Paying student loans

[starry_solo]

I was just going to suggest this. I also work in a field where the remainder will be forgiven after 10 years. Even those who don't work in such a field (govt or nonprofit) can have their loans forgiven after 25 years (I think). I think this is a great choice for people with big student loans, especially if they work for schools etc.

Don't you still have to make regular payments for this to happen? I mean, you can't not make payments for 10-25 years and then have the full loan & interest forgiven, right?

 

[crisi]

Don't you still have to make regular payments for this to happen? I mean, you can't not make payments for 10-25 years and then have the full loan & interest forgiven, right?

I don't think that is true. I know that if you don't pay your federal student loans they will reduce your social security payment. http://finance.yahoo.com/retirement...d-loans-may-haunt-seniors?mod=retire-planning

 

[burnurcomputer]

Op: Everyone has gifts that they were given. Talents that you have can reap you $.

A few small ideas for you

1) Take what ever you went to school for and call your local schools to see if you can get on a list to offer your services to students in your studied field.

2) Crafty at all? Make what you know and make some dough! If you CD your child, you might have a product that you can sell for a reasonable cost and/or make with recycled products.

3) A friend of mine now SAH....mostly. She worked in housekeeping while earing her degree and after leaving her job has turned it into a small legal business. She works 2-3 days a week, 2-3 houses a day at $25 an hour. She pays a local Mom (my ex husbands wife actually!) a small fee for the time and they both benefit, as well as the children. The kids get play time, my friend can do some work, and my ex's wife can get a few more $ for their household

Have a nice evening!

 

[Free4Life11]

Don't you still have to make regular payments for this to happen? I mean, you can't not make payments for 10-25 years and then have the full loan & interest forgiven, right?

If you are on the Income Based Repayment plan, your monthly payments are based on your household size, AGI, and the poverty limit, NOT the amount of your loan. I believe that if you are at or below the poverty level your monthly payment is $0 and that counts towards your the 25 years of payments. Periods of forbearance and deferment do NOT count towards the 25 year.

If you remain on this plan for 25 years and still have a balance, it will be forgiven, but that forgiveness will be considered taxable income.

I tried the calculator, but my federal loan balance is about $30,000, so unless I was living in poverty for the next two and a half decades, my loan would be paid in full well before the 25 years is up. If you have a high loan balance, but a low paying job you can benefit from this plan.

 

[tasha99]

If you are on the Income Based Repayment plan, your monthly payments are based on your household size, AGI, and the poverty limit, NOT the amount of your loan. I believe that if you are at or below the poverty level your monthly payment is $0 and that counts towards your the 25 years of payments. Periods of forbearance and deferment do NOT count towards the 25 year.

If you remain on this plan for 25 years and still have a balance, it will be forgiven, but that forgiveness will be considered taxable income.

I tried the calculator, but my federal loan balance is about $30,000, so unless I was living in poverty for the next two and a half decades, my loan would be paid in full well before the 25 years is up. If you have a high loan balance, but a low paying job you can benefit from this plan.

Forgiveness isn't taxable for certain programs, including public service, teacher, law, and public health programs. Of course, you have to be working to qualify for those programs so there would always be some sort of monthly payment. They can be a great deal though. In my case, my starting payments will be under $300 (vs. over $1000.) I would much rather join a program like that than take a second job. These programs don't apply to everyone, but they're certainly worth looking into.

http://www.finaid.org/loans/forgivenesstaxability.phtml

 

[DawnM]

How much is your local CC?

Ours is $1,600 per year for tuition. I think that is completely doable for most people.

Our local 4 year college is $5,000 for tuition.

Yes, I do realize there are books and fees on top of that, but I still think it is quite reasonable considering that most private school Kindergartens are more than $5,000 per year!

Now, the local school may not have the degree you need, but for many it is a very good option.

Dawn

We are entering into an intergenerational indentured servitude for college. The reduction in purchasing power for middle class incomes plus the inflationary rate of college tuition (the cost disease of services - for anyone interested in economic theory) plus the "need" to have a college education for many jobs plus the scaling back of government support for education is going to create a crisis. Back before WWI, only a privileged few went to college, and it wasn't needed for many careers. Those careers it was needed for frequently had shorter specialized schools - a two year "teachers program." MOST people didn't need an education beyond eighth grade.

That started changing with the rise of the middle class during the 20s, and by the end of WWII, the GI bill made it possible for tens of thousands of young men to get college educations who would have never gotten it before - those educations were out of reach for their working class parents without a LOT of sacrifice.

My Dad is a college student of the 60s - when it was possible to live at home, hold a part time job and pay for school. There aren't many states where even a community college student could pay for school with part time wages.

By the time I went to school - in the 80s, it was pretty hard to pull that off - it took either your parents help, or going part time, or financial aid. And financial aid was already a lot of loans (where ten years earlier, it had been a lot more grants). But I had a lot of friends whose parents said "I paid for it, you can too" - not realizing how much more difficult that had become. (I was lucky, my Dad said "it was HARD to work 20 hours a week at the pizza place and carry a full load, I don't want my daughters to do that.")

And now - a generation later - its become that much harder. People get married and have kids and carry between them a mortgage worth of student loans (more if either or both got graduate degrees). Its really difficult to save for your kids to confront the NEXT increase when a significant portion of your income is spent paying off your own education.

I think the crisis will create a bubble and the bubble will burst - and you'll be back to the period around 1920. Fewer people getting traditional college educations, smaller and fewer colleges. But if it bursts, people might start figuring out a way to get people educations for much less money.

 

[crisi]

How much is your local CC?

Ours is $1,600 per year for tuition. I think that is completely doable for most people.

Our local 4 year college is $5,000 for tuition.

Yes, I do realize there are books and fees on top of that, but I still think it is quite reasonable considering that most private school Kindergartens are more than $5,000 per year!

Now, the local school may not have the degree you need, but for many it is a very good option.

Dawn

$6-8k a year full time for three trimesters (no summer). And going up. Colleges within the State Colleges and University Systems (all schools except the University of Minnesota run by the state) have the same base tuition - some programs are more expensive).

I think its pretty reasonable - IF your parents saved. If you are doing it at 18 without help, $6k a year + books on a part time job isn't reasonable.

 

[tlbwriter]

I would watch a little person or so but right now there is no one around me that I can watch!

Just saying that because I choose to raise my girls instead of having someone else do it for me doesn't mean that I'm not working.

Given this attitude, shouldn't your earlier post say "I would raise someone else's little person but right now there is no one around me who is willing to let me raise their child?"

Anyway, as others pointed, you seem to be asking how you can change nothing and yet still pay these loans, and the answer is "you can't." It probably would have been a good idea not to take out loans for a degree that you don't plan to use, but you can't go back in time and change that. It probably would have been a good idea to put that gift money toward your debt instead of spending it on "budget" vacations, but you can't go back in time and change that. You have to make the loans a priority the same way you've made vacations a priority. You have to be willing to give up something else.

 

[disykat]

How much is your local CC?

Ours is $1,600 per year for tuition. I think that is completely doable for most people.

Our local 4 year college is $5,000 for tuition.

Yes, I do realize there are books and fees on top of that, but I still think it is quite reasonable considering that most private school Kindergartens are more than $5,000 per year!

Now, the local school may not have the degree you need, but for many it is a very good option.

Dawn

Wow - our community college tuition is $4500 a year. State schools (if you leave near one) run about $10K tuition only for residents.

 

[leahjade]

Just saying that because I choose to raise my girls instead of having someone else do it for me doesn't mean that I'm not working

I raised my kids myself too but still paid my debts! You can work part-time when your husband is home or do a babysit swap with a friend a day or two a week. It doesn't sound like you're trying too hard to make some extra income.

 

[DawnM]

Hmmm....well, my friend in Seattle's son is going to CC for around $2,500 per year so not sure why yours is so much higher.

UW is around $8K for 15 credit hours per quarter, which is about average.

I went to college in Seattle but that was many, many moons ago.

Dawn

Wow - our community college tuition is $4500 a year. State schools (if you leave near one) run about $10K tuition only for residents.

 

[Robinrs]

Wow - our community college tuition is $4500 a year. State schools (if you leave near one) run about $10K tuition only for residents.

Which CC is this?

 

[buckirj1]

I just wanted to say "thank you" to OP and all responders, for this cautionary tale. My DS will be headed off to college soon, and, because of this, I've sat him down and explained to him the *long term* consequences of college loan debt, for both him and his potential future wife. He is one of those people who would like to have a SAHM for a wife, and so they are going to need to take the long term effects of student loan debt into account.

Good luck OP!

Terri

Yes, this is exactly the way I see it...as a cautionary tale. This should be required reading for middle- and high-school students. The part I truly don't understand is why people would choose to have children in the face of such debt.

 

[allison443]

Wow - our community college tuition is $4500 a year. State schools (if you leave near one) run about $10K tuition only for residents.

Our community college is about the same as yours. The nearest state school is $12K tuition per year. (NJ).

 

[disykat]

Hmmm....well, my friend in Seattle's son is going to CC for around $2,500 per year so not sure why yours is so much higher.

UW is around $8K for 15 credit hours per quarter, which is about average.

I went to college in Seattle but that was many, many moons ago.

Dawn

Actually, if you want to debate, the UW is $3,249 a quarter for a full time student (between 12 and 18 credits) not including fees. So $9747 for 3 quarters, not including fees. I think "around 10K" describes it pretty acurately. Not sure where you're getting your numbers. Since I have a child there right now, I'd love to pay 2K less.

For community college, I did overestimate assuming the student goes all 4 quarters. Most cc students I know do. I did the math again, assuming only 3quarters with less than 16 credits a quarter and got $3672. I did not look up any Seattle community colleges, only my own.

 

[DawnM]

From their website.

Anyway, we do have $10k tuition state schools here as well, and that is fine if my kids want that, but the cheaper one is $5,000 this year.

Dawn

Actually, if you want to debate, the UW is $3,249 a quarter for a full time student (between 12 and 18 credits) not including fees. So $9747 for 3 quarters, not including fees. I think "around 10K" describes it pretty acurately. Not sure where you're getting your numbers. I'd love to pay 2K less.

For community college, I did overestimate assuming the student goes all 4 quarters. Most cc students I know do. I did the math again, assuming only 3quarters with less than 16 credits a quarter and got $3672. I did not look up any Seattle community colleges, only my own.

 

[katie26]

Yes, this is exactly the way I see it...as a cautionary tale. This should be required reading for middle- and high-school students. The part I truly don't understand is why people would choose to have children in the face of such debt.

This is why I didn't have children until after I paid off my student loans. They were my loans and it my responsibility to pay on them. I couldn't use raising children as an excuse to shirk my financial responsibility.

I genuinely cannot believe that posters here are saying that people shouldn't have children if they have student loan debt. That is completely insane to me. My parents were in debt when I was born and continued to be in debt through my childhood. They didn't get out of debt until they were both past their child-bearing years. I am very, very glad they didn't listen to you and that they decided to bring me into the world.

My student loan debt is in the six figures. I'm making timely payments under an income-based repayment schedule and I'm on track to have my balance forgiven within the next ten years, but if I chose to delay having children until I was completely out of debt, I would miss out on my chance to have children entirely, as I expect to be paying off these loans throughout my fertile years. To say that someone shouldn't have kids because they owe a few hundred dollars a month to a bank is just... beyond words.

Yes, student loan debt is awful. Yes, we all need to work on being debt-free as swiftly as humanly possible. But... emphasis on humanly. It's one thing to go without cable or vacations, it's another thing to go without *children.*

 

[KennesawNemo]

I genuinely cannot believe that posters here are saying that people shouldn't have children if they have student loan debt. That is completely insane to me. My parents were in debt when I was born and continued to be in debt through my childhood. They didn't get out of debt until they were both past their child-bearing years. I am very, very glad they didn't listen to you and that they decided to bring me into the world.

My student loan debt is in the six figures. I'm making timely payments under an income-based repayment schedule and I'm on track to have my balance forgiven within the next ten years, but if I chose to delay having children until I was completely out of debt, I would miss out on my chance to have children entirely, as I expect to be paying off these loans throughout my fertile years. To say that someone shouldn't have kids because they owe a few hundred dollars a month to a bank is just... beyond words.

Yes, student loan debt is awful. Yes, we all need to work on being debt-free as swiftly as humanly possible. But... emphasis on humanly. It's one thing to go without cable or vacations, it's another thing to go without *children.*

It's really case by case.

You and your parents are at least making payments, are you?

Waiting couple years doesn't mean waiting until you pass your child bearing age. It's called planning.

 

[Marionnette]

I genuinely cannot believe that posters here are saying that people shouldn't have children if they have student loan debt. That is completely insane to me. My parents were in debt when I was born and continued to be in debt through my childhood. They didn't get out of debt until they were both past their child-bearing years. I am very, very glad they didn't listen to you and that they decided to bring me into the world.

My student loan debt is in the six figures. I'm making timely payments under an income-based repayment schedule and I'm on track to have my balance forgiven within the next ten years, but if I chose to delay having children until I was completely out of debt, I would miss out on my chance to have children entirely, as I expect to be paying off these loans throughout my fertile years. To say that someone shouldn't have kids because they owe a few hundred dollars a month to a bank is just... beyond words.

Yes, student loan debt is awful. Yes, we all need to work on being debt-free as swiftly as humanly possible. But... emphasis on humanly. It's one thing to go without cable or vacations, it's another thing to go without *children.*

I think that they were saying that it's best to delay childbearing until you can manage your debts without one income or else plan to go back to work after giving birth. I don't think that they meant to imply that only debt free people should reproduce.

But it looks like you have a plan to get rid of that debt. So kuddos to you and also to our government for finding a way to forgive student loan debts for certain segments of our society.

 

[katie26]

It's really case by case.

You and your parents are at least making payments, are you?

Waiting couple years doesn't mean waiting until you pass your child bearing age. It's called planning.

My parents are out of debt completely and have been for some time now. I am making on time payments on my student loans and have no consumer debt. But paying off $100K in student loans on my salary before I'm thirty five? Not gonna happen, even if I lived in a van down by the river and ate gruel and pigeons twice a day. Especially if I want to also be saving for retirement (I am) and building an emergency fund (I am).

Perhaps I misinterpreted the statements I quoted, but they both definitely sounded to me like "I don't understand why people would have children if they owed money on their student loans." It makes it sound like having some debt is equivalent to... well, living in a van down by the river. And it's not.

Student loan debt sucks, and I agree with the idea that we all need to make some sacrifices to pay it off as swiftly as possible, but having debt and children at the same time doesn't make you a bad person or an irresponsible parent.