Student Loan Advice

**frugalredhead** · 12-12-2014, 07:56 AM

http://blogs.wellsfargo.com/studentloandown/can-lower-student-loan-interest-rate/

Have you looked here? This states that student loans after 2006 already have fixed interest rates, and it doesn't seem like you can get those lowered. If you consolidate loans that have different rates, your new rate will be a weighted average of the rates you currently have. You can consolidate and extend the length of your loan payoff, which will decrease your monthly payments for now, but you'll wind up paying more over the life of the loan.

I had consolidated my loans back in 2003 because my monthly payment for undergrad and grad school would have been over $1000 a month and I just couldn't afford that. I have a private loan that couldn't be consolidated, which has a variable interest rate and I could pay off in 2 months if the rates went back up and I needed to - only at 4% now). My federal loans will be paid off the year my 3 year old goes to college - 30 years after I took them out. Luckily the rate on those is only 1.88% because I finished school when interest rates were insanely low.

If you need to consolidate to afford the monthly payment because you're just starting out, I understand that, but as you start to make more money, just don't increase your spending elsewhere because your payment is low. With interest rates considerably higher than they were when I finished school, you'll be costing yourself a lot of extra money!

**Weird Tolkienish Figure** · 12-12-2014, 10:05 AM

Originally posted by mtm5062 View Post

Hello,

I am looking for advice in paying back my student loans. I was wondering if it would be beneficial to consolidate my loans. I have 2 loans in my name totaling $18,314. I also have 1 Parent Plus loan in my mothers name totaling $36,000. The total I owe is around $54,000 and I currently pay $79 + $206 + $328 which is $613 a month. That is pretty steep for me to pay but I don't want to add on anymore time and want these paid off as soon as possible. Is there any way I can consolidate all 3 loans, move them into my name, and receive a lower interest rate? I reached out to numerous other agencies but they all appear to be scams. I feel my interest rates are pretty high and would like them lowered. I also never missed a payment but it becoming hard to handle with a mortgage and car payment. Please give me any advice you may have to help me pay these loans down without getting hit with high interest rates and super long terms.

Also, I just started a job with the government on 12/23/2013 that does offer the Student Loan Forgiveness after 120 payments (so 9 years from now).

All this stuff is pretty confusing to me and I just don't want to fall victim to a scam.

Thanks,
Matt

Are these federal or private?

If they are federal, don't consolidate a parent plus loan with non -pp loans. I'm not even sure if they'll let you, but anyway that disqualifies you from getting on an income based plan.I would consolidate your non-PP loans as one, and then go on a payment plan like IBR (income based repayment) or PAYE.

Your parents can get on ICR with a PP which will be 20% of their discretionary income. Then have them pay the loan and you can pay them. Unfortunately, that is probably as low as you can go.

**mtm5062** · 12-12-2014, 10:14 AM

I know its probably the right thing but 30 years to pay back student loans just seems crazy, thats as long as a mortgage and my loans are nowhere near what my house costs.

The 2 in my name are federal through Great Lakes. The one in my mothers name is private parent plus.

Yeah it looks like my only option is to to IBR for the 2 in my name to lower the payment, and if it takes longer than 10 years than it gets forgiven.

Is there a way to put the Parent plus in my name and have it forgiven in 10 years?

**Weird Tolkienish Figure** · 12-12-2014, 10:29 AM

Originally posted by mtm5062 View Post

I know its probably the right thing but 30 years to pay back student loans just seems crazy, thats as long as a mortgage and my loans are nowhere near what my house costs.

The 2 in my name are federal through Great Lakes. The one in my mothers name is private parent plus.

Yeah it looks like my only option is to to IBR for the 2 in my name to lower the payment, and if it takes longer than 10 years than it gets forgiven.

Is there a way to put the Parent plus in my name and have it forgiven in 10 years?

Your parent's loan is private? For private loans it's essentially up to the company. You have to ask them.

For federal loans, yes you can put it on IBR/PAYE and try to get it forgiven after 10 years.

**jeromanomic** · 12-15-2014, 01:23 AM

first look at the interest rates and see if it's possible to roll them all to the lowest rate

then find out if there are any exit fees...

It is usually a good idea to consolidate debt but be mindful of rates and costs as it is possible to do more harm than good

**mtm5062** · 12-17-2014, 05:49 AM

I just consolidated the 2 loans in my name which is going to save me around $145 a month and about $4,000 once it is forgiven in 9 years. But, I still have a Direct Unsub Consolidation Loan that is in my mothers name for $36,000 total. I am paying $328 a month on that which is steep.

I am wondering if there is any way I can move that loan into my name and qualify for Loan Forgivness with a Direct Unsub Consolidation Loan? If so, I would want to stretch it out so that my payments are the lowest they can be. Correct?

**optimist** · 12-18-2014, 12:55 PM

Originally posted by mtm5062 View Post

I just consolidated the 2 loans in my name which is going to save me around $145 a month and about $4,000 once it is forgiven in 9 years. But, I still have a Direct Unsub Consolidation Loan that is in my mothers name for $36,000 total. I am paying $328 a month on that which is steep.

I am wondering if there is any way I can move that loan into my name and qualify for Loan Forgivness with a Direct Unsub Consolidation Loan? If so, I would want to stretch it out so that my payments are the lowest they can be. Correct?

There is really no way to move a private loan into a federal loan. But even if there was, you could never get your mom's name off of that promissory note. There is no reason for a creditor to do that. Is there a way you can take a new federal direct loan, use the proceeds to pay off your mom's private loan, and then get the federal loan discharged?

**mtm5062** · 12-19-2014, 05:30 AM

I am not sure but that would be great. I will have to look into that. Thanks

**ashleyjohn** · 12-29-2014, 12:43 AM

The best approach is to consult a loan agency. I usually consider Greater Central Texas Federal Credit Union for all my financial needs. You can also consult them.

Student Loan Advice