Never Be Able to Payback Student Loans

Sid Farcus

LoanSafe Member
Sep 1, 2011
73
0
6
My wife has a staggering amount of student loan debt that continues to grow like a weed in the summer time. She made all the wrong choices while in college with student loans and changed her major around several times (engineering to business to education). She left college owing a lot of money in student loan debt.

She is working now as a teacher, but given her medical background I think we have come to the realization she can't continue to work. She is a 2 year cancer survivor and even though she has tried to push through with working, it's become very challenging. She is in remission, but gets sick all of the time because her immune system is a bit shot from the chemo.

Sallie Mae Federal Loan: $140,000 @ $760/month
Sallie Mae Private Loan: $28,000 @ $205/month

As a private school teacher, she brings home just over $1,100 per month after deductions. Compare that to a $965 monthly loan payment, that doesn't leave much. We have only been able to pay the private loan and kept the federal loan in forbearance growing like crazy.

Knowing what we know now, there is no way on Earth we would ever touch student loans. Be that as it may, we can't go back and change history.

So how does a teacher by education, who now has to stop working because of the affects of battling cancer for 2 years, ever able to pay $965 per month on student loans? The federal forbearance will eventually run out and then what? If she defaults on the loans, there is no income to garnish. That leaves them taking our joint tax returns each year? What else after that?
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
Knowing what we know now, there is no way on Earth we would ever touch student loans. Be that as it may, we can't go back and change history.

So how does a teacher by education, who now has to stop working because of the affects of battling cancer for 2 years, ever able to pay $965 per month on student loans? The federal forbearance will eventually run out and then what? If she defaults on the loans, there is no income to garnish. That leaves them taking our joint tax returns each year? What else after that?
Hello Sid,

I'm so sorry to hear about the situation you and your wife are in and those are the same reasons why I personally would never obtain a student loan myself.. Especially in today's economy, even with a college education it is very difficult to find work in your area of practice and even when able to it is still difficult to manage those expenses along with rent, car payment, credit cards, etc.. I have many friends who went to college right after high school and I can tell you that only one or two actually have a career in their major and they still have tens of thousands in student loans they are paying off..
 

Sid Farcus

LoanSafe Member
Sep 1, 2011
73
0
6
Thanks Evan.

When I look back at how student loans were being pushed down students throat like candy, it makes me a little upset. It wasn't at gunpoint, but kids at that age aren't thinking like an adult.

The other issue I have with student loans is consolidation. Once you consolidate, your locked in for LIFE. I have a student loan that is at 9 percent that I will never be able to get a better rate on. That entire concept goes against everything finance related. You can refinance your home mortgage down to a great current rate, but you can't do a damn thing with your high student loan rate.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
I more than agree with you, it is almost sickening the way schools push students to go to college and make it seem like there is no life without a college education.. I remember when I was in high school they would hold multiple events each year to show students how rewarding and fun their college experience will be. While it definitely can be rewarding and fum for many people who attend, there are millions of people out there who never get the job they went to college for and are left to pay tens of thousands (if not hundreds of thousands) of dollars in loans.. And let alone it is almost impossible to have students loans discharged through BK. I hate the fact that schools only promote the benefits of student loans and going to college, instead of giving the student a clear idea of what they are REALLY getting into when they obtain this financing.. In some areas you could rent a 1-2 bedroom home for the amount your wife has to pay each month on these loans..
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
28
I strongly urge you and your wife to discuss with an attny attempting to discharge the student loans in a bankruptcy. Many folks claim it cannot be done but that is wrong. While it is an uphill battle, considering the medical issues, your wife may meet the test for either a partial or full hardship discharge. Many factors (potentially including your income) play into this test, called the "Brunner Test" which is used by most jurisdictions. Google the term for more info.

Des.
 

Sid Farcus

LoanSafe Member
Sep 1, 2011
73
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6
I will look into it, but I suspect my income will also have to be taken into account even though I am not on any of her student loans.

When she talks to SallieMae about not being able to pay $965/month, they always come back with there are different payment options, but they will need your entire household income to discuss options.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
Yes from my understanding a spouse's income will be included as well. I'm definitely not saying it is impossible to discharge part or all of these debts through bk, but I have seen many people attempt to do so and I cannot recall hearing anyone successfully able to do so..
 

Sid Farcus

LoanSafe Member
Sep 1, 2011
73
0
6
By going through an online Income Based Repayment (IBR) calculator...If I set "married" and "filing separately" and enter her student loan balance, the IBR calculates a $53 monthly payment. This is just an estimate and I am not sure going from married filing jointly to married filing separately is a good idea or even allowed.
 

despritfreya

LoanSafe Member
Sep 8, 2011
369
53
28
I'm definitely not saying it is impossible to discharge part or all of these debts through bk, but I have seen many people attempt to do so and I cannot recall hearing anyone successfully able to do so..
See the following for recent granting of partial discharge. This lady filed pro se and handled the appeal pro se. Kudos to her.

http://www.bkforum.com/showthread.php?75311-Help!-Mostly-won-AP-but-suspect-appeal-will-be-filed&highlight=student+loan

Under the right facts student loans can and are dischargeable. There are numerous reported decisions on this subject. You just have to have the right set of facts. However, most student loan APs that have validity to them never go to trial. They are settled and the AP is dismissed by stipulation.

Des.
 

William Martin

LoanSafe Member
Aug 12, 2013
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39
Hearing about your condition some people may be damn scared and will think twice before taking the loan. She should have known earlier also that she wouldn't be able to payback the loan debts. :wacko:
 

willingtoplay

LoanSafe Member
Apr 3, 2013
81
8
8
I think you have to detach emotionally from this right now. Do the IBR and just think of as another expense, like the phone bill. I plan on doing IBR when I am finally done with my degree. When your wife recovers you can reassess. Also, those who work for non-profits or teach in certain regions can get a certain amount of their loans forgiven. Can you really undergo the stress of fighting this in court? Maybe you are up to taking this route, maybe not.

I'm sure your wife already feels bad enough about this, but many students were taken in - the story is you need a college education to find a good job, and to finance college you most probably will take on debt. Good Luck!

My wife has a staggering amount of student loan debt that continues to grow like a weed in the summer time. She made all the wrong choices while in college with student loans and changed her major around several times (engineering to business to education). She left college owing a lot of money in student loan debt.

She is working now as a teacher, but given her medical background I think we have come to the realization she can't continue to work. She is a 2 year cancer survivor and even though she has tried to push through with working, it's become very challenging. She is in remission, but gets sick all of the time because her immune system is a bit shot from the chemo.

Sallie Mae Federal Loan: $140,000 @ $760/month
Sallie Mae Private Loan: $28,000 @ $205/month

As a private school teacher, she brings home just over $1,100 per month after deductions. Compare that to a $965 monthly loan payment, that doesn't leave much. We have only been able to pay the private loan and kept the federal loan in forbearance growing like crazy.

Knowing what we know now, there is no way on Earth we would ever touch student loans. Be that as it may, we can't go back and change history.

So how does a teacher by education, who now has to stop working because of the affects of battling cancer for 2 years, ever able to pay $965 per month on student loans? The federal forbearance will eventually run out and then what? If she defaults on the loans, there is no income to garnish. That leaves them taking our joint tax returns each year? What else after that?
 

mybusiness

LoanSafe Member
Aug 23, 2013
6
0
0
Florida
My wife has a staggering amount of student loan debt that continues to grow like a weed in the summer time. She made all the wrong choices while in college with student loans and changed her major around several times (engineering to business to education). She left college owing a lot of money in student loan debt.

She is working now as a teacher, but given her medical background I think we have come to the realization she can't continue to work. She is a 2 year cancer survivor and even though she has tried to push through with working, it's become very challenging. She is in remission, but gets sick all of the time because her immune system is a bit shot from the chemo.

Sallie Mae Federal Loan: $140,000 @ $760/month
Sallie Mae Private Loan: $28,000 @ $205/month

As a private school teacher, she brings home just over $1,100 per month after deductions. Compare that to a $965 monthly loan payment, that doesn't leave much. We have only been able to pay the private loan and kept the federal loan in forbearance growing like crazy.

Knowing what we know now, there is no way on Earth we would ever touch student loans. Be that as it may, we can't go back and change history.

So how does a teacher by education, who now has to stop working because of the affects of battling cancer for 2 years, ever able to pay $965 per month on student loans? The federal forbearance will eventually run out and then what? If she defaults on the loans, there is no income to garnish. That leaves them taking our joint tax returns each year? What else after that?
Sid,

Have you looked into a loan forgiveness program for teachers? Here’s a link: 4 Student Loan Forgiveness Programs for Teachers - Tuition.io - Federal and State Plans Can Cancel Your Debt for Good