduate school.</p>

7

<p>Here’s hoping the masters you’ve chosen typically results in well paying jobs.</p>

8

<p>That is my question, related to Waverly’s comment. What sort of masters program are you considering? You can’t afford a luxury degree that does not have strong prospects of employment and a good salary even if the tuition is free. You still have to pay on certain loans and you have to live too, so free tuition for a program that will take away from your time is not helpful at all. If you are going for a Masters in Accounting or health services that pretty much guarantee you’ll be better able to pay your loans, it’s one thing, but you can’t afford to take more loans or accrue more interest on the loans you have. The interest rates are killers. You have to face the music sometime.</p>

<p>If, and only IF, this course of study will definitely enhance your career and salary prospects drastically, then talk to one of the college financial aid consultants and see what consolidation options are available and what jobs and other loans are available for their programs. With a bad credit report from defaulted loans, you may not be able to find a job when you get out in certain career fields so you should not be ignoring these loans regardless of what your field of study might be for this masters.</p>

9

<p>Thank you all for taking the time to respond. It honestly helps put things in perspective, and has helped point me in the directions I need to go to get the debt paid down.</p>

10

<p>Mmckenna, you are not in such a unique situation. I know several in similar situations. Some who have gone on to graduate school in part to escape the loan repayments for a while. But you gotta pay the piper some time. If you are getting a master’s or PHD even in a field where job prospects are poor, you are just going to owe more money and still not be able to pay it back. You’ll wreck your credit history, and damage your job, house buying and financial prospects even more. This is a huge problem. Also, who co signed those loans on your behalf? Once you run out of deferrals on them, the lenders are going to go after your co signer and dunn their credit reports too. They are equally responsible for those loans and may be stuck with them if anything should happen to you. As it is, they are hampered with those amounts reported as being outstanding on their credit history.</p>

11

<p>Time now to work all you can doing whatever you can. Pay down the debt, then look into grad school. Don’t know if you have kids or a mortgage, but once you get those you will not have time to work 2-3 jobs. Now is the time to get everything under control or you will be sorry later. I have a relative who cannot afford her lifestyle, which is not close to great (tiny condo, high mileage car, long commute) but the truth is she cannot afford the life she wants, and with a mortgage and a baby doesn’t have time to earn the $ to pay down the debt that is holding her from living the life she wants. If she didn’t have debt she would be SO much happier. So don’t just put off paying it, you’ll make it worse.</p>