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Call it what you want but I would love some help from the federal government with my student loans. I am not talking forgiveness here but I would absolutely love and appreciate the ability to refinance all of my student loan debt including my private loans into one loan at 3% for 30 years. I would even pay a reasonable origination fee.
Imagine…a new loan for say $235,000 at 3% for 30 years. Come June my student loan payments will be about $1,200 per month and some of those loans are just interest only. Under this scenario, my principal and interest payment would be about $1,000/month and I wouldn’t have to worry about variable interest rates ever again.
The total amount of interest paid to the government would be roughly $121,700. The loan is not able to be discharged in bankruptcy so the government would get their money and we all know the government will garnish your wages if you don’t pay on your loans and take any tax return you ever hope of receiving…
I know I am dreaming but...Stimulus for Chitown. =)
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I live on a poverty-level and have a student loan garnishment of nearly 10 percent of my income.
To get my loan out of default and end the garnishment, I would have to voluntarily pay an additional equal amount for nine months.
And for the privilege of being garnished, $17 is extracted by Treasury every time.
Net result, the monthly principal reduction is nearly zero, and I have no hope of paying off the loan until either my expenses decline (unlikely on poverty-level living) or income increases.
Yes, student loans can be very evil. I hope things turn around for you.
Even if you could get student loans discharged in BK the likelihood would be that you would not be able to practice as an attorney.
I've been thinking about this a lot. Me and honey owe almost $500k in student loans. His are almost all federal; mine are half federal and private. People talk about student loans being "good debt," to the extent there is such a thing, but I disagree.
People assume that loan debt is okay because you'll have an increased income as a result of incurring those loans. Not necessarily true, by any stretch. And given the almost impossible task of discharging the obligation, whether federal or private, makes them the most onerous of obligations, in my opinion. While I have no plans to forego my obligation, some people, like Terry, need some relief, and none is provided. It's a distressing situation.
Chitown this is a topic that is very near and dear to my bank account.
I was in a position similar to yours when I graduated from my MBA program and started working in July 2007. During the time that has past I have paid off $62K.
I credit my success to reading Dave Ramsey's Total Money Makeover and making a focused plan. Even as an MBA grad I felt the book was very eye opening, especially the sections about money and debt myths.
From your previous post I see that the Debt Avalanche is a better option than the Snowball, which Dave is known for. Regardless, the other information he shares is so valuable. It is a quick read, written at an 8th grade reading level. I highly recommend it to you and everyone else. It might just give you the information you need to KILL the debt monkey.
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