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Students loan too high. Advice on what to do

Regular Contributor

Students loan too high. Advice on what to do

My monthly payment on my student loans are about 700 dollars a month. I can only afford to pay about 259 a month. Half of the 700 is with navient and other is federal. I do not qualify for any payment arrangements since my interest rate is extremely low already. Ive almost defaulted twice. What options are there for me? If I could just file bankruptcy I would because I am sick of it already.

Starting Score: 520
Current Score: 627
Goal Score: 700


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Message 1 of 14
13 REPLIES
New Contributor

Re: Students loan too high. Advice on what to do

This is a tough situation. You should know that bankruptcy itself wont help with student loans.  You will need to file an "adversary proceeding" seeking discharge of your student loans.  There is no guarantee of a full discharge as you need to prove  to the court that by continuing to pay the student loans puts in an "undue hardship".  In order to prove this you will have to convince the court of three things: 

  • You wouldn’t be able to maintain a minimal standard of living if you were forced to repay the loan.
  • Your financial hardship would continue for a significant portion of the repayment period if you were forced to repay the loan.
  • You’ve made a good-faith effort to repay the loan before you filed for bankruptcy.

There is also "The Defense Against Repayment Provision" if you can prove to the Department of Education that your school commited fraud in order to recruit you.

 

Good Luck.

Message 2 of 14
New Contributor

Re: Students loan too high. Advice on what to do

What does your income look like if you don't mind me asking? I know you say you can only afford to pay a certain amount but if we know more about what you make and what you spned it on maybe we can pinpoint an area to cut back on.



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Message 3 of 14
Valued Contributor

Re: Students loan too high. Advice on what to do

The simplist solution is to go to an Income Based Repayment plan.  There are several options and the differences are a little complicated so it will take some research on your part to determine what is best for you but they make a huge difference.  My payment is 1/3 of what it would normally be.  You make 20 years of payments and the remainder is forgiven (there is a tax consequence but it still puts you way ahead).  If you work for a non-profit or government you can get them forgiven after just 10 years and there is no tax consequence.  I had student loans 20 years ago when I filed for BK 13 and that was the one debt that they would not include, it is my understanding they are very difficult to get included unless you have extreme circumstances like disability.

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698
Message 4 of 14
Established Contributor

Re: Students loan too high. Advice on what to do

Are your loans with Navient private student loans?  Or are they also Federal?

 

I agree with others.  For the loans that are Federal Student Loans (even if they are serviced by Navient) then you can sign up for an IBR plan.  That should make your payments more manageable.

 

Also check with them to see if you may qualify for a financial hardship deferment to provide you some relief for a few months from payments.  This can help you get your finances in order and see where you might be able to cut back in other areas.

 

The companies do NOT want you to default.  So, contact them and get your options so you know how best to move forward.


Starting Score: Eq: 662 Tu: 532 (03/02/2011) CH7BK 01/12/2009 Discharge
Current Score: Eq: 712 (02/03/2017) Tu: 717 (04/03/2013)
Goal Score: Eq: 760 Tu: 760

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Message 5 of 14
Regular Contributor

Re: Students loan too high. Advice on what to do

I talked with navient and they took my financials and said that my payments could not be changed. And my rate is already extremely low. My federal and private are both around 289. Navient pretty much said that there was nothing that they could do. They eventually offered me a settlement which only shaved off like 5 grand which of course was not doable.

Starting Score: 520
Current Score: 627
Goal Score: 700


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Message 6 of 14
Established Contributor

Re: Students loan too high. Advice on what to do

So it sounds like Navient is Personal Student loans.  If that is the case, you are correct, there are typically less options for the loans that are private.

 

So, what amount of your payment is for private loans and what amount is for Federal loans?  You can still work to have the Federal loans put on a IBR plan so that can help with your monthly payment amount.


Starting Score: Eq: 662 Tu: 532 (03/02/2011) CH7BK 01/12/2009 Discharge
Current Score: Eq: 712 (02/03/2017) Tu: 717 (04/03/2013)
Goal Score: Eq: 760 Tu: 760

Wallet: PenFed Power Cash 25k | AMEX Blue Cash (AU) 49.5k | Cap One QSMC 26.5k | AMEX Platinum NPSL | LFCU Visa 10k
Message 7 of 14
Regular Contributor

Re: Students loan too high. Advice on what to do

Private is around 280 and federal 250

Starting Score: 520
Current Score: 627
Goal Score: 700


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Message 8 of 14
Established Contributor

Re: Students loan too high. Advice on what to do

The payment on your private loan will likely stay the same, but contact the servicing provider of your federal loan and ask about an Income Based Repayment (IBR) plan that could allow you to pay less than the $250 that you are paying now for the federal student loan.  Or you may be able to get a financial hardship foreberance on the federal loan.


Starting Score: Eq: 662 Tu: 532 (03/02/2011) CH7BK 01/12/2009 Discharge
Current Score: Eq: 712 (02/03/2017) Tu: 717 (04/03/2013)
Goal Score: Eq: 760 Tu: 760

Wallet: PenFed Power Cash 25k | AMEX Blue Cash (AU) 49.5k | Cap One QSMC 26.5k | AMEX Platinum NPSL | LFCU Visa 10k
Message 9 of 14
Valued Member

Re: Students loan too high. Advice on what to do

Have you looked into deferment and forbearance options? These will allow you to hold payments off for a period while you get your finances in order which would be helpful in knowing some more so we can pinpoint some options for you.  If you're not sure on your spending then I would suggest putting all your accounts into Personal Captial which will be able to track and categorize your cash flow so you can get a better idea. 

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Message 10 of 14