I rode the emotional roller coaster with all of my student loan lenders today. Since I started taking stock of all my loans including their balances and monthly payment amounts, I said to myself “why stop there?” So I called Sallie Mae and found out what type of loans I had – private or federal. I had a slight glimmer of hope in my tone as I had read about extended repayment terms being able to lower payments. So I asked the rep if any of the loans qualified for extended repayment terms. The rotten fruits of my labor are in the chart below.
Ugh. Now, I’m even more depressed. Two of the loans don’t have a cosigner and are already at the max repayment term so I have no choice but to default on those loans. Not because I don’t want to pay, but because I can’t afford to pay. Unfortunately, those 2 loans are also federal loans so they’ll probably end up garnishing my wages and my professional license could be in jeopardy (seems ridiculous b/c I need my license to make money and if I don't have it I can't pay you anyway). But right now, my focus has to turn to the loans that my parents are cosigners on. I absolutely can’t default on those and those are the loans with the highest payment amounts. The only loan I’m not worried about is Access Group as that balance is reasonable and I can afford the $60 a month payment even if I end up working at Target. I'll see what I can do about paying that balance off in the next 9 months (270 days) – which coincidentally is how long it will take for the two federal loans to be considered “in default.”
I stumbled upon some decent resources so I could know what to expect during the default process: The US Department of Education Debt Collection Service publishes a guide called Guide to Defaulted Student Loans and Defaulting on Student Loans on www.Finaid.org. FinAid.org also has information on Student Loan Debt Settlements. I was quite surprised to find Student Loan Borrower Assistance as it provided the most useful information. Definitely bookmarked that site. I also have to say I was super excited when I stumbled upon IBRinfo.org.
IBRinfo.org was created by the nonprofit, nonpartisan Project on Student Debt to help student loan borrowers learn about two new federal loan programs: Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF). Like the tension build up before the slaughter in a horror-film, I ecstatically filled out IBRinfo's web-based calculator. I put in all the information, which I conveniently had at my finger-tips thanks to my nifty spreadsheet (softly play music from Jaws). I eagerly pressed calculate and awaited my fate (volume of Jaws music increases). Then suddenly, the fatal bite from the unyielding student loan beast – “Based on the information you have provided, you would probably not qualify for IBR.” Damn! Damn! Damn James! On a whim, I kept increasing the number of dependents to see how many kids I would have to have in order to qualify. 3? No. 4? No. 5? No. 6 – Ding! Ding! Ding! Correct!! I would have to have 6 kids in order to qualify for a payment of $640!!! Does this reinforce a welfare mentality or what? Because if I had 6 kids I certainly would not be able to have a job other than my own reality show about having 6 kids and not being able to afford anything (I must note that reality shows pay WAAAAAYYYY more than any career in the legal profession so this is now a viable option for me; I wonder if I can get my husband drunk enough).
I would almost be better off with 6 kids and taking a lesser paying job (but seriously, is $86K a lot these days? That’s before taxes and deductions – after all that is taken out I’m bringing home about $57K THEN all the bills start). Just another reason why I can’t afford to be middle class. I am living the statement that Today's generation will most likely NOT be better off than their parents. Forget the 20 somethings - what about the 30 somethings!!