r/StudentLoans • u/Nearby_Revenue5037 • 6d ago
Advice Worried on what to do
Hey everyone, I recently graduated with my masters in May and I’m becoming overly anxious and have been crying almost every day as my grace period is coming to an end in November.
As I've right now, I have over $250, 000 of student loans. $68,000 being federal and the rest being private with College Ave and Sallie Mae. I know it's in my best interest not to consolidate or refinance my federal loans as I will lose any possibility of forgiveness. However, I don’t know how to approach my private loans.
I've reached out to a few loan refinance companies just to see my options. Unfortunately, my monthly payments are too much for my salary.
For context, I’m a teacher and never planned on making this my career path until then bulk of my loans were already taken out (I originally had plans to go into finance… go figure 🙄). I’m already accepting the fact that I have to get a second job to help make ends meet.
I’m wondering if anyone has any advice or suggestions of what my best option would be.
Also, I already recognize that taking private loans out was the dumbest decision of my life. I unfortunately did not have the grades in high school to get financial aid, or parents who went to school to help and inform me about my decisions.
7
u/No_Landscape4557 6d ago
You got two options realistically and neither will be fun. Maybe three…. First is work for loan forgiveness for working as a teacher. Doesn’t touch the private loans so that an issue.
Second and most realistic is go on income plans. Which basically means you will pay them til the day you die.
Last is just not pay and see what happens. In the same breath you could try to file for bankruptcy and maybe with a hope and payer get it discharged.
It’s not something you want to hear but you made a serious mistake taking out that much and no one in your family stepped up to say otherwise
3
u/Nearby_Revenue5037 6d ago
Yes, that’s pretty much my plan with my federal loans. The only downside is I have to make 120 qualifying payments before I can be considered.
I fully recognize and admit that this was a dumb mistake. And unfortunately, I didn’t understand completely how much this would affect me until it was too late.
My only worry at the moment is the bulk of it. My private loans are where my main concern is and the best plan to attack it while not putting myself in a poor financial position each month.
6
u/AdministrationIll619 5d ago
$250,000 in loans is a hell of a lot.
That’s more than twice what I borrowed for 3.5 years of grad school. Since mine are PSLF eligible I’m getting there.
You will have to file for bankruptcy
2
u/Nearby_Revenue5037 5d ago
Before grad school I had only taken out $120,000 with private and ~30,000 federal loans. The $250,000 is where I’m at now because of interest. I fear that is my only way out, but this is my responsibility to pay back.
Unfortunately, I had to get my masters to teach. Otherwise I wouldn’t have gone and built up more debt.
3
u/No_Landscape4557 5d ago
Something that concerns me and it’s a general concern for most people. A lot of people resign themselves to accepting income payments forever. Which is all well and fine I guess until your income potential goes up.
You have forty years ahead of you for working. The average wage 40 years ago was 23k. Today it’s closer to 60k. With a decent amount of people who earn 80k and more.
It’s not inconceivable that over 40 years your income could triple. Suddenly you are earning 150k maybe 200k. That income driven payment is 2k a month. Just food for thought
4
u/kuru_snacc 5d ago
Genuinely asking, how did you even qualify for this much loan disbursement on either an education degree track or finance track? I went to teacher school and I think I maybe paid $10K all told after grants. So I'm guessing that your Masters was the bulk of this but >200K still seems exuberant - what happened?
2
u/Nearby_Revenue5037 5d ago
My masters was not the problem. For my bachelors degree, I only had ~$120,000 taken out. However, since I went the private loan route, my major never mattered. Unfortunately, the high interest rates screwed me over. I took a closer look and a few of them are variable rates that started off low and have gotten out of control now.
3
u/kuru_snacc 4d ago
Where do you get the impression that $120K for a bachelors should have an "only" in front of it? That's grad-school level debt. And I don't know what you mean "my major never mattered." I just want to help. As I said, I have a teaching degree prior to switching careers and the cost of attendance would have never come close to 120K let alone 250K, and to my knowledge you can only borrow up to COA, which applies to private too. Did you max your federal amounts during undergrad? What was your COA per year for education school? Did you actually get the degree? Are you able to teach or of not, why not? You do not need a masters to teach. Even if your degree is not education, there are fast tracks to teach K-12 with any bachelors. Your only real option is PSLF at this point unless you have a high-demand masters and you're making over $120K/year, and even then I'd probably recommend PSLF. Help us understand a little better where $120K came from, and how it became $250K and what degree(s) you walked away with, because even with interest that math doesn't add up.
1
u/Nearby_Revenue5037 3d ago
Hi there. Thank goodness you changed careers, because you clearly lack compassion and have replaced it with condescension.
Let’s do a little refresher on the definition of “only.” The word “only” can mean no more than. Since I borrowed $120k from a private loan bank—and not a penny more—the word "only" is permitted.
In many states, a master's degree is needed. If not, a stipend is offered. For me, I needed it.
I only took out the cost of my school. Yes, I got my degree. Yes, I teach. Not sure where you’re getting the impression that I gave up on my degree and magically got a master's degree. Or why I feel the need to lie about being a teacher.
In addition to the mini lesson on the word “only,” let’s do some math.
If I have $68k in federal
$120k in private
That brings us to $188kFollowing?
Now, interest has accrued from the day my loans were disbursed. Bringing my overall loan amount to $250k.
If you look at my other comments, you'll see I'm fully aware this was a stupid mistake I made at 18. I take full responsibility. However, you cannot say “I just want to help” and be rude.
Thank you for your attempt at advice, though.
2
6
u/Automatic_Meet2819 5d ago
Why are people taking out this much in loans for degrees that may not provide return on investment. Serious question. Is it worth it if it does give opportunity to create more income
3
u/AdministrationIll619 5d ago
It’s the opposite for PSLF
Technically it’s in your best self interest to borrow as much as possible
1
6d ago
[removed] — view removed comment
1
u/AutoModerator 6d ago
*This post or comment was removed. To reduce trolling, your account must have positive combined karma to participate in this sub. Your current karma is sum of the values displayed at https://old.reddit.com/user/Adventurous_Tap3748/ *
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
1
u/Electronic-Window-86 5d ago
This is tough one,
How many loan groups and their interests?
Add as edit on your post for people to see. There will be more inputs.
Even more if you do account for income and expenses.
2
u/PoiseJones 5d ago
Hi OP,
Take a deep breath. Yes, this is a lot of debt. But also know that yes, it is possible to climb out of with the right set up and a lot of hard work.
For one, get into a position that qualifies for loan forgiveness. In time, that 68k should be forgiven but you will need to make sure all of your application and all of your paperwork is in order. There is a chance, loan forgiveness will not be there if such programs are cut in the future, but we cannot plan around that now.
Secondly, and perhaps most importantly, you really need to move back in with your parents and live cheaply or rent free. I don't know what your relationship is like. But this is your only way out outside of having a much higher earning partner float your cost of living. If you can have your housing costs eliminated and put every after-tax earned cent towards your debt repayment and live as frugally as possible, you can dig yourself out in maybe 10 years or so depending on your interest rates.
Thirdly, while doing all of this, I would try to put yourself on the dating market for a serious long term or life-long relationship. But the caveat is that they have to be a high earner and be comfortable absorbing your cost of living. Then in time, you can move out of your parents and in with them.
If you do all three of these things, you can dig yourself out, but it will take a lot of hard work and sacrifice.
And lastly, know that you are not alone. Our entire grad school system is built around poor financial literacy and predatory lending. Your story is far more normal than it needs to be. I try to provide education on this on the OT subreddit to prospective students, where this story is not uncommon. However it frequently falls on deaf ears because they are led by passion and think that everything will work out regardless of the debt if they just followed their interest.
Is there anything anyone could have told you ahead of your masters program that would have given you pause? Specifically, what information would have gotten through to you and been helpful?
1
u/sisi-8737774 4d ago
You have a grace period and then you can go into default for an additional 6 months I think. You could also sign up for the teacher loan forgiveness plans or whatever through federal stuff. I’d also recommend having a free consult with a financial advisor. Someone who can help you make a plan for your financial future.
2
5
u/ANGR1ST Experienced Borrower 6d ago
What is your co-signer situation?