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HeathKernandez
Our Ron is an awesome Ron
Member since 4/07 9091 total posts
Name:
baby fish mouth
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Student Loan question
For those who took Unsubsidized Stafford Loans. Did you start paying off your interest right away? I took 9,000.00 out this spring and received an optional payment letter for 318.00
I want to start chipping away at this, perhaps send 100 a month or something.
How often did you received these 'optional' payments? I don't want to end up paying an insane amount of $ on interest..
And a regular Stafford loan, the interest is held until I graduate... is that right?
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Posted 7/29/09 7:17 PM  |
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Long Island Weddings
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headoverheels
s'il vous plaît
Member since 6/07 42079 total posts
Name:
LB
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Re: Student Loan question
Posted by HeathKernandez
For those who took Unsubsidized Stafford Loans. Did you start paying off your interest right away? I took 9,000.00 out this spring and received an optional payment letter for 318.00
i never did, but as far as i know you can make payments to your loans towards the interest with no penalty as many times as you want. it's a smart thing to do if you can spare the $$ - you'll owe a lot less when you get out! however if it's going to leave you tight for $$ skip it. student loans are good debt to have. it would be smarted to use that $$ to pay off credit card debt if you have any. student loan interest is so much smaller, compared to CC interest.
Posted by HeathKernandez
And a regular Stafford loan, the interest is held until I graduate... is that right?
yes, subsidized stafford loans don't accrue interest until after you graduate - and i don't know if it's right away either, it might be a few months later. i'd ask a loan advisor.
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| Posted 7/29/09 7:33 PM |
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HeathKernandez
Our Ron is an awesome Ron
Member since 4/07 9091 total posts
Name:
baby fish mouth
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Re: Student Loan question
Posted by headoverheels
Posted by HeathKernandez
For those who took Unsubsidized Stafford Loans. Did you start paying off your interest right away? I took 9,000.00 out this spring and received an optional payment letter for 318.00
i never did, but as far as i know you can make payments to your loans towards the interest with no penalty as many times as you want. it's a smart thing to do if you can spare the $$ - you'll owe a lot less when you get out! however if it's going to leave you tight for $$ skip it. student loans are good debt to have. it would be smarted to use that $$ to pay off credit card debt if you have any. student loan interest is so much smaller, compared to CC interest.
Posted by HeathKernandez
And a regular Stafford loan, the interest is held until I graduate... is that right?
yes, subsidized stafford loans don't accrue interest until after you graduate - and i don't know if it's right away either, it might be a few months later. i'd ask a loan advisor.
thank you!
I hate this b/c I never had any kind of debt before... owing something makes me itch..I need to get over that in this day & age
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| Posted 7/29/09 7:35 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19461 total posts
Name:
L
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Re: Student Loan question
Posted by headoverheels
Posted by HeathKernandez
For those who took Unsubsidized Stafford Loans. Did you start paying off your interest right away? I took 9,000.00 out this spring and received an optional payment letter for 318.00
i never did, but as far as i know you can make payments to your loans towards the interest with no penalty as many times as you want. it's a smart thing to do if you can spare the $$ - you'll owe a lot less when you get out! however if it's going to leave you tight for $$ skip it. student loans are good debt to have. it would be smarted to use that $$ to pay off credit card debt if you have any. student loan interest is so much smaller, compared to CC interest.
Posted by HeathKernandez
And a regular Stafford loan, the interest is held until I graduate... is that right?
yes, subsidized stafford loans don't accrue interest until after you graduate - and i don't know if it's right away either, it might be a few months later. i'd ask a loan advisor.
I did not pay off the unsubsidized while in school but made huge lump sums to get rid of it one I was out of school.
However, DO NOT PAY OFF CREDIT CARDS WITH STUDENT LOANS - ESPECIALLY UNSUBSIDIZED ONES
I really have to vehimently disagree with the person who posted to put cc debt on the unsubsidized SL b/c the SL is not dischargeable in bankruptcy and adding CC debt to it is horrible advice.
Message edited 7/30/2009 8:13:05 AM.
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| Posted 7/30/09 8:12 AM |
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Sassyz75
Turning a new page
Member since 5/05 9731 total posts
Name:
Dina
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Re: Student Loan question
While I was in school, I just payed off the interest. when I graduated I took a ridiculously long repayment... 20 years? 30 years? It's really cheap though b/c my interest is under 3%
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| Posted 7/30/09 8:29 AM |
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VickiC
Rocking the party
Member since 5/05 4937 total posts
Name:
Vicki
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Re: Student Loan question
Posted by LSP2005
Posted by headoverheels
i never did, but as far as i know you can make payments to your loans towards the interest with no penalty as many times as you want. it's a smart thing to do if you can spare the $$ - you'll owe a lot less when you get out! however if it's going to leave you tight for $$ skip it. student loans are good debt to have. it would be smarted to use that $$ to pay off credit card debt if you have any. student loan interest is so much smaller, compared to CC interest.
However, DO NOT PAY OFF CREDIT CARDS WITH STUDENT LOANS - ESPECIALLY UNSUBSIDIZED ONES
I really have to vehimently disagree with the person who posted to put cc debt on the unsubsidized SL b/c the SL is not dischargeable in bankruptcy and adding CC debt to it is horrible advice.
.
She didn't say that. She said that if paying the interest now would leave her short for cash to not pay it. She's better off paying any CC debt she might have because that rate is higher than the Student Loan rates.
For us, we paid the interest every month which helped to keep the balance at what we originally took out, plus it's tax deductable. We claim our SL interest every year.
Message edited 7/30/2009 8:48:22 AM.
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| Posted 7/30/09 8:47 AM |
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headoverheels
s'il vous plaît
Member since 6/07 42079 total posts
Name:
LB
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Re: Student Loan question
Posted by LSP2005
Posted by headoverheels
Posted by HeathKernandez
For those who took Unsubsidized Stafford Loans. Did you start paying off your interest right away? I took 9,000.00 out this spring and received an optional payment letter for 318.00
i never did, but as far as i know you can make payments to your loans towards the interest with no penalty as many times as you want. it's a smart thing to do if you can spare the $$ - you'll owe a lot less when you get out! however if it's going to leave you tight for $$ skip it. student loans are good debt to have. it would be smarted to use that $$ to pay off credit card debt if you have any. student loan interest is so much smaller, compared to CC interest.
Posted by HeathKernandez
And a regular Stafford loan, the interest is held until I graduate... is that right?
yes, subsidized stafford loans don't accrue interest until after you graduate - and i don't know if it's right away either, it might be a few months later. i'd ask a loan advisor.
I did not pay off the unsubsidized while in school but made huge lump sums to get rid of it one I was out of school.
However, DO NOT PAY OFF CREDIT CARDS WITH STUDENT LOANS - ESPECIALLY UNSUBSIDIZED ONES
I really have to vehimently disagree with the person who posted to put cc debt on the unsubsidized SL b/c the SL is not dischargeable in bankruptcy and adding CC debt to it is horrible advice.
whoaaaa!!! i never ever said to do that!!!
i said to use extra cash to pay off CC debt - not use her loans to do that!! wow that would be horrible advice!!!
ETA: reading my post i see how you misunderstood. when i said "use that extra $$$ to pay off cc debt" i meant to use the $$$ she was going to use to pay off some of her loan interest - NOT the loan itself!!
Message edited 7/30/2009 9:15:16 AM.
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| Posted 7/30/09 9:13 AM |
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MeeshMosh
last month on leave!
Member since 6/08 4551 total posts
Name:
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Re: Student Loan question
i did start paying the interest while i was still in school -- i think it made a pretty significant difference in my balance in the end
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| Posted 7/30/09 9:26 AM |
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HeathKernandez
Our Ron is an awesome Ron
Member since 4/07 9091 total posts
Name:
baby fish mouth
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Re: Student Loan question
Posted by LSP2005
Posted by headoverheels
Posted by HeathKernandez
For those who took Unsubsidized Stafford Loans. Did you start paying off your interest right away? I took 9,000.00 out this spring and received an optional payment letter for 318.00
i never did, but as far as i know you can make payments to your loans towards the interest with no penalty as many times as you want. it's a smart thing to do if you can spare the $$ - you'll owe a lot less when you get out! however if it's going to leave you tight for $$ skip it. student loans are good debt to have. it would be smarted to use that $$ to pay off credit card debt if you have any. student loan interest is so much smaller, compared to CC interest.
Posted by HeathKernandez
And a regular Stafford loan, the interest is held until I graduate... is that right?
yes, subsidized stafford loans don't accrue interest until after you graduate - and i don't know if it's right away either, it might be a few months later. i'd ask a loan advisor.
I did not pay off the unsubsidized while in school but made huge lump sums to get rid of it one I was out of school.
However, DO NOT PAY OFF CREDIT CARDS WITH STUDENT LOANS - ESPECIALLY UNSUBSIDIZED ONES
I really have to vehimently disagree with the person who posted to put cc debt on the unsubsidized SL b/c the SL is not dischargeable in bankruptcy and adding CC debt to it is horrible advice.
if the interest rate on the student loan is lower than the CC rate, why would it be horrible advice?
Message edited 7/30/2009 10:17:21 AM.
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| Posted 7/30/09 9:35 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Student Loan question
Posted by LSP2005
I did not pay off the unsubsidized while in school but made huge lump sums to get rid of it one I was out of school.
However, DO NOT PAY OFF CREDIT CARDS WITH STUDENT LOANS - ESPECIALLY UNSUBSIDIZED ONES
I really have to vehimently disagree with the person who posted to put cc debt on the unsubsidized SL b/c the SL is not dischargeable in bankruptcy and adding CC debt to it is horrible advice.
I have to disagree with this. Lets face it... if you get to the position to claim BK... you are already efffed.
If somebody has a CC debt of 20% and has the option to take out an unsubsidized loan for 4%, why not?
I would love to have a discussion on this.
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| Posted 7/30/09 10:44 AM |
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: Student Loan question
for the original question - i didn't pay the interest while in school - but I didn't have any money - that's why I took out the loans  Maybe I should have. It's 9 years since I got that MS and I'm still going (but should be done this year)
I have to disagree with this. Lets face it... if you get to the position to claim BK... you are already efffed.
If somebody has a CC debt of 20% and has the option to take out an unsubsidized loan for 4%, why not?
I would love to have a discussion on this.
Just going by your scenario...someone with 20% interest on a CC isn't doing too well credit-wise, so I would advise against it...there are plenty of opportunities for CC with under 4% interest - I wouldn't pay any CC with extra student loan money ($$ from the original loan- not the situation headoverheels mentioned)
Plus if you are already effed to claim BK - you will still have that SL payment - just now bigger since you added the CC balance. how is BK going to even help?
Message edited 7/30/2009 11:27:41 AM.
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| Posted 7/30/09 11:26 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Student Loan question
Posted by Erica
Just going by your scenario...someone with 20% interest on a CC isn't doing too well credit-wise, so I would advise against it...there are plenty of opportunities for CC with under 4% interest - I wouldn't pay any CC with extra student loan money ($$ from the original loan- not the situation headoverheels mentioned)
Plus if you are already effed to claim BK - you will still have that SL payment - just now bigger since you added the CC balance. how is BK going to even help?
What if the person has savings in the bank to be able to cover the CC debt, but doesn't want to deplete their savings and be left with a minimal emergency fund.
While finding a CC under 4% is usually the best option, it's not always available. Credit is really tight and even if a bank will approve a 0% BT offer (for instance), they may not supply an adequate enough credit limit to make it worthwile to use. Plus with BT transfers, you usually have to pay a fee (typically 3%).
Taking out a student loan in this scenario isn't always the worst decision because you are simply restructuring the CC debt you have and lowering your monthly payment since you are lowering your interest.
In regards to the BK arguement, like I said assume you have the money in savings to cover the CC debt, you can simply pay down the loan at any time. *OR* if you really want to get tricky... right before you claim BK... do a CC BT to the student loan and move the debt back to the credit cards.
I am not saying doing this is the BEST way. But its far from the worst.
One other advantage of getting the debt off CCs... you are reducing the chance that banks that hold your existing CCs will take adverse action against you... which can include but not be limited to lowering credit lines, closing cards, etc.
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| Posted 7/30/09 11:37 AM |
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: Student Loan question
Posted by ave1024
In regards to the BK arguement, like I said assume you have the money in savings to cover the CC debt, you can simply pay down the loan at any time. *OR* if you really want to get tricky... right before you claim BK... do a CC BT to the student loan and move the debt back to the credit cards.
hmmm - so you (figuratively) have the money to pay your CC debt and you are still claiming BK? I think that's running into an ethical dillema.
but I have also thought that people could write CC BT checks to student loan and then claim BK. But if you are at the BK point, you are probably not getting CC/BT offers or CC checks.
but ITA with you that there are so many options and each works differently with different situation and there are often more than one option that works. I guess that's why people weigh pros and cons
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| Posted 7/30/09 1:03 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19461 total posts
Name:
L
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Re: Student Loan question
First, you should consult an attorney and or an accountant to assist you with answers to help address your particular situation.
That said, and this is not legal advice, it is a fraud to use a student loan to pay off a credit card and then use the student loan interest deduction on your taxes. Second there is the bankruptcy issue - that is student loans are not discharged in bankruptcy whereas cc debt may be.
I am sorry if I misread what a pp said or intended.
This link may help further explain things.http://www.studentloanborrowerassistance.org/bankruptcy/
Message edited 7/30/2009 3:14:01 PM.
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| Posted 7/30/09 3:10 PM |
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HeathKernandez
Our Ron is an awesome Ron
Member since 4/07 9091 total posts
Name:
baby fish mouth
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Re: Student Loan question
Posted by LSP2005
First, you should consult an attorney and or an accountant to assist you with answers to help address your particular situation.
That said, and this is not legal advice, it is a fraud to use a student loan to pay off a credit card and then use the student loan interest deduction on your taxes. Second there is the bankruptcy issue - that is student loans are not discharged in bankruptcy whereas cc debt may be.
I am sorry if I misread what a pp said or intended.
This link may help further explain things.http://www.studentloanborrowerassistance.org/bankruptcy/
NO NO NO...I am not taking out the student loan SPECIFICALLY to pay off a CC. Since going back to school, I have run into a financial burden and took out a little EXTRA to counteract the bills that were accrued due to me going back to school. I thought with CC interest rates being so high, take the lower loan interest rate would be smarter...
Trust me, I am nowhere NEAR BK..
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| Posted 7/30/09 3:20 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Student Loan question
Posted by LSP2005
That said, and this is not legal advice, it is a fraud to use a student loan to pay off a credit card and then use the student loan interest deduction on your taxes.
You are quick to call out fraud here. Do you have a link that shows this is fraud for an unsubsidized loan?
An unsubsidized student loan isn't even government backed from what I know. You have to meet eligibility requirements to GET the loan (like be enrolled in school), but you can pretty much do whatever you want with the money afterwards. There is no law, rule, IRS note that says the funds from an unsubsidized loan MUST go towards school funds. If there is, then please enlighten me.
Now if you were taking out unsubsidized student loans while not being in school, then yes I can agree that's fraud.
And if you are dealing with government backed subsidized loans, then yes I can agree that is fraud too.
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| Posted 7/30/09 3:43 PM |
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k-diggity
stay classy.......
Member since 6/08 1332 total posts
Name:
: )
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Re: Student Loan question
You can use the unsubsidized loan you took out as a student an use as you wish...ie a friend bought a used car which of course she needed to get to school.
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| Posted 7/31/09 8:38 AM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: Student Loan question
Posted by ave1024
Posted by LSP2005
That said, and this is not legal advice, it is a fraud to use a student loan to pay off a credit card and then use the student loan interest deduction on your taxes.
You are quick to call out fraud here. Do you have a link that shows this is fraud for an unsubsidized loan?
An unsubsidized student loan isn't even government backed from what I know. You have to meet eligibility requirements to GET the loan (like be enrolled in school), but you can pretty much do whatever you want with the money afterwards. There is no law, rule, IRS note that says the funds from an unsubsidized loan MUST go towards school funds. If there is, then please enlighten me.
Now if you were taking out unsubsidized student loans while not being in school, then yes I can agree that's fraud.
And if you are dealing with government backed subsidized loans, then yes I can agree that is fraud too.
an unsubsidized student loan can be government backed, if we are talking about Stafford loans.
The term Subsidized and Unsubsidized simply refer to the interest payments - subsidized the govt pays interest while you are in school and unsub the student is responsible for
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| Posted 7/31/09 9:05 AM |
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