Student Loan Related

I Was Making a High Income But Since I Was Laid Off My Student Loans Are Killing Me

Calculator with Figure
Written by Steve Rhode

Question:

Dear Steve,

I am 55. $100K in federal student loan debt. $70K 2002. MBA- ASC is the current holder. $25K 2012-advanced grad. studies. loan held by navient 2010- short sell on condo, filed bankruptcy to prevent foreclosure. was laid off in 2011 at salary of $125K. Live in Boston- pure living expenses-live week to week. Have accumulated about $35K in 401K. I have been paying on that loan since 2003 and except for being laid off and one other 3 month period of not working have paid that loan and it is exactly the same after 14 years.

Are there any options for me? especially on the $70K. I have both loans on extended repayment plans -not the best idea but would not have been able to pay otherwise. Is there any hope that these loans will not outlive me? Thank you.

Susan

Answer:

Dear Susan,

It sounds like you’ve had quite a ride over the past decade. Since your income now is so low the most logical approach for these federal student loans would be to drop them into an income driven repayment plan. This will give you a lower payment than a graduated repayment plan.

In fact you can see exactly what your repayment options would be and the payments if you use the online repayment estimator.

Under the Income Driven Repayment plans you have several options and your payments can be as low as $0 per month and keep you current. If you are ever planning on getting married in the future I’d stay away from the PAYE and REPAYE options if you would file a future joint tax return.

So this would leave you with the IBR (Income Based Repayment) plan as the logical option.

We’ve already entered into a time when it is becoming more common for student loans to outlive debtors. That ship has sailed. Even Social Security payments are getting garnished for old delinquent federal student loan payments.

READ  Interest Rates on Federal Student Loans to Double

These income based programs are not perfect but they will give you an option to make it easier to make it through the month.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.





About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

Leave a Comment

Scroll to Top