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Should I Use a Student Loan to Pay Off Debt? – Nicole

“Dear Steve,

I moved to California in order to finish college two years ago. I racked up some credit debt on the trip and in the first few months while getting established here. (around $6,000). I have not been able to make any headway on the credit debt because of the high interest rates (29%) which was the default rate after the low rate expired. I also, have a car loan and 2 student loans that are deferred (student loan debt is $2,000 on a perkins loan, and $4,000 on a stafford)

I am ready to transfer into a california university this fall and have been accepted with the requirement that I take another course. It is very demanding and I have to take it in a shortened session. I will have to reduce my hours at work. Should I take out a student loan to pay my bills? How do I continue to manage my bills when I go to the university? I know I will not be able to work full time.

I was thinking about a dmp, but I am worried that would affect my ability to get student loans. Plopping all of my credit debt onto student loans scares me. I know I will have to take student loans out, but I want to manage them wisely and not be stuck with a balooned amount of student loan debt.

What would actions would you recommend in order to manage my bills and finish college?

Thank you,


Dear Nicole,

It would be better to saw a leg off than put unsecured credit card debt onto a student loan.

I’m not convinced that a debt management plan would be the best choice since a DMP may reduce your interest rate but the monthly payment will stay about the same. But it never hurts to talk to a good agency and get their feedback on your situation. Click here for credit counseling information.

Is your concern with just the credit card debt or managing all of your required payments during this period? Please post a comment here and clarify that for me.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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About Steve Rhode

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.
  • Solar Street Lights

    Yeah, student loan has become an excellent opportunity to get some money to pay for either education or others.

  • domain name web hosting

    In my point of view, this is not a good idea. I think that paying off dept is a bad idea.
    I feel that private loan and this student loan are the worst idea.
    Thank you for sharing this information.
    web hosting service provider

  • http://Website nicole

    My main concern is finishing this semester and doing well in my classes. Therefore, paying my bills during this time period is the most important thing on my mind right now.

    • Steve Rhode

      By using the student loan to pay your bills you are converting those bills to long term debt that can never be discharged with bankruptcy and since you are getting a student loan disbursement I am assuming it is a Sallie Mae or private loan and those are the worst loans to have. They have zero options available in repayment if you find yourself in trouble in the future.


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