Student Loans and Credit

Anonymous · ‎05-10-2007

I have several student loans on my credit report. Of course on top of all that each one is listed seprate so it may be:

Student Loan $800

Student Loan $2000

Student Loan $1500 etc...

I plan on going to grad school as well so is there anyway I can keep my credit score pretty decent with several deffered installment loans?

Message Edited by Diamond on 05-10-2007 10:34 AM

Anonymous · ‎05-10-2007

@Anonymous wrote:
I have several student loans on my credit report. Of course on top of all that each one is listed seprate so it may be:
Student Loan $800
Student Loan $2000
Student Loan $1500 etc...
I plan on going to grad school as well so is there anyway I can keep my credit score pretty decent with several deffered installment loans?

Message Edited by Diamond on 05-10-2007 10:34 AM

Sure...as long as you keep current on them.

Now a prospective mortgage or auto lender might get a little nervous seeing you have so many outstanding loans, but FICO isn't going to ding you...as long as you successfully juggle all these balls without dropping any.

A piece of advice from someone with a financial management diploma from Screw U. (also known as the School of Hard Knocks): delay grad school for a year. Pay off at least some of these loans. Trust me: Grad school will still be there in 2008. You don't want to graduate facing a mountain of student loan debt.

Boswd · ‎05-10-2007

and these are the one loans you don't mess with. there is no taking you to court to try and get a judgment, they just go straight for your pay and taxes without warning.

Plus like it is listed on your CR each one seperate even if you are paying off to the same lender with the combined balances so you think it's really one balance. So not the case when you default them, each loan for each semester is listed seperattly bringing up multiple acccounts defaulted and sent to collections where collections list's each one seperate as welll. It just destroys your credit report. As you guessed, I've defaulted mine. Never got to the point of wage garnishment, close though, but all the Trade Lines are there and aren't going away anytime soon.

Moral of the story, don't mess around with student loans, pay them back on time each month.

Anonymous · ‎05-10-2007

@Boswd wrote:
and these are the one loans you don't mess with. there is no taking you to court to try and get a judgment, they just go straight for your pay and taxes without warning.
Plus like it is listed on your CR each one seperate even if you are paying off to the same lender with the combined balances so you think it's really one balance. So not the case when you default them, each loan for each semester is listed seperattly bringing up multiple acccounts defaulted and sent to collections where collections list's each one seperate as welll. It just destroys your credit report. As you guessed, I've defaulted mine. Never got to the point of wage garnishment, close though, but all the Trade Lines are there and aren't going away anytime soon.
Moral of the story, don't mess around with student loans, pay them back on time each month.

That's exactly why I recommended the OP delay grad school and get a job. Even delay two years if need be. Far better to go into grad school with $5000 in savings than $10,000 in student loan debt. And you're right about student loans being a "superdebt." Better to borrow money from the Mob...at least you're clear on where you stand.

Anonymous · ‎05-10-2007

I'm so confused. I want to go ahead and go to grad school but I'm afraid I will have like a million different tradelines since they list them like that. It doesn't help I'm finishing my Bachelors'd Degree 10 years after I initially hoped. It seems like once I get out of consumer revloving debt, then I'll have all installment debts, student loans, mortgage-because we want to buy a home in October. The debt cycle never ends, I need a full scholarship!

Anonymous · ‎05-10-2007

If these are all federally guaranteed loans, you can easily consolidate them into one loan once you're preparing to enter your repayment, which will also lock in the interest rate you'll pay. You'll have a zillion closed tradelines, and just one open installment for the new consolidation loan.

Anonymous · ‎05-10-2007

Yes...definitely consolidate them. This will give you a better idea of where you stand. Again, I would urge caution in incurring additional debt. I know it's frustrating, having to wait another year or so to start grad school, but trust me when I say debt has a way of sneaking up on you...

Tuscani · ‎05-10-2007

I would go to grad school. Educate yourself now. Pay off debt after you get that killer job!

Boswd · ‎05-10-2007

1. don't worry about the trade lines, student loan debt is considered "good debt" you are building equity in yourself.

2. It may be easier just to go straight to Grad school, you current student loans will be deferred until you are done. Plus it is alot easier for people to keep it going when it comes to school. I can be very hard to get back into the swing of things once you been out for a while.

3. Explore all financial options, find out what grants are available, scholarships you may qualify for. Go to your schools financial aid office and they will have all that info. also do you plan on attending a Private school or State school? You could save thousands of dollars by going to a State school.

The debt for school is going to be there no matter what you choose. NWM gave solid advice about getting your current student loans down first. Not bad advice at all. But it depends of your major as well.

But many, upon many students go straight from undergrad to grad school and don't have any problems. Plus I do believe, at least it was in my day, that you have up to a year once you are out of school to defer your first payment. Just set up a payment plan that is going to be affordable to you each month, even if that means paying off the student loan will take many years, as long as you factor that in you montly budget and DON'T DEFAULT. LOL LOL I know partners in my Law firm I work at that are still paying off their student loans. As long as you pay each month on time, student loan is good debt.

I would say go straight to Grad School. and Get your loans consolidated

Anonymous · ‎05-10-2007

@Tuscani wrote:
I would go to grad school. Educate yourself now. Pay off debt after you get that killer job!

Depends on what the OP is getting a degree in. A degree is NOT a guarantee of employment. Not even close. A degree simply tells prospective employers that you had the intellect and discipline to earn a college degree, and have more knowledge than most in that one area. That's it. It's not a Gold Key to the Executive Washroom or anything of the sort.

The idea of "oh I'll get a degree and then I'll be making beaucoup money and have no trouble paying off my student loan" has been the source of countless financial train wrecks among the young and impressionable. Those famous last words are right up there with, "They couldn't hit an elephant at this distance--"