Post-College Debt - HELP!

[caroline312]

Hi everyone...

I'm really struggling with my post-college debt. I left school last year with $20k in loans from both financial aid and credit cards. I just don't know what to do anymore...I'm working paycheck to paycheck as it is and can only afford minimum payments. I feel as though I'll be stuck in debt forever Anyone have any advice that worked for them? I'm desperate!!

Thanks for any help you can provide!

Caroline from MA

"In three words, I can sum up everything I've learned about life: it goes on." - Robert Frost

[HHM]

Are your student loans in repayment...?

If so, you can defer payments for up to 36 months, or refinance in an income sensitive repayment plan. Anyway, there are many solutions for dealing with student loans.

How much of the $20k is student loans, how much is credit cards?

[caroline312]

repayment

No my loans are not in repayment because I want to pay them off and be done with them. Most of my debt is in student loans however some does fall under credit card debt. I am considering a debt management program so it can lift the stressful burden off my shoulders. Ive been researching some and have a list of few that I am considering. What do you think of non profit credit counseling agencies?

[stevie2012]

If you haven't already, be sure to consolidate straight away. After midnight June 30th, it will be too late. I'd also recommend a "graduated" payment plan once you consolidate. On 20K, you can take the loan out for 20 years and the payments can be as low as $60.00 a month for the first two or four years. It's always best to take the loan out for the longest period and choose the lowest payment plan. I say this because you can always pay more (there is a non-prepayment penalty on federal loans).

You do not - under any circumstances - want to consolidate your federal loans in a debt consolidation loan (combining credit cards and student loans). Reason? Your federal loan will turn into a private loan. Federal Student Loans have benefits (such as a three year deferment/forbearance) that private loans do not extend. Further, the interest rates on Federal Loans are almost always much lower than private debt consolidation loans, depending on when your student loans were disbursed (if it was after July 1998, you are good to go).

[HHM]

No my loans are not in repayment because I want to pay them off and be done with them. Most of my debt is in student loans however some does fall under credit card debt. I am considering a debt management program so it can lift the stressful burden off my shoulders. Ive been researching some and have a list of few that I am considering. What do you think of non profit credit counseling agencies?

Just to make sure were on the same page, when I ask "are your loans in repayment?", I am asking if you are required to make payments yet, you didn't mention whether you are just out of school or several years out of school.

[caroline312]

repayment

sorry for the confusion, I just graduated almost a year ago so I dont have any payments due yet but I want to pay them off asap. I am looking to move into a new apartment but I have other costs that seem to be adding up so I am just thinking ahead of how to get rid of those debts asap so I will be able to live a stable life.

[HHM]

Do you have other loans or credit cards with higher interest rates than you student loans. Because there are so many options with student loans to deal with short term cash flow problems, you should prioritize your debt by the cost of the debt (namely interest rate). If you're looking to pay things off, start with credit cards or other higher interst loans, it will be better for you and less costly in the long run.

You should look into consolidating ASAP as the deadline is July 1, 2005, you will also be able to utilize deferments.

You said you wanted to pay them off, but if you have no money (you say you are living paycheck to paycheck), exactly what were you going to pay them off with. This early in the student loan, settlement for a lesser amount is not an option, and credit counselers typically don't work with student loans, and you can't discharge student loans in BK. So your options are pay, deferment/consolidation, or default.

[Lightning]

You need to get those "other costs" down as much as possible. $20,000 in debt, most of which is student loans, is very manageable for someone with a college degree.

The fastest way to pay everything off is to put as much money as possible toward the debt. Get a 2nd job on the weekends, and put all that money toward the debt. Rent a smaller/cheaper place. With a decent job, and some shrewd financial moves, you'll be out from under that in a couple of years with your credit intact.

[Tgolfer123]

that's all good advice. my niece has the same issue as the original poster when she graduated from college recently. luckily, a friend of hers directed her to a website for debt management and it helped her out greatly. let me ask her about it and i'll post the link.

Tim

[Tgolfer123]

got it...it's www.incharge.org. she sends her highest recommendations for the program and said it was a lifesaver. good luck.

Tim