Is It Illegal For Me to Have to Pay More Than Half My Monthly Income to Student Loans? – Kandyce

“Dear Steve,

I graduated from four years abroad in 2009 with about $180,000 in Private Student Loans with Sallie Mae. On top of my federal student loans and loans sold to the Department of Education, I am currently paying almo0st $1100 a month, on a “2 year, interest only” repayment plan. Sallie Mae’s only other options for me after hours upon hours on the phone are a $150, 3 month forbearance fee with interest to still to acquire or go back to school and get in more debt while deferring these loans. This is well over half my monthly income working in commissioned sales because I have yet to find a good paying job in California’s economy, and with the cost of living so high, I cannot even afford to live on my own because I am drowning in student loans.

Since it took almost a year just to find a steady job, I also acquired nearly $15,000 in debt from a start-up business, who clearly took advantage of my good credit at the time and living expenses. I have worked with credit-card companies as much as I can, but I feel like I have no place to go that will not take advantage of me and no one who really knows enough to help me recover from this situation.

My question, first and foremost, is whether or not forcing me to pay over 50% of my monthly income to student loans is even legal, when even the federal student loans required my tax statement for income based options.

My second questions of course are if you know where I can go to get sound debt relief advice for both private student loans and credit card debt, without screwing me over. I am wiling to make payments and understand I have a lot to pay back, but I don’t know if consolidation or bankruptcy are the best options, or even options at all, or if someone can just help me to make the payments more manageable.

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Thank you kindly for your time,


Dear Kandyce,

I’m not aware of any limitation on how much of your income can go towards student loan income. Private lenders certainly offer few options for dealing with it but the good news is the government loans have the Income Based Repayment Program (IBR).

I’d suggest you call your government loan servicer and talk to them about the IBR plan. It might give you some breathing room.

The bigger issue is you need to get back to paying your full Sallie Mae payment. Putting it on temporary hold still let’s the balance build and is not a solution.

Even though you have $15,000 of credit card debt, which to some may be a small amount, it would still be a good idea to click here to find a local bankruptcy attorney and talk to them about discharging that credit card debt and give you a legal second chance and fresh start.

If your credit card debt was gone and you were paying the full Sallie Mae loan payment, would you be able to pay your government loan payment? If so, that might be the breathing room you are looking for.

Post your answer in the comments section below.


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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.
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