Subscribe to our mailing list

X

Should I Quit Paying on My Student Loans?

By on July 18, 2018

Question:

Dear Steve,

I am $91k in private student loan debt (20 year term). I am $28k in Federal student loan debt. My interest rates are good as far as student loan interest rates go – under 6%. I had no idea about loans, interest, and finances before college and I went to a 4 year college for sports.

I regrettably went to a 4 year college that was expensive and I lived there. I have a good job and can afford the payments. Almost all of my money goes towards interest though, the principal is barely moving. It just sucks throwing all of this money away. I can save some because I live at home.

Should I keep paying it or is it worth quitting on my student loans?

Thomas

Answer:

Dear Thomas,

Only you can make a determination if you are comfortable with the risks and possible rewards for intentionally defaulting on your private student loans to attempt to settle them. On the federal loan front, intentionally defaulting on those makes no sense.

I understand how a young adult is not prepared to make an informed decision about the consequences of this large amount of debt you were offered. On the other hand, you did enter into the loans and agreed to repay them according to the lending agreement.

There is no easy out here. You either increase your payment each month to reduce what you owe or you consider a strategic default which will negatively impact your credit, place you at risk of being sued, and hope that a suitable settlement can be reached.

Any option you select, outside of the terms set in the agreement you and the lender mutually agreed to carries some risk. For those who already can’t afford to make the payments, the risk is different than for someone in your position.

The question you probably need to ask yourself is if your desire to deal with the loans in this way is based on necessity or desire.

READ  How Do I Strategically Default on My Private Student Loans? - Eric

For more information strategically defaulting on your private student loans, see this post.

morehelp1
Choice1 Choice2 Choice3 Big Hug!
Get Out of Debt Guy - Twitter , G+ , Facebook
If you have a credit or debt question you'd like to ask just use the online form .

Last step, fill out the information below or call us for Priority Assistance.

What problems are you having with your report?

Your first name is required. Your first name is required to be at least 2 characters. Your first name cannot be longer than 50 characters.
Your last name is required. Your last name is required to be at least 2 characters. Your last name cannot be longer than 50 characters.
Your email is required.
Your phone is required. Your 10 digit phone number is required.
Your state is required.
Your age is required. Your age must be greater than 18. Your age must be less than 100.

By clicking on the "Contact Me" button above, you consent, acknowledge, and agree to the following: Our Terms of Use and Privacy Policy and to receive electronic communications. We take your privacy seriously. That you are providing express "written" consent for Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS - charges may apply), even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list. Consent is not required as a condition to utilize Debt.com services and you are under no obligation to purchase anything.

By clicking on the “Contact me” button above, you consent, acknowledge, and agree to the following: (1)That you are providing express “written” consent for Lexington Law Firm, Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS – charges may apply), or dialed manually, at my residential or cellular number, even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list; and (2)Lexington Law’s Privacy Policy and Terms of Use and Debt.com’s Terms of Use and Privacy Policy. Consent is not required as a condition to utilize Lexington Law or Debt.com services and you are under no obligation to purchase anything.

About 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.

One Comment

  1. Thomas

    July 18, 2018 at 1:05 pm

    Asked about stopping payment on my student loans.

Share a Comment / Leave a Reply

%d bloggers like this: