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Student Loans and the Stalling of Repayment until Next Semester
Stupid Mr Whoopsie Name
Registered User, ClubPA regular
Registered User, ClubPA regular
I'm at a loss here and hope someone has some experience they can relate to me.
Long story short, my financial aid for Spring Semester got fouled up and I was forced to take the semester off, but now my Private Student Loan wants me to start paying back.
I 'm already a month behind (because I didn't know it had gone back into repayment), with the payments being about $400 a month. I simply cannot afford that, and I have about 60 days before it defaults, but Fall Semester doesn't start until around September.
I called the loan up and all they can offer me is a six month "hardship" program where my payments are about $200 a month, but I cannot even afford that. I think I have all of $10 in my bank account right now, with no outside help--no friends or relatives that can assist.
I absolutely do not want this loan to default (especially because there is a co-signer), but I'm not entirely sure what I can do about it. Does anyone know if there's a way to escalate the situation where I can speak to someone that may actually be able to help, or what alternatives I could look into?
I'm at an absolute loss here.
Long story short, my financial aid for Spring Semester got fouled up and I was forced to take the semester off, but now my Private Student Loan wants me to start paying back.
I 'm already a month behind (because I didn't know it had gone back into repayment), with the payments being about $400 a month. I simply cannot afford that, and I have about 60 days before it defaults, but Fall Semester doesn't start until around September.
I called the loan up and all they can offer me is a six month "hardship" program where my payments are about $200 a month, but I cannot even afford that. I think I have all of $10 in my bank account right now, with no outside help--no friends or relatives that can assist.
I absolutely do not want this loan to default (especially because there is a co-signer), but I'm not entirely sure what I can do about it. Does anyone know if there's a way to escalate the situation where I can speak to someone that may actually be able to help, or what alternatives I could look into?
I'm at an absolute loss here.
Stupid Mr Whoopsie Name on
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I would call them back and be honest about your ability to pay and ask about all the available options.
Also, what kind of job are you holding down right now?
[edit] Depending on the terms of your loan, maybe being a part-time student will delay having to pay? You could nab a community college course as a quick alternative? Read the loan fine print is my main advice.
Currently, I have no job. I'm one of those artist types that lives from project to project, with the last one ending in April. I may have a teaching gig for the summer, and I know teachers usually get paid like superstars, I don't have any reason to think this job will.
I know being part-time is all it takes for my loan to be deferred, so maybe the CC option is the best one right now. Does the CC need to have some specific accreditation or the like for the loan to consider it square, or does just about *any* student status count?
Now, not to be too blunt, but you need a job. Any job. Right now. So I would very strongly suggest that you go to various temp agencies. Also, your college should have a career counselor that you can go to (and most likely a financial adviser as well). I would look into seeing them as soon as possible.
Next, look into assistance. You should be able to get food stamps which is about a $200 worth of food you won't have to buy a month (that coincides nicely with the minimum offer they gave you). It will only take one day to set that up. I've done it, and it's not as bad as the stigma makes it out to be. Make sure you call ahead to have the proper paperwork ready.
[edit] You can also donate plasma. This is not a lot of money (varies depending on your area) but something is better than flat broke.
I am going to look into the CC option first thing tomorrow, I suspect that may be my best course of action.
While there, you can even apply for Pell Grant and Stafford loans at the CC and then just bank the refund you're given. After books and course fees and everything, I usually got a check for somewhere around twenty-eight hundred bucks when checks came out- being that courses at CCs are much cheaper than ones at your regular college- so you can just go ahead and bank that money in preparation for your fall semester.
Most CCs have two summer semesters, so you might be aboe to make up for missing spring semester at your real college- or with a little work, come out ahead in terms of classwork.
I can has cheezburger, yes?
I'm in the same situation. I have $0 and Sallie Mae won't provide me with any more deferments or forebearances. I, basically, have 45 days to get a job before they report me to a credit agency.
I can offer you some advice, but I need more information first.
For me, I couldn't find work after graduation in 4 years from a private school. What I did, was applied for economic deferment, I believe. There is no reason they should not grant you that. The purpose of such deferment is for people who don't have money, which from what you described, is your situation. One loan company refused to grant it, so I continued to try other options, called a few times, until they granted it.
JaysonFour also has good advice - if you're suffering from this, for sure, other students from your college have as well. I would definitely utilize them as a resource and have them give you advice. They really should be able to guide you given your situation. Taking courses at community college is also a good option, as long as you make sure those classes transfer over.
PS. College Loan debt exceeds credit card debt in this country now. Hope it works out man! There is a way, it may just take a lot of work.
I don't know much about the process, I just know my wife did it and it made life easier.
Ask the financial aid office types.
I don't think this is true and I've definitely never seen any program that allows it, despite looking extensively at loan consolidation options. You can consolidate federal loans together, and if you're able to get a private loan you could consolidate private loans together but I don't think any lender is going to let you consolidate both private and federal loans under a federal program, because it means they have less say in your loan terms, which ultimately means less money for them.
Perhaps you're talking about consolidating both subsidized and unsubsidized federal loans together, which can be done.
The only way I can imagine any lender would allow consolidating both together is if you were consolidating them both into a private consolidation loan, which would most likely be a bad idea since you'd lose out on the benefits of the federal loans when they got paid off by the consolidation loan.
There's also a repayment plan option that starts at a very small percentage of your total loan (if I remember right) and increases as time passes. That may also be your cheapest option. Often with federal loans, they'll let you change your repayment plan whenever you want, which can help you to adjust it to your income.
Since your private loans are raping your ass, because that's why that number is so large, here's what is going to happen:
1) You can continue not paying them. They'll enter default and get sent to collections. This isn't your standard "oops didn't pay my $60 cable bill" collections. This is "This is Sallie Mae's sister company's collections department."
2) If you continue not paying them, you will get an offer to settle for a "reasonable amount." Reasonable is whatever you can talk them into. But, big but, you have to pay it on the spot with a debit or check.
3) If you fail to settle with them, they will issue a judgement and wage garnishment. This can be, I think at most, 25-30% of your wages, and for a maximum of 5 years and then it has to be written off. Obviously check with a lawyer on that one.
Judging by the fact that it's close to $400 I'm guessing you went to a private school and paid for almost the entirety of what the federal loans wouldn't cover with private loans. This is a common thing. It's exactly what I went through, except mine was $600 because fuck ITT Tech. This isn't such a big deal with colleges in general because they usually have financial aid and work assist departments that cover another majority if your student loan debt. So when you're in shock because your friends pay $200 a month and you're paying $200 + $400 private loan payments, that's why.
I am not a lawyer. You may absolutely want to talk to one. Debt consolidation if a thing, you may have luck with them talking to the loan company for you as they're just another set of ruthless assholes, but the thing is they want to get paid and are working for you.
What you can try:
Settlement:
1) Find out how much you owe in student loan debts currently.
2) Ask your parents or any family/friends to loan you a portion of that.
3a) Offer to pay back $100 a month, that is the absolute most you can afford, reiterate that over and over, explain that worst case scenario if they take you to court they will probably get less in a garnishment because you make nothing.
3) Offer to pay off your student loans with that money.
4) Pay back your family under terms you set aside for that.
5) I'm guessing your student loans total $32000 ish, offer to settle for $12-15,000.
6) A family loan for 12,000 at 5-10 years with no interest is easier to pay back than a private loan of $25,000 with, I'm guessing, 10-15% interest for 10 years. ($100-200 vs $300+ depending on how they compute interest)
Court/Garnishment:
1) Ignore it
2) enter collections and ruin your probably already bad credit rating
3) default and get a summons to court
4) establish that they had been unwilling to work with you, explain you're willing to have your wages garnished
5) take a wage garnishment
School:
1) Go back to school part time
2) Graduate and hope you get a job that pays you $40,000/yr.
Spending:
1) reign in Expenses
1a) get an economic forbearance or deferment
2) save money
Now, again, I'm not a lawyer but these are the possibilities I was running into a few months ago because I literally could not afford what was my rent payment on school loans. Try the last two before you attempt the first one after speaking with a lawyer or debt consolidation service.
It's shitty, you're going to ruin your credit (if you haven't already for late payments). Also, this is something amateurhour explained to me before I went through what I did: It isn't your fault and never feel bad about your money situation or not paying them.
Obviously take what I said into consideration, some or all of that may not apply. Check with a lawyer, etc etc etc. I'm offering support and advice that I went through and I am not trying to get you in trouble. I would advise against the wage garnishment because that's a super shitty way to resolve this. Don't even bother with bankruptcy in this case.
Also, if you haven't already, draw up your budget and see how you're spending money at the moment. You'll be surprised where you can pull $400 out of your ass a month.
As far as stalling repayment goes? I have no idea. I'm going to be in a similar boat soon (paying well over 400 a month, too
Check out my art! Buy some prints!
Sallie Mae offers forebearances AND deferments. With federal loans, I am using a little known option Obama created that allows payments to be based on your income. Since my income is $0, I pay $0 on my federal loans.
However, Sallie Mae fucked me over when they allowed me to use up my "economic hardship" option along with ALL of my forebearances. Basically, I would give them $50 and they would defer my payments for 3 months. The only problem is that while I was doing this, Sallie Mae also had me using my "economic hardship" time. When I ran out of forebearances, I ran out of my ability to use the "economic hardship," or lower payments option, at the same time. Suddenly, my payments doubled and I quickly ran out of money.
Make some money and pay this off. Look for a job that will pay more than that teaching gig. This teaching job doesnt sound like a full time thing. You should be able to find additional work.
You would have to work at McDonalds 20+ hours a week in California to meet the payments after taxes.
But if you have absolutely no job, yes, that is a better alternative. Something tells me he has a job but just can't afford to make the payment because of expenses (food, rent, electricity, gas, car, and insurance add up realllllly quickly) and while going to school can't afford the time to tack on an additional 20 hours.
However since he's not going to school this moment he probably can afford 5 hours a day at McDonalds, assuming they hire him, and he gets more than the federal minimum wage.
No, she had about half a dozen private loans since her school didn't participate in Direct Loans. All but one got consolidated into a single Federal Direct Loan. You might have to have graduated to pull it off.
Okay, but that's clearly some weird exception or a mistake. Right on the Federal Direct Loan site it says that private loans are ineligible for consolidation under that program.
http://loanconsolidation.ed.gov/borrower/bloans.html
Private student loans are pretty much designed to screw you over.
OP, you should definitely look into getting another job if possible, and at the same time you should call and be firm and realistic about the maximum payment you can afford right now and insist on working up the chain of customer service if they refuse to work with you. If you haven't already used it, most lenders do offer a forbearance. It's usually short term, and of course interest keeps accumulating, but it should be available to delay payments a few months at least until you're back in school.
Being a moderator for the Penny Arcade forums should leverage you into something better than fast food employee.
Right now the issue is stalling them until I get back into school this Fall, and until then I am not going to break myself working six jobs just to make minimum payments. The reason is because, while I may not have a high paying job at the moment, I am working on projects related to my field/degree that will be beneficial in the long run, even if they aren't paying now.
Alyce, thanks for that link! I don't know why I didn't already know about it!
There is worse than McDonalds.
Trust me.
What are you spending your money on now? Can you afford $50 a month? Go down to your credit union or bank and ask if you can't get a personal loan and explain the situation to the loan officer.
I just don't agree with this. You aren't the only person on the loan, you have a cosigner. If you were the only person on the loan then you are the one paying the consequences, so its entirely up to you. You are NOT the only one on the loan though, so I don't see how you can not pay it because you don't feel like it. You at least should talk to the cosigner and get their approval.
This is why I never cosign for anyone anymore. Cosigning for someone is saying that you trust that even though they have bad credit they are a standup person and will meet this obligation. It's not "well I got some projects I'm working on that are more important to me, so I'm going to ruin your credit and leave you with my debt burden".
You could work basically any fast food, customer service, or call center job for 20 hours a week or less to more than meet this obligation. There are tons of unskilled jobs throughout the country paying $8-12 an hours you could find. Whether thats fast food, wal mart, customer support calls, or manual labor.
Especially considering he'd probably need to do it when he's working his real job to get anywhere near the hours or payrate.
Every fast food, wal-mart, customer call center, and manual unskilled labor (non-union) job I have ever seen or applied for paid minimum wage, period. And you need more than 20 hours because you have to pay taxes. I mean if you look at gross pay, yeah it's pretty easy to make $400 a month.
If he can find a place that's hiring where he lives, if they give him more than 2 hours a day, if they're not being filled by college/high school kids during the summer months.
Pell Grant + Stafford loans should cover the cost easily, and give you a nice check to either use for the fall, or to give you something to use to shut up the private loan people for a few months.
But I would really just step back and ask myself if you really need that private loan again when you go back to school. Private school loans can be just plain nasty when it comes to repayment- I've heard horror stories about interest rates being jacked up, collection agencies phoning at all hours of the day and night after one missed payment... honestly, I'd try to make the private loan go away and pay it off if you can before they start playing games with you.
I can has cheezburger, yes?
I looked into the CC option and I've got about two or three week before classes start there. Regrettably, I don't think any of the credits will transfer over (I go to a private art school), but maybe they've gotten that sorted by now. I know it used to be a big deal where credits didn't transfer, but that was what I heard three or four years ago, who knows now. I'll look into whether any GenEds I take at CC will satisfy certain classes at my regular school.
I don't mean to rob you of your chance to soapbox about not being a co-signer to anyone, but you aren't addressing the OP and I feel if I don't say something now, bluntly, the thread will continue down the path of arguing about finding work. So let me make it clear: I'm still a student.
This isn't about "How do I repay my loans?" This is about, "How do I stall them until I get back into school in Fall?" I am an art student; I am an illustrator; I am working on projects that go towards my degree/career--not a fun hobby I think is more important than paying back loans. The amount of assumptions you make about me are staggering.
To everyone else who has been on point, I appreciate your experience and insight greatly. Thank you.
I could swear our paperwork said it just had to be like some X amount of hours a week to qualify for "enrolled" and you could postpone your loan payments a semester. Definitely check into that.
I can has cheezburger, yes?