My girl friend is in student loan debt. She is having an issue with her student loans (federal and private) and doesn't see the light at the end of the tunnel and can tell she is lost on how to get out. She has a decent job making $70,000 annually but living in San Francisco with the cost of living takes a good portion of her income. Wanted to reach out to the community to see if anyone had any ideas on how to refinance or of any programs out there. She has tried to consolidate her loans through sofi and other companies but with no avail due to her debt to income ratio. Any help would be much appreciated.
Some details on her loans;
1 $30,362 @ 6.875% Monthly payment of $200
2 $10,151 @ 5.75% - Monthly payment of $85
3 $38,119 @ 12.125% - Monthly payment of $445
4 $37,116 @ NA ("written off as bad debt with the hopes of statute of limitations") not sure if that applies to private student loans
5 $14,145 @ NA ("written off as bad debt with the hopes of statute of limitation") not sure if that applies to private student loans
Hey @Michael Swope . If I can interpret what I think you're saying, is that she has defaulted on loans 4 and 5 and is hoping that they just eventually go away and nobody ever comes after her for them.
I'm far from an expert in this area, but I can promise you that any institutional lender is 100% guaranteed to not simply forget about their loan to her, and she'll probably have collections people bug her for years. It will obviously be listed as a huge derogatory on her credit, and will serious hurt her creditworthiness for at least 7 years, during which time it's unlikely she'll be able to qualify for much of anything - maybe after several years if everything else is squeaky clean.
Sofi was the program I knew of. I have also seen people take out second mortgages or HELOCs on their home and paying off the student debt with it, this is actually a super-effective way to consolidate (and greatly reduce the interest rate on) your debt.
Perhaps you have a family member who would be doing to do so, and they can make that loan to you - maybe their refi is at 4.5%, and you pay them an extra 1.5% when paying it back to them. You're still saving tons of money compared with the interest rate of the old debt.
Sorry I can't help more. My wife was in a similar situation years ago with medical debt, took her several years before she started seeing the light at the end of the trashed-credit-tunnel. Like me, you'd better do well enough on your own income-wise during those years, because you'll have to qualify for everything by yourself - cars, mortgages, etc.
Good luck man.
It may be to late to negotiate those charge off student loans but, there are ways to have those removed. I've read results from folks over at http://creditsecret.org/. I used their services for credit repair from medical debt and I have friends who have totally erased the bad student loan debt because collections agency have broken the laws surrounding the proper ways to collect on bad debt. We have rights and they have laws they must follow if they fail they must delete! Read up on the laws! (FDCPA and FCRA). I can share the ebook with you if you'd like and share my story about how I went from a mid 500's to over 720 in less than a year. Took a lot of sleepless nights and reading up on my rights under the FCRA and FDCPA (fair credit reporting act and Fair Debt Collections Practices Act)
As far as the ones that she's current on my best advice would be to contact them and negotiate an income based repayment option. Under Pres Obama, he signed this into law giving student loan borrowers the options to repay student loans based on their income and or no income by stretching the terms out etc etc etc.
With respect to both my suggestions, DO NOT PAY SOMEONE TO DO ANYTHING FOR YOU! Do not pay a credit repair agency to help her fix her credit as she can do it herself with the book I have and DO NOT PAY A STUDENT LOAN NEGOTIOATIER as she can negotiate herself based on the laws that PRES OBAMA signed into law. She must read up on the student loan forgiveness program and Income based repayment plans by Pres Obama
Let me know if you want that book. I'd be more than happy to help out because all I want is for all of us to be the best we can be.
Also, look into student loan consolidation with great lakes student loan servicing. I consolidated 10 student loans that were all 30 days late.
I don't know about the private loans, but at least for the $30k federal loan, she may qualify for several different federal loan forgiveness programs. You can find them here:
Check out #2 through #5 as those require little effort. The terms are quite favorable and I believe your girlfriend may not have to pay much on that loan due to her debt load. However, I believe the window of opportunity may be narrow due to future uncertainty of the viability of the program and changing political influences in the coming years. But as far I know, if your debt load is high, you may not have to pay back most of your loan. Caveat is that it takes something like 20 years for it to be forgiven and you have to pay taxes on the forgiven amount, but at least your girlfriend can see the light at the end of the tunnel if she qualifies for any of those plans.
My wife is currently going to pharmacy school and both her and I have some doubts as to whether she will actually work or not, or if she does whether it will be full time. I'm not even worried about the $250k+ in debt she'll incur in the next 3 years because she'll qualify for the program under its current criteria if she works part time. That's about $60k/year which is close to where your girlfriend is at working full time.
My advice is to re-consider refinancing the federal loans despite the high interest due to the existence of these programs. On the other hand, that 12% private loan is pretty scary.
Docupop is a great student loan evaluation, consolidation and forgiveness tool.
Move from CA, get on a budget, buy a beater, stop eating out, increase your skill set in the marketplace $$.
@BruceEdwards I too am in this situation. My I know of this book you speak of? I have no idea of what I'm doing. Greatly appreciated!
Heather Jarvis is a student loan expert. Maybe she can help?