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Registered: ‎05-15-2009
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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?

[ Edited ]
i aggre with ..thats the best thing to do if you have the money to pay for it..this would help decrease your liabilities
Message Edited by llecs on 05-29-2009 01:42 PM
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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?

[ Edited ]

nkkiegem123 wrote:
i aggre with ..thats the best thing to do if you have the money to pay for it..this would help decrease your liabilities

I disagree.  But maybe it's because I'm not certain about the OP's fundamental goals with regard to the student loan.

 

If the goal is to be debt-free, then yes, paying it off now would be fastest way to be debt-free.  BUT....if he doesn't have a job, and has had problems with economic hardship in the recent past, then I don't see how suddenly parting with >$5000 would be a smart move at this time.  Once that check is cashed, there's no way of getting it back.  He is under no obligation to pay it off right now, so why do it?  It could just make his cash situation worse.  That $5000 could go to pay for rent, food, and job search expenses.  Also, the interest on student loan payments is tax-deductible, even if you don't itemize deductions (line 18 on form 1040-A and line 33 on form 1040).

 

One thing I'm not clear about - is this an original student loan, or is it a collection account?  If is a collection account, then what I wrote above might not apply.

 

Message Edited by llecs on 05-29-2009 01:43 PM
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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?

sallie mae wont lower my payments , why do you say they will ?? I need the magic words..... Spooky
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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?

No wonder the economy is in such a mess.  People like you borrow money from the government to get an education and then when the time comes, you/they don't want to pay the money back.  In my opinion, if you had no intentions of paying the money back, then you never should have borrowed it.  It's called being a responsible and honest adult, something this country is obviously lacking.  Do you think you are entitled or something?  What makes you feel like you are so special that you should just be able to blow this debt off because you haven't found a "real job"?  Why should you be exempt when everyone else has to pay back their loans?  You should have let someone else borrow the money, someone who wasn't going to try to figure out a way to basically steal from the American people. 

 

As far as your job situation, let me explain something to you.  Your lenders have something called a "hardship deferment" and it is designed for people in your situation.  You should look into it.  I have over $100K in student loan debt, was laid off from my job in July and now I may wind up getting laid off again from my current job.  I feel for your job situation but what you are trying to do is wrong and dishonest.  I am not trying to be offensive, I am just voicing my opinion.  If you didn't want it, you shouldn't have posted the question on this forum.

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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?

Here's your VERY SIMPLE answer:  You elected to go to school.  You elected to pay for that with a student loan. You USED those borrowed funds.  You WENT to school with those funds and you obtained a degree.  When you wanted to borrow the funds, you were not forced to PROVE that you had chosen the right field, would succeeed, etc.  BOTTOM-LINE (Like it or not):  You OWE that money, and if you are worth anything at all, you WILL REPAY that money... if for no other reason than PRINCIPLE!  I realize that principle's are basically not tought in many schools/homes anymore, but that really is what it comes down to.  You OWE the DEBT, now PAY it.  I don't care if it takes you 30 years.
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Registered: ‎06-23-2008
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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?

As everyone else said....Don't think this will disappear off your records.  It's an unusual type of loan.

 

However!!!!!!  Like you, I was delinquent on my loan when I got out of college.  This was about 1991 or 1992.  They bugged me for a while....I started making payments about 6 years or so after that.  I stopped and never worried about it since I had terrible credit anyway.  I was young, stupid and didn't care about my credit rating. 

 

Fast forward several years....Now....40 years old, I got married 3 years ago, started to care about my rating last year when I was surprised when I got approved for a loan from Honda Finance for a brand new car.  Found this website.  I was able to get the car loan and a capital one credit card and after a few months....about 6 months to be exact...I got a call from one of the collection agencies that the government now uses to get delinquent loans to start paying again and this time I took it serious because I had "adult" and mature obligations now that I have a wife.  

 

So....here's the deal.  When I checked my credit report it was NOT on there.  The collection agency gave me two choices....1.  Pay a lum sum which was a little cheaper than option 2.   OR 2.  Make payments on a higher balance and after 12 months my account would be turned BACK OVER to the government where the account would be placed in good standing and not only that...when they turned it back over to the government they placed it on my credit report in good standing and they back dated it to 1991 or 92 and now my oldest good account instead of being  5 or 6 years old is now 18 YEARS OLD!!!  which is GOOD for my credit rating.  I did not know this at the time nor did I know what would happen if I had taken the first option.

 

IMPORTANT****** What I didn't know and what I later found out on the internet is IF I had chosen to pay it off in one lump sum to the collection agency then it would have been placed on my credit report and it would have been marked as "paid late" which is bad for your score.  Making payments and having them turn it back over to the government will put it on your credit report in good standing AND it will be back dated to when you first had it.  At least that's how it was with me.

 

DO NOT chose the lump sum payment method.  Go on the monthly payment plan, it will be a higher overall balance, but it will appear as a good, paid on time account on your credit report and increase your FICO score.  You can make higher than the minimum payments...or pay it off alot earlier after that.  Which is what I'm doing now.  Just depends on how much you value your FICO score.  You can save money and have it lower your score or pay more and have a higher score.  

 

I'm not saying what I'm writing is 100% accurate, but it was in my case and from what I've read about the college loans and collection companies collecting these delinquent loans.   I do know that they give you every chance and option in the world...if you mess it up then your only screwing yourself.  My overall loan was only about $9,000.  They didn't ask for any proof of income, bill statements or anything.  I gave them a sad story and was only obligated to pay $110 a month.  After about 9 months or so they turned my account back over to the government and it was placed on my credit report as a 18 year old debt in good standing and paid on time and increased my scores about 10 points.

 

Hope this helps.

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Registered: ‎01-19-2009
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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?

In case you weren't aware "Jack" student loans are garnishable.  Not only is it the best kind of loan to have, because the government will always work with you, but unfortunately for people who don't pay...they are one of the few types of loans that can be garnished.  So, to answer your question, it will not get erased from your credit report like other debt, but they will begin taking any income you DO make in the future, until the loan is repaid.  Why not just pay it?  You took out the loan, so you should pay it back...just like the rest of us.

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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?


Libragirl71 wrote:

No wonder the economy is in such a mess.  People like you borrow money from the government to get an education and then when the time comes, you/they don't want to pay the money back.  In my opinion, if you had no intentions of paying the money back, then you never should have borrowed it.  It's called being a responsible and honest adult, something this country is obviously lacking.  Do you think you are entitled or something?  What makes you feel like you are so special that you should just be able to blow this debt off because you haven't found a "real job"?  Why should you be exempt when everyone else has to pay back their loans?  You should have let someone else borrow the money, someone who wasn't going to try to figure out a way to basically steal from the American people. 

 

As far as your job situation, let me explain something to you.  Your lenders have something called a "hardship deferment" and it is designed for people in your situation.  You should look into it.  I have over $100K in student loan debt, was laid off from my job in July and now I may wind up getting laid off again from my current job.  I feel for your job situation but what you are trying to do is wrong and dishonest.  I am not trying to be offensive, I am just voicing my opinion.  If you didn't want it, you shouldn't have posted the question on this forum.


This is a reminder to be friendly and supportive when posting in the forums. Thank you for your understanding.

 

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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?


Direct wrote:
Here's your VERY SIMPLE answer:  You elected to go to school.  You elected to pay for that with a student loan. You USED those borrowed funds.  You WENT to school with those funds and you obtained a degree.  When you wanted to borrow the funds, you were not forced to PROVE that you had chosen the right field, would succeeed, etc.  BOTTOM-LINE (Like it or not):  You OWE that money, and if you are worth anything at all, you WILL REPAY that money... if for no other reason than PRINCIPLE!  I realize that principle's are basically not tought in many schools/homes anymore, but that really is what it comes down to.  You OWE the DEBT, now PAY it.  I don't care if it takes you 30 years.

This is a reminder to be friendly and supportive when posting in the forums. Thank you for your understanding.

 

--fused, myfico moderator

Credit Profile -
FICO 08 Scores (03-26-2015): EQ 814, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26 years ~ AAoA: 13 years ~ Util: 1% ~ Inqs: EX 1, EQ 1

Credit Cards: Amex BCP ~ Amex Clear ~ Amex Platinum ~ Barclay Ring Mastercard ~ Chase Freedom Visa ~ CITI Dividend Platinum World Mastercard ~ FIA Fidelity Investment Platinum Visa ~ First Hawaiian Bank Gold Visa
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Re: Should I pay off my student loans or just wait until 2012 for it to get off my credit report?

For those of you who believe that it's cut and dried: it's not. For those of you who are extrapolating from your own situation, please remember that others may have different experiences.

 

First off, this country is UNIQUE in expecting that our young people will go deeply into debt to finance their own higher education. MOST other first world countries subsidize, to a greater or lesser extent, the education of those who have the intelligence and drive to achieve a college education. They realize, at a national level, that an educated populace is critical to the long term success of their countries. The US needs a sea-change in this attitude, or we will have a rigidly defined line between those who can afford college and those who can't. The fact is that the government was a better lender than most of us and our children are forced to deal with, thanks to the combined forces of lenders like Sallie Mae and the Republican Party over the past 15 years.

 

Second, while it's true that if you accept the terms offered you for paying off a loan at a lower amount, that it will likely be reported in a negative fashion, it is NOT true that you are required to accept those terms. I can think of several ways to deal with the collection agencies. A: DON'T. Go directly to the arm of the gov't that gave you the loan in the first place. Tell them that you had been contacted by XYZ Collection Agency, and that you want to pay off your loan, but you want to deal with them directly.  B: using the dollar amount you were offered as a starting point, negotiate DOWN from there to what you will offer to pay. Say they offered you $4500 on a loan that is now at $6000, but, when you had stopped paying on it, was at $2900. Offer $2500. The worst they can do is say no, right? What they will PROBABLY do is to offer some figure greater than $2500 and less than $4500, which you can either accept or counter, again. C: Once a figure is agreed upon, tell them that you will send them the check for it within 5 business days of receiving a letter, signed by an official at the agency, denoting the terms of the payoff agreement, INCLUDING (this is critical) that it will be reported to all credit bureaus as "paid in full on time". Yes, you can do this and yes, it's a good and reasonable thing to do. Not only with student loans, but with many of the usurious credit card companies. You will, most likely, not be able to have a card with that company in the near future, but if you are behind on your payments, or even if you are current, but have been maxing out your limits, they may be chasing down the limit, anyway.

 

As consumers, we do need to use credit wisely. That said, credit card companies and companies that loan money for education make hundreds of billions of dollars on fees and outrageously high interest rates. Not because it's appropriate or reasonable, but because they can.  

 

 

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