In debt with student loans

Post Reply New Topic

Are you in debt eith student loans? I'm over 60k in deby from going to a college that I eventually had to drop out and bow Sallie Mae is asking me to pay over 300 a month for the next 25 years. I can barely find/keep a job and make enough to pay rent never mind this! Anyone else in the same boat? Do you know any good options for this kind of situation?

You can defer payment of your student loans owing to lack of income.

I'm paying a lot for a degree I don't have.
I think the worst decision I've ever made was choosing to go into this certain school as a freshman
(and then choosing to stay two years because I made the only real friends I've ever had there).
I was definitely not smart enough or rich enough to be at that school.(not sure how I even got in)

Yes, I have a six figure student loan debt. That is the price I had to pay to get my degree from where I graduated from, as there were no scholarships that I could qualify for. I knew this going in, so it was something that I anticipated. It will likely take me twenty to twenty five + years to pay it off if I stay a teacher though. Unfortunately, I do not qualify for the 10 year teacher repayment plan due to instability in my particular teaching position. I have been thinking about leaving the teaching profession altogether and going into industry work due to the pay being so much better (almost double starting out). It would be nice to have those student loans paid off quicker and not have them looming overhead every month. I have acquaintances that graduated with me with the same degree that make 3 to 4 times my paycheck every month working in the chemical industry. Sometimes the grass is truly greener on the other side of the fence.

Yep. Drowning in student debt here too. Around $60000 too. One thing to look into is consolidating the loans and getting them on a income-based repayment plan, if you're income is low you may end up paying nothing (which does mean the interest you owe will grow and if you do get a good job you will have to start paying more) but after 25 years it is forgiven even if you haven't paid back a dime (as long as you couldn't).

The big surprise though is that when/if the debt is forgiven at the end of the 25 years it is counted as taxable income so you'll get hit with taxes that year.

An additional note on IBR and loan forgiveness after 25 years.

AS OF NOW, when this happens, there is an IRS form that will mitigate what (if anything) you own in income taxes based on what assets you actually have in the year the debt is forgiven.

For someone with near to nothing, there may be no tax liability. However, there's no guarantee this will be the case in the year when YOUR loans are to be forgiven.

Also, there is a standing Bankruptcy case where a woman was able to get student loans discharged, and while the creditor argued that she could use IBR, the judge held that the tax liability on someone of such limited means in and of itself was an "undue hardship" qualifying the debt for bankruptcy relief. IRS debts/obligations ARE NOT subject to bankruptcy discharge once they are incurred.

I also have around 60k in student loans.

Income-dependant repayment is the default where i live though, so it doesn't hurt that much, you have to pay a certain percentage of your tax-deductable income that lies above the minumum wage; this way, you'll always have your minimum wage left to live off of, regardless of your actual income and debt size