using credit card to pay off student loans

[Anonymous]

Why can't borrowers use a credit card to pay down a nondischargable student loan and then default on the dischargeable credit card balance?

[MarineVietVet]

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@Anonymous wrote:

Why can't borrowers use a credit card to pay down a nondischargable student loan and then default on the dischargeable credit card balance?

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Hello and welcome to the forums.

I'm not at all sure you're allowed to use a CC to pay on SL's for that very reason. But if you are allowed then yes some dishonest and unethical people would use such an end around tactic.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[laz98]

i would guess that is exactly why, because then nobody would feel the need to pay their student loans.  they could just put them on a credit card & declare bankruptcy.

[Travis-84]

I don't know if this is the reason.

Student loan companies don't care if you default on student loans, they just one money.  The problem student loan companies have is transaction cost.  If every payment I make requires a transaction fee, then profits go down for student loan companies.  I guess they could pass the cost on, but unless the cost was very very low, I doubt people would use it, so they don't offer it.  At least that is my theory. 

[laz98]

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@Travis-84 wrote:

Student loan companies don't care if you default on student loans, they just one money.  The problem student loan companies have is transaction cost.  If every payment I make requires a transaction fee, then profits go down for student loan companies.  I guess they could pass the cost on, but unless the cost was very very low, I doubt people would use it, so they don't offer it.  At least that is my theory. 

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i don't think this is what the OP was asking.  i think they were asking why people wouldn't use CCs as a loophole to student loans not being dischargeable in bankruptcy, not why student loan companies don't let you pay with a credit card.

[marty56]

IMHO the reason is that the loan company would have to pay a fee to allow you to pay by credit card.  Same reason for car loans and auto loans.

[MidnightVoice]

My daughter pays her student loan installments on a crecit card (mine!)

[cdtotten]

Care to share which company is allowing this? I have never heard of a SL being paid via cc.

[Anonymous]

http://www.moneycrashers.com/should-you-pay-off-a-student-loan-with-a-0-interest-credit-card/