Student Loan Help

[donald&daisy]

Hello,
I have finally made time to sit down and figure out what to do about my student loans. I have approx. 71k in loans (for undergrad and law school). I am currently unemployed (boo!) but I am working tirelessly on finding a job. I have a house and no other substantial payments to make (car is paid for, etc) so I'm not in danger of being homeless and starving and I have a small nest egg to help me pay my loans for at least 3-4 months and my parents are there if I need them.

My loans are mainly subsidized Stafford loan, and unsubsidized Stafford loans, with two Perkins thrown in. The unsubsidized Staffords have an interest rate of 1.8% and the unsub. ones have a 6.8% interest rate, and the Perkins loans are at 5%. I did a calculation on the Direct Loans program site that gave me a 5.5% rate for all of my loans together.

Basically I just need some advice. I think it makes sense to consolidate but I worry about whether I should include the loans that are at 1.8%? Also, are there other good sources for consolidation loans? And finally, does anyone know how I might go about requesting a forbearance since I am currently unemployed? I am scheduled to start making payments at the end of October/early November so I need to deal with this asap. Oh, and who should I talk to about this? I tried my family's accountant but he didn't have much experience with student loans, should I call my bank? Any advice is appreciated. Thanks!

 

[NYCDiane]

I'm sure you'd be able to get a forebearance. Call the loan companies and explain your situation. You can probably get a 6 month - 1 year forebearance depending on the situation. Call in about the forebearance after you can pay whatever you can pay on it (you said you have a 3-4 month nestegg that can cover it)

As for consolidation.... WHY would you want to consolidate a 1.8% loan to 5.5%???? DON'T DO IT!!! Leave those Stafford Loans alone and consolidate the Perkins loans to the lower amount. ONLY do this after you see if you can get a forebearance or not. If you get the forebearance, things could change and you may not need to consolidate.

Are you a lawyer now? Or are you waiting for the bar exam? If you're a lawyer now, why not open your own practice?? I know a couple of lawyers who work right out of their homes and they're doing well.

 

[donald&daisy]

Well, I think it does makes sense to consolidate the others that are at 6.8% interest b/c I can't afford to make those payments each month. The 4 loans that are at 1.8% I can make the monthly payments on those for a number of months. If I take out those 4 loans, Direct Loans gives me a rate of 6.625% which isn't much of an improvement but it does give me a monthly rate I can afford ($372 vs. $600).

I did pass the bar exam (thank goodness), however to be honest I don't feel comfortable opening my own practice.

 

[lspst8]

I don't really have any good advice, but I wanted to offer you congrats on passing the bar. I took the bar exam back in 2004, and I remember how stressful that whole experience was.

Not knowing what type of job you are looking for, I would recommended looking at attorney jobs with the federal government. I work for SSA, and the whole agency is planning to do a lot of hiring in the coming year. The fiscal year ends at the end of the month, so I would get on the USAjobs website. It is a SLOW process, but the jobs are nice and stable and you get to work normal hours!

I too would never in a million years open up my own practice, especially right out of law school. I know I didn't know anything practicle then

Just wanted to offer you some encouragement

 

[sksjasams]

You need to call your loan servicers (whoever sent you your payment schedules) and ask for an UNEMPLOYMENT DEFERMENT. You may even be able to apply for one online. The unemployment deferment is good for 6 months, and you are eligible for up to a total of 36 months. Once you are working fulltime, you can call to cancel it and save the rest of your unemployment deferment time in case you need it down the road. A deferment is better than a forbearance because the government will pay the interest on your subsidized loan during deferment. You are entitled to the deferment time and should use it. Forbearance time is discretionary and can be saved to use for other reasons when you may not qualify for a deferment.
I think you should save your nest egg. You can always put it towards your student loan once you are working and have a steady income.

 

[EthansMom]

You probably aren't eligible to consolidate the loans since you don't have a source of income right now. My husband consolidated his loans through the U.S. Gov't Direct Loans program a few years back and it really helped make his payments more reasonable. So, it's definitely something to consider when you are working.

I agree with the previous poster that you should consider getting a deferment due to your unemployment for now.

 

[akcire]

I second the idea of the feds for a job. Right now the FDIC has a TON of law jobs available.

Additionally, when we consolidated our loans we used the Kentucky Higher Education Something. We did not live in Kentucky, however they were servicing one of our loans, and they seemed to be the most helpful. I would look at your current providers and see who is best amongst them, and call and ask about consolidating.

Are you working at all? When did you graduate? Depending on your family situation, you may also want to look at the JAG corp. It wasn't for me or my husband, however we have many friends who love it--and they will pay back some of your loans (always a plus).

 

[donald&daisy]

Thanks for the advice, I didn't even know there was such a thing as unemployed deferment. I have already printed the form to fill out and send in. I have been looking at both State and Federal jobs things are just tight in my area and I am tied to where I live. I graduated in May and found out I passed the Bar at the beginning of Sept. Thanks again for all the advice!