Money Smart Kids
Tackling Private Student Loans
Private loans can be tougher to pay off than federal loans. Here's what you need to know to reduce the pain.
By Janet Bodnar, Editor, Kiplinger's Personal Finance
November 7, 2007
How can I get out from under my $43,000 of student-loan debt? Most articles I see reference the federal student-loan program, but what about private student loans? Are there any little-known methods or laws that will help people like me reduce their monthly payments?
Outside the federal student-loan program, your options are limited. Federal Stafford loans offer more-favorable repayment terms than private loans, plus more opportunities to have loans forgiven.
For example, you may be able to tie your payments to a formula based on your income. Or you may qualify for loan forgiveness if you teach in a low-income school (for details, go to http://studentaid.ed.gov).
Also, volunteering for the AmeriCorps program qualifies you for an education award of $4,725 a year for two years to help pay for student loans, and some colleges match the award (check with your school).
But those programs aren't available for private loans. In that situation, your best bet is to shop around for the best terms you can find on a private-loan consolidation (compare programs at SimpleTuition.com and FinAid.org). If your credit score has improved significantly since you took out the loans, you may be able to get a better rate.
Consolidating also lets you stretch out the term of the loan, which may lower your monthly payments. You'll pay more interest over time, but the breather could get you over a hump. And you can pay ahead on your loans as your income rises, as long as there are no prepayment penalties.
Some occupations forgive loans as a recruiting tool. And if you meet income requirements, you can deduct up to $2,500 per year in interest on any loans used for higher education.
Once you've arranged the best terms you can, you'll just have to bite the bullet.
Leisa Aiken, a financial adviser in Chicago, recommends that clients with significant student-loan debt go on a crash program to pay off high-rate debt as soon as possible, even if it means continuing to live like a student. Move back home with Mom and Dad, get rid of the car, take a second job, and put the extra cash toward your most expensive loans. Low-interest loans can wait. "Paying $150 a month on a 4% loan isn't all bad," says Aiken. "It's more of a nuisance."
A law recently signed by President Bush will help ease the burden for students who borrow through the federal program. Struggling grads will be able to tie student-loan payments to a more-generous income-based formula. And the government will forgive loan balances after 25 years. But the new law hasn't taken effect yet.
The best way to stay on top of student loans is to limit how much you borrow in the first place. Next week, readers tell how they did it.
- Comments
- RSS
Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy
Reader Comments (44)
Posted by: JR at 11/07/2007 11:40:15 AM
Just yesterday I read an article at the NY Times ('Move Over, Orbitz') that said that sites like Simple Tuition aren't totally straightforward because they have a financial interest in the lenders they list. In fact, right on their lender partners page they state “We receive a transaction/referral fee when a user selects a Partner Loan product.” There has actually been a good deal of negative media for these new loan search sites. Its important to shop around, but its even more important to know which companies you can trust.
Posted by: Bridget at 12/18/2007 12:48:20 PM
How are we, those struggling under a mountain of education debt, supposed to hold down two jobs if we "get rid of the car?"
Posted by: Kenneth Tyler at 01/18/2008 03:10:23 PM
I have a wife and two small children and am currently trying to support my family under a mountain of private loan school debt (about $80,000 worth). I currently make around $42,000 a year. With all of the required withholdings this leaves me clearing about $2,400 a month. Luckily I don't have a car payment, but I still have to pay $950 a month rent, electricity, utilities, and other various required things in order live. Not to mention I have to provide food for my family (which can easily be around $250/month if not more). On top of all that crap, Sallie Mae is wanting me to pay $1200 a month. THAT'S A WHOLE PAYCHECK. Then when I call and try to negotiate my debt, the only option they can give me to help out is an interest-only option (which basically means I'll never pay my loan off) of $900 a month. I just don't know what to do. If anyone does, please let me know.
Posted by: monica hugo at 01/24/2008 08:09:06 PM
I am right there with you Kenneth! I have over 100,000 in private student loans. I went to a private school where they didn't inform me of what it would be like after school to deal with these loans. I feel they had some kind of connection with outside lenders so they just kept giving private student loans. This is turn has put me in the same situation you described yourself in... I have called numourous times to Sallie Mae to come up with a solution and be able to pay something each month but I can not afford to pay $1500 a month or $900 (after consolidation)...I am at my wit's end!!... Wish we had the answer for each other.
Posted by: amanda at 02/09/2008 07:54:41 PM
Sallie Mae got the best of me too...there has GOT to be something we can do.
Posted by: Theresa at 02/21/2008 10:17:17 PM
I understand totaly, I have 54,000 in private loans and its killing me. The problem is know one seems to care. I jokinly tell my kids I will be dead before my student loans are paid off, the sad part is it may not be a joke.
Posted by: Knowledge at 03/05/2008 11:24:06 AM
Just don't pay them! Student loan companies prey on students with their unbelievable interest rates and the government lets them. I just am not going to pay mine. Yeah, it will be on my credit report for 7 years but who cares. I would rather my credit be jacked up for 7 years than pay someone $1,500 for 30 years. That's $540,000!! You would be better just to save that money under your bed for retirement. Why give away a half a million dollars and all you get is a degree and the opportunity to work a job that doesn't pay you what you're worth, doesn't want you to take a vacation and has no problem of firing you tomorrow!!
Posted by: Stella at 03/05/2008 01:21:08 PM
Comment for Knowledge: It's not just your credit report that suffers. If you don't repay your student loans the government can garnish your wages and the IRS can withhold tax refunds until you're paid off. Not even declaring bankruptcy will get you off the hook with student loans. Better to pay them than endure a LIFETIME of financial hardship.
Posted by: Knowledge at 03/05/2008 06:14:49 PM
Stella, the government won't come after you if you don't pay a private loan that's not guaranteed by them. They could care less! At worst, the private loan lender can try and take you to court and get a judgement. This, as crazy as it might sound may not be such a bad thing to let happen. The courts will rule in the lenders favor but force them to work out a reasonable payment plan with you according to your income and your necessary needs(housing,car payment, medical ins, etc.)I have seen this done and 99% of the people end up getting a reasonable monthly payment plan worked out at a much lower rate than demanded by the lender or by you when you try to negotiate with them as Kenneth (above) said he tried to do. ... The loan people would rather get something than nothing in the end. ...
Posted by: DB at 05/19/2008 06:29:53 PM
After much research I agree with knowlege's post - private student loans are subject to the same SOL (statute of limitations) that all private debts are. This varies by state from 3 to 10 years and begins counting from the moment you don't make a payment....
Posted by: Marilyn at 12/30/2008 01:38:01 AM
I'm a single mother that has ($85,000) worth of private and federal student loans,after four years of college. I cant afford $1250 a month in payments. no one seems to care. I'm doing all I can to cut everything, even selling our home is next. my private lender refuses to let me consolidate my loans, because they will lose money that way. I never dreamed it would be like this after four long years of stressful school, only to endure this mountain of financial stress for 20 yrs to come. please LORD HELP ME!!!!...I pray that OBAMA helps out people in our situation with student loans..... can we go to the government and ask for some BAILOUT MONEY!!!!!!
Posted by: Chris at 02/07/2009 08:56:44 AM
Marilyn, How much of the 85K is federal? Have you consolidated the federal with the Dept of Education's Direct Loans program? If not, you should. Assuming a large portion of the 85K is federal loans, your monthly payments should not be so high. By consolidating with Direct Loans you can probably get better terms. And also, you can get a pretty much guaranteed temporary forebearance so that you don't have to pay for up to a year, its not the smartest thing to do in the long term, but when you are in a pinch month-to-month (as it sounds like you are) its nice to have that breather. Hope this helps.
Posted by: crystal at 03/25/2009 01:14:17 AM
Sometimes its not the burden of federal loans, its all about the private education loans. companies like sallie mae dont care how good or bad your credit is they still charge you interest rates up to 18.25%. I cant afford my private loans but i can afford my federal loans. any suggestiond on ways to get them to budge on the interest rates??
Posted by: V at 04/10/2009 06:45:22 PM
Right now I have $20,000 in private student loans through Sallie Mae. The monthly payment is $300 and we only have one income. We have to move because we cant afford our bills. I told Sallie Mae that I can pay $50 and asked that they consolidate and begged them to help in some way. Their only solution is to pay $50 per loan to forbear them for 3 mos along with $319 as a "good faith payment". I have 3 loans, so I would have to pay $469 to forbear them for 3 mos when my monthly payment is $300.. What part of "I have no money" do they not understand? Isnt there something I can do? A grant, forgiveness...something? Please!! We cant even afford health care and food.
Posted by: TC at 06/11/2009 06:17:19 PM
I’m a college graduate currently struggling mightily with student loan debt. I was laid off work back in November of 2008, and never dreamed that with a college degree and 2 years experience in my field of work… that I would still be unemployed 6 months later. I have around $100,000 total in student loans from college, and $55,000 is in private loans through Sallie Mae (approx $600.00 per month due). Sallie Mae calls around 5 times a day, and no matter what I tell them, they tell me there is nothing they can do to help me. So the days past due and amount due and fees keeps adding up. All they want is $150 to put the loans into forbearance (which I don’t have). I can no longer even count the number of times I’ve been harassed by them or hung up on by their operators. My unemployment has run out, I’ve cut every possible expense I can, moved in with my parents, and I can’t remember the last time I went out with friends… this isn’t living!...Coming out of high school, I was told… “you can’t survive today without a college degree.” So I signed on the dotted line, and have regretted it since. I literally feel as if I’m drowning here, and there’s nothing out there to help me. As someone else mentioned, why does NO ONE SEEM TO CARE? Am I the only person going through this? What can I do!?!?!?
Posted by: Cheri at 06/27/2009 08:31:37 AM
Hi. I'm hearing all of you here. I regret nothing but taking out the private loans. I am going to suggest to all of you here to go to Suzeorman.com and post your questions to her. She is abreast of all financial info ...Perhaps nothing can be done, as is said here, but bite the bullet. Easier said than done given the state of the economy. As far as federally funded student loans, we are fortunate to have the new IBR coming out in July, or income based repayment plan. Look it up. Also, for those of you in public service (policemen, teachers, look it up if your profession qualifies) there is a new public service loan forgiveness program which can significantly lift your burden regarding federal loan repayment. In combination with your income based repayment, if that is to your advantage (check on IBR.org for a calculator to determine what your payment would be based on income and family size) you could at the end of 10 years of repayment have the bulk of your loan forgiven. Look up the details but I believe it will take into consideration 2 years of past payments so for some of you who've been in repayment for 2 or more years, you could have only 8 more years left to pay. That could be a significant financial burden lifted. Here is the lesson I have learned: beg, borrow or steal but DO NOT take out private loans to pay for your education! I have nearly 100,000 in student loan debt, most of it accrued post-graduate and much of which from private education loans. Fortunately, I am a teacher so will qualify for public service forgiveness (if I can find a job, that is!) and in combo with IBR really can breathe a little easier than previously. . . but what to do about those private loans??? Perhaps someone will hear our cries and help us out of private loan hell. Until then, let's help others avoid the lessons we are learning now by spreading the knowledge we've gained through our experiences. Peace & good luck!
Posted by: Molly at 09/13/2009 02:57:42 PM
I have private loans through Sallie Mae and have been struggling to pay them for months! I was in the same boat, they wanted $900/month to pay them off (which is 95% of my take-home pay per month!), and when I asked for a reduction, they wanted $425. That's more than my rent! I'm thinking of applying for welfare at this point to buy groceries. It's disgusting how unregulated the private loan industry is, and how little is done about it! I believe I'm going to apply for 6 month forbearance, try to save a years worth of payments with my Christmas bonus and tax return, and go back to paying them with my savings instead of taking them out of my paycheck. I've written to all of my state representatives and senators, even President Obama! Hopefully someone wakes up and gives us relief soon. Good luck to everyone out there, we're all in the same boat together!
Posted by: noy at 09/30/2009 06:47:01 AM
For those who think Private student loan is a Joke DO NOT DO IT. As the other post said beg borrow steal but do not sign your life away. Unfortunately most people who happen upon this post will be people in the same situation as I am $60,000 in dept, not to mention half is not in my name alone because I needed a cosigner. If you read this before getting a private student loan and still go out and get one then your are going to regret it. There are so many other ways to pay for an education, look it up on the net...
Posted by: Derek at 10/06/2009 11:04:55 PM
I'm in the same boat as the rest of you. Sallie Mae gave me over a $100,000 loan, with no co-signer. For some reason I thought that I could make minimum $50 payments. Next month my loan starts and they want $1400 a month. Get real! There's no possible way for me to pay that. They don't seem to be able to help either. I now wish that I wouldn't have went to college. I'm unemployed, and have this on my mind too. If anyone has any answers please let me know.
Posted by: Iam Phuckt at 11/08/2009 09:12:53 PM
Dear all...For those out there struggling w/ private student loan debt this 25yo '08 grad can relate. I currently weigh in at $1250/mo and prospects for grad school anytime soon are slim. I regret the day I promissoried. I was steered away from the state school and was too eager to get away from my parents...well look at me I'm right back at home...which is a crummy apartment as my parents too are straddled with private loan debt from professional degrees to even dream of proper home. So much for being educated and the myth that I couldn't get the education I got had I stayed locally. I blame the previous generation for poorly teaching us about financing and the middle class mentality of hard work and education being the most important things--well perhaps so, but let's no longer define that by a B.S. as doing so would be just that. As I write this, I cant imagine how much worst things would be if I had gone to one of the private universities (w/ fin aid) here in NEng which still cost more than my mid-Atlantic alma mater (w/out aid) Someone mentioned they cant remember the last time they went outI empathize fully and I have an "it could be worse than $2000 take home paying" job. Parents, please do right by your children. For those thinking about private loans, I won't tell you not to, but before jumping in search around this wonderful Kiplinger site for one of those loan calculators. Are you willing to put your loved ones through that?
Posted by: GVGrad at 12/14/2009 07:26:15 PM
I have about 50k in private loan debt and I feel everyones pain. I have not made a payment in over a year and they have gone to the collection company the the Bank has contracted. This company has been relentless sending letters and even calling all of the personal references I put on my applications 4 years ago. So here is what I did and it is working out great. I met with a bankruptcy lawyer and talked to them about chapter 13 (as a backup plan). I came up with a budget with the lawyer that include my realistic expenses monthly (even entertainment...) I determined that after absolutely every bill I had about $250 left over. So there is no possible way I could pay the $650 they wanted me to pay. When I called the Collection company back, I let them know what I was doing with an attorney and gave them a counter offer to the $615 they originally offered. After a few negotiations they accepted and put me on a payment plan. Although this is an 18 month plan, it buys me time to do everything I need to get on track. Lastly, I dealt with them as a professional and tried to keep emotion out of it (I would have bitched these people out otherwise). I called them back every time they called, I asked for more time and gave specific dates, I made all deadlines, and provided them with information they needed. Believe me, I have been terrified of this situation, but it helped me out. I hope it helps you out too.
Posted by: tracy at 02/04/2010 12:20:41 PM
I completely understand what everyone else is going through. I have $100,000 in student loans, two kids under the age 5 and now unemployed. Can't find a job, can't get government assistance, child support on my oldest is only $65 a month, and my husband and my bills are more than what he brings in. Both my kids have health problems and can't afford to get all the stuff they need to breath easier. Sallie mae has screwed me soooo bad. I have gotten letters that they are going to take me to court now. What to do? I have a lawyer is going to try to...get it dropped. The only loop hole with private student loans and federal is what's called the brunner act. If you can't and will not be able to pay for your loan and still support your family and the circumstances aren't getting any better for you, and you have tried to reason with the loan company, the brunner act requires that the court drop or take a portion of the loan away. I have just begun the process...still trying to come up with the money for the lawyer. It took me a longgggggg time to find a lawyer who would even take the case b/c most bankruptcy lawyers don't want any part of it...I am willing to make a stand and be an example if i have to!!!!!!!!!!!!!!!
Posted by: JD at 02/08/2010 05:40:01 PM
I've been reading through all these comments. And I have to say I don't feel so alone anymore in my burden with Private Loans. I actually just got off the phone with a collections agency, and it wasn't a good experience. These people have been calling everyday not to mention my cosigner and they somehow got the information of other relatives, how they did it, I'm not sure. Is that legal? I've never given them anyone else's info other than my cosigner so I don't know how they're getting this other information. I was nervous to call, but I got up the nerve and the lady was really rude and started lecturing me on how I should have known better before taking out the loans. I was 18 years old when these loans were taken out, my only concern was being able to graduate and finish school and the only option my financial advisors gave me were Private loans, which I regret so much, because it has not only affected me but family as well. I tried to explain to the lady that I'm unemployed, but I did ask her if I can close out the the loan by paying a one time minimum amount and she didn't give me an answer, she just wanted to continue arguing and lecturing me on not taking out the loan if I wasn't going to pay it, so I hung up on her. I wasn't given much choice when in college, which I'm sure was the case with a lot of people, but I did advise my sister not make the same mistake I made and thankfully she hasn't had to go the route of Private loans. They are a nightmare and I wish something can be done other than filing for bankruptcy. All I wanted to do was get an education, never in a million years did I think it would be so hard to find work after college and then end up in the situation I'm in now. I wish everybody the best, keep the faith!
Posted by: Sean at 02/12/2010 02:24:30 PM
I am over $120,000 in student loan debt, with about 80k towards private. I tried contacting the lender to work out some sort of terms which would allow me to pay-off old credit card debt that had accrued while I was in school. They would not budge! I explained that the 6 month grace period (which has come and gone) simply was not enough time, and that I would require about 8 months to settle about $10,000 worth of credit card debt, where I can than just divert my full attention to paying off my loans. All they cared about at that point was their policy, and how it was in written in the agreement. This has caused major problems in my house, and I'm pretty much at the end of the line with options...WTF
Posted by: Dawn at 02/17/2010 01:24:02 PM
Completely worthless article. This article says what everyone who's taken out a student loan or private loan already knows and offers no advice on how to actually help with their problem.
Posted by: Shannon at 03/05/2010 11:25:54 AM
My suggestion would be contacting your local Consumer Credit Counseling program (most states have one) and see if they can offer any advice. Maybe they know low cost/no cost bankruptcy lawyers. Maybe they can talk to your creditors for you and help set you up on a debt repayment plan. Just make sure you're going to an accredited agency whos been in the business for a long time.
Posted by: DeadEnd at 03/07/2010 01:30:09 AM
Consumer Credit Counseling isnt much help either, I went there and the lady told me everything that I already knew and said that I am obligated to repay 100% of my student loans back....... insane....My federal loans arent really a problem, but like everyone else, my private loans are probably going to put me in a grave at a young age. I also have around 10,000 in credit card debt that I accumulated the last couple months of each semester for the last 3 or 4 years. I cant get my private loans consolidated, and seems as if there isnt an answer out there from anyone. I haven't had alot of job opportunities since i've graduated, but the ones I have had wouldn't do alot for my financial situation. Now I have a couple degrees and cant find a job to support the cost of my education. This whole situation has destroyed the relationship that I had with my family and a lot of my friends. Why is there help for GM and not any for people in our situations?? 7 billion dollars divided among the United States population would have been quite a chunk of change and would have most likely saved the economy...I was dumb enough to go to college and put myself in a position where I wont have much of a future. Either way this Sallie Mae is very bad, if someone would have told me that I would be in this position once school was done, i would have never taken out any private loans. It will several years before I will be able to buy a house...Having a family is pretty much out of the picture of me too. So because all what College/Private loans have done for me; broken spirit, ruining the relationship I had with my parents, giving me a mortgage to pay each month without actually owning a home, no hopes to get a head in life or start a family of my own...I figured become property of the military for a few years and they will pay off my student loans, like they say they will do, but their is a catch up there too. None of them will cover your Private Loans, just your Federal, If i would have gone into the Navy or National Guard before college, then I would have had a majority of school paid for...I would let a military unit send me overseas, drop me off in a location by myself, tell me to meet up with them in a another location 300 miles away 4 months after the drop off and if I make it they will pay off my debt...like everyone else here, im lost and dont know what to do. If anyone has more Ideas, concerns or comments about the private loan monsters, dont be scared, post it up here...
Posted by: Tyrone at 03/16/2010 07:34:44 PM
I have a private student loan amounting to $42,000 for 6 years time. The economy crashed as I graduated and have been making little money. The loan company refused to accept payment lesser than $1,200.00 a month., refused to work with me on the situation... now I am in default and they ordered me to pay half of the amount in 15 days. How is it possible?
Posted by: Nena at 03/16/2010 08:05:55 PM
My son had a student loan at Sallie Mae the amount of $42, 000. and is in default. so they sent it to their collection department and added a fee of $18,000.00, they said it is plus the interests and charges. Now they want him to pay a reduced amount of $21,000 in 15 days to clear up the whole thing including the cosigner of the loan who is his cousin, which by the way they told her, they are going to garnish her wages if not paid within 15 day period. The only reason why this was on default was, they refused to work out with him, a monthly payment he can afford. They were asking $1,300.00 a month. He has a car payment of $350.00 , an apartment of $950, car insurance of $239.00, gas utilities and food. His monthly pay is not even enough. Does anybody know how to deal with this kind of situation? A very concerned mother!!!!
Posted by: JC at 03/20/2010 11:15:56 PM
Unfortunately, it seems many here have fallen into a trap of "getting an education for education's sake." I keep reading these posts where it seems people go to college for the heck of it, obtaining $120k degrees in basket-weaving. So much capital investment (tuition fees+interest) with so little yield. I'm amazed at how many people borrow at a rate of over 30k/year with the prospect of making 40k/year after a degree is granted. It's foolish economical/common sense. It's a shame really - Lack of pragmatic sense coupled with outrageous interest rates levied by private banksters have created a grim picture indeed. It seems options available to wade out of the quagmire are limited. One can decide to either A) pay the loan off by manipulating personal finances to the best of one's ability (maximizing revenue/slashing expenses) -or- B) Not paying a dime of the loan and living under the radar of .gov for as long as possible. Another common theme that I've noticed throughout the posts here is total lack of proper use of "non-educational expense" credit ( i.e in the form of credit cards). Perhaps society as a whole is finally starting to learn lessons in fiscal responsibility/credit management. In the meantime, people caught in a trap seem...screwed, really. As I mentioned before, it's quite the shame. But the sad, sad, examples that recur through these posts are examples of poor personal/economic/life choices. ...really, where does the blame rest? The system can screw you, BIG TIME, if one isn't wary. I just hope future generations learn from the mistakes of past ones.
Posted by: zig at 04/11/2010 12:13:05 PM
Will private student loan lenders consider satisfying a student loan by accepting a smaller lump sum payment made by a third party? My son married a woman with a private student loan, the amount of which they will never be able to pay off.
Posted by: Don Schewe at 05/02/2010 09:25:08 PM
How do we take legal action, for just providing a special class of student loan borrowers from the government and not private student loan borrowers? A sutudent loan is a student loan and debt is debt.
Posted by: Rosa Floyd at 05/12/2010 10:05:27 PM
I am the co-signer for my grandson. He has made 4 private loans -2 without my knowledge with me as the co-signer. He called me last night to tell me me that he was going to quit college. I thought I would worry about repayment in a few years. I called the 4 private loan companies, one being Sallie Mae, and discovered that the total is $45,000. I also discovered that they will not work with you. I work 7 days a week already and live paycheck to paycheck. Grandson will never make enough money to pay what they want, about $700 a month. I knew nothing about private student loans. Also learned that I can not consolidate the loans and the interest goes un ungodly every minute that goes by.I thought about bankrupty until I read this site. I thought I was the only one with this problem until I read this. This debt now will ruin my grandson and my life. Something has to be done -but what? I will write the President and whoever I can, but I have feeling that no one cares. I would really be better off dead at this point. I can't work anymore than I am right now. I can't cut back anymore because I am barely living. Grandson is 21 and not working because he can't find a job. I hope the rest of the grandkids don't go to college. For what? So they can work the rest of their life paying back student loans and living with their parents.
Posted by: Via at 05/14/2010 05:05:20 PM
I am a single mom who just spent the last 6 yrs going to college to better myself and get an education. Now I'm $45,000 in debt and lost my job last yr. It took a yr to find a job Now I make 36K a yr. Wow. I made more money without an education. Now I owe all this money and starting from the bottom again. the bank wont work with me and now i see i'm not he only one in this mess. We need to do something. This nightmare cannot be the AMERICAN DREAM and EDUCATION.
Posted by: karen at 05/26/2010 10:10:35 PM
I am 51 years old. I have worked in the Social Work field for 17 years. As a single parent of 3 children and commuting to work - I could not afford student loans, child care, commuting to work, car payment, mortgage and basic housing costs - I deferred my student loans - and the interest continues to accrue - my original $20,000 loan is now $90,000 and unable to affrord $900 per month. I have written a book on growing up in the system as a foster child - no resources to draw from and speak approximately 10 times a year to various agencies re: growing up in the system to know working as a Social Worker of the system...However, the monthly payment is so high I now cannot afford the payments. I pride myself on paying my bills and do not expect handouts. However, I need realistic payments rather than $70,000 in interest. I am appreciative of my education, however, I needed to file bankruptcy in 1998 - my student loans could not be put on hold or qualify for any funding to assist me in completing my desire to be successful and to pay the $20,00 originally borrowed ($5,000) borrowed a year of college while a single parent and working nights as a certified nursing assistant. I am deeply saddened this is going to affect my credit and all that it has taken to build a life I am proud of. I could not qualify for any program that would withhold the interest from accruing. In fall of 2010 I will be faced with some painful decisions concerning my home, etc. Again,l it's not about repaying my debt or what I owe, just if the debt would be affordable - as $70,000 in interest seems absolutely rediculous on a meager lifestyle and budget. Thank you for listening - Blessings
Posted by: hall at 06/14/2010 08:59:19 PM
It's funny that I have three times as much owed in federal loans than private and I pay significantly more each month with my private loans. What Salie Mae does should be illegal. The interest on my loans is 9.7%. I can't consolidate because my credit sucks. I would definitely be able to drive a Benz or BMW if it wasn't for my loans, and to top it off, what I do, you don't need a college degree for. It is just recommended. I am scared to get a better paying job because I will end up just paying more with my federal loans and it would cancel my raise out. I couldn't imagine if I had to pay 900 a month in loans. I would not be able to survive. I don't think I would pay it, and I wouldn't stress about it either. I just wouldn't plan on buying a house or car anytime soon.
Posted by: DR at 06/17/2010 07:13:26 PM
My husband and I are almost $50,000 in debt on just 1 private student loan that is about to go into default. We begged EduCap to help us by reducing our payments, paying interest only, forbearance or deferment was a NO because they put us on that during our bankruptcy. Every time they called we pleaded. NOTHING. We overpaid for years to be crapped on the minute the economy absolved my husbands job. We spent our measly tax refund to buy a run down trailer so our daughters (1 unborn and 1 year old) wouldn't go to Tent City in Sacramento. We squatted on my husbands parents property until we could no longer keep the girls warm and we had to move into their house. We are at our wits end...There is no more help for us. My husbands unemployment ran out this month and we are trying to get off welfare. This is not life. There are barely diapers, there are no birthday presents, I made my daughters dresses out $1.00 curtains last month. I live to live. I have run out of hope. I love my husband I love my children, they are the only glory I have left in life.
Posted by: Nic at 07/06/2010 07:48:19 PM
I can not believe that this is happening to so many of us. I am a mother of a 24 year who suffers from Thyroid disease and in her college years had to stop attending Kent State. She, because of what I promoted, wanted to do all she could to continue her education. Neither of her parents had a college education and I as her mother promoted it so she could be a young lady educated with a job that would take care of her needs. Through all her struggles we were promised by CitiBank Student Loans that we could lower, put in deferment, whatever we needed to do to be able to pay the payment. I say we because I co-signed for her since they said we could make it work. Needless to say WE are both in the same boat as all of you. How can America do this to their young adults, their future, telling getting an education, and then make these poor kids pay those loans with such interest that not even a doctor could afford comfortably right out of school. Then to add to it with no job capabilities due to the economy. I am in such turmoil of how to help my daughter that still has such health problems, does not have insurance due to lack of not finding the right job with such benefits, and her parents on the road to nothing when it comes to her cost of insurance/school loans/medication. Who has that kind of money at such a young age. What a disgrace that our future, our young adults have such burden to live with and not be able to see the the wonderful opportunities education can bring!! If anyone knows of any help for any us, please reach out and at least try to help us. Blessings to all.
Posted by: Lisha at 07/18/2010 12:08:24 AM
I am shocked. I had no idea that there were so many people suffering in the same way that I am. I have been complaining for years that student loans have crippled our generation. I too was under the impression that I needed to get an education at what ever cost, and I regret even attending the private college that I attended. Here I am, 4 years and 2 degrees later, unable to pay my 40,000 in private student loan debt. What Sallie has and is doing SHOULD be illegal. I have done everything everyone else has done; credit counselors etc. Not only has salli been un willing to work with me, they often suggested to me that I should pay them first and forget all other debts. I once asked for a supervisor and got the run around of my life, which ended with someone telling that I didnt need a supervisor becuase what I really needed to do was pay my student loans. How do you respond to that? I refuse to starve, freeze, or become ill because of sallie mae. I am always on the hunt for a solution. We must make Pres.Obama aware of our issues. But how?
Posted by: Barbara T. at 07/18/2010 02:29:42 PM
I just found this web-site this morning in my desperate search for answers to a private student loan funded by Sallie-Mae. I was amazed at how many people are in the same boat as I am and saddened to see that nothing is being done to help this many people. I can't urge everyone enough to write letters to EVERYONE you think may be able to help. Congressmen, Senators, President Obama, etc., etc. The more we stay in their face, the more chance we have of being heard. And the more people we can bring on board the stronger we will be. My husband and I co-signed on a loan for what was then our son-in-law. My daughter was pregnant and we thought that this boy needed a chance in life. After all, he was going to be the father of our first grandchild. Little did we know that he would leave the state and my daughter and screw us royally on this loan. We like a previous reader, were told that we could be released from this loan after 2 years of minimum payments of $50 a month that we figured would be worth the risk if he did not pay. They even highlighted it in the contract!! What started out as a loan of 40,000 has now ballooned to $65,000 plus. There is so much to this story I could never explain unless I were writing a small novel as I'm sure you all know. I have talked to lawyers, consolidation companies (even some that are trying to scam students which is all we need), student aid organizations, Sallie Mae themselves (which by the way is an absolute act of futility), written to the President, and cried myself to sleep over the horrible mess we are in just for trying to help someone out. We are now in default with our house because of loss of 1 income. There has GOT to be something we can do. Form a coalition, band together and send petitions - we need to start a website with names, e-mail addresses, etc. There is force in numbers and from what I'm seeing here and the numbers I'm hearing - someone will have to listen sooner or later.
Posted by: P at 07/20/2010 07:01:07 PM
Crappy article. If it's supposed to tackle issues of private student loans, then why keep talking about Federal loans?
Posted by: Not Alone at 08/26/2010 11:13:17 AM
I am so glad to know I am not alone in this. My only real debt is my student loan (private) debt, and with that being almost 100k, my credit is screwed and I am at my wits end. I am only 28 years old and I dont know how I am going to make it. The minimum payment for my loans to not continue to grow due to the interest is over $850/month - meaning that if I even try to pay anything less, I am throwing away my money cause the principal amount will continue to grow. Even the debt collector said I was in a tough situation and it made no sense to even try to pay less - which I was willing to do. This has put such a strain on not only my marriage but my LIFE. I have no hope of ever buying a house or car or anything else that requires credit (my score right now is 484 due to non payment of the loans). I have no clue what to do. And from what I have heard/read unless I can show that I am at the poverty level I have no hope of getting the judge to drop them either. Its enough to make me want to quit my job and go on welfare. My takehome pay would be the same!! I have a family to support and there is no way I can afford the monthly payment, and I dont even want to think about trying to pay it for the REST OF MY LIFE. (if i only paid the minium it would keep it from growing, not pay down the principal). It gives me a sense of hope that I am not the ony one going through this, but also dispair that there are so many people in my same position and no one has any answers...
Posted by: PregoGrad at 08/28/2010 12:05:24 AM
this article is no help at all. private student loans are killing my family. I'm 22 graduated last fall, newlywed and now we're expecting our first child. When i called salliemae today to tell them i am on maternity leave and currently have NO income, they told me "you are still responsible for paying off your student loans" even without an income!!!!!!!!!!!! i just laughed, and hung up on them. i have another private loan...but they gave me an extra 90 day defferment, not that ill be able to pay after that ayway. My husband is a delivery driver and his income can barely pay down our bills. when i give birth next month, we have to cut stop paying one of our bills (rent, gas, electric, cable) something has to go in order for us to afford diapers! The day of my graduation ceremony(which was 6 mons after i actually finished school) all i did was sob, not out of joy but i knew that meant i had to start paying back loans that i can impossibly afford. my husband is still in school and for him, we will take NO PRIVATE LOANS! we really need to do something this. no one will take notice unless we make them! we have to unite and take a stand. publish a book with all our stories or make a national commercial, they have to look then, they have to listen then and they would have to DO SOMETHING!!!!!
Posted by: JJ at 09/04/2010 02:13:52 AM
We all need to write to our government about the crazy interest that private lenders are able to away with! I also am in debt to Sallie Mae for 42,000. I am worried that the only reason private lenders are able to get away with this, is because our government has deep pockets! Sallie Mae and other private lenders, my opinion of course, are happy to fill those pockets! 16.75% on 42,000....WOW, why was I so stupid?