How do college/university loans work in the US?

posted 3 years ago in College
Post # 3
Member
2419 posts
Buzzing bee
  • Wedding: August 2015

@PenguinLove:  Yes, you have to pay them back. I’m paying ~$275 per month back and I do not work in the type of industry where they will be forgiven. So, I will be paying on them for oh, the next 20 years or so unless I start making a significiantly large amount of money each month.

If you don’t pay them, you trash your credit score and they will come after you. Most student loans are also not liquified during bankruptcy here either.

Post # 4
Member
9137 posts
Buzzing Beekeeper
  • Wedding: November 2013 - St. Augustine Beach, FL

@PenguinLove:  I wish that I could that small of payments.  There are many types of loans here but basically it comes down to federal loans and private loans.  The main difference between the two is that federal loans never go away ever unless you die while private loans can be written off in a bankruptcy action.  Also, federal loans have lower interest rates than private loans.  Most full time students qualify for federal loans to pay for some or all of their college tuition.

You have to pay the money back?  Yes.  But education here is pretty expensive and our payment plans are nowhere near as lenient as yours.  They have finally implemented options where if you haven’t paid your federal loans off after a certian number of years, they go away but it doesn’t apply to private loans.

My monthly standard payments are around $2000 per month.  Even with payment assistance lowering my payments, I am responsible for over $500 per month.  Since I work for the state government, my paycheck is not really sufficient to pay even those reduced payments and maintain a decent lifestyle.  I am trying to see if I qualify for any other programs to reduce my payments.  If not, I am going to enroll in university part time through my work so the office will pay for me to take courses and my loans will be placed on hold while I continue to attend school.  However, while that happens, my interest rates keep adding onto my debt.

What happens if you don’t?  They can get a judgement against you to garnish your wages.  See above regarding bankruptcy.

Post # 6
Member
5697 posts
Bee Keeper
  • Wedding: August 2012

I’m surprised the government would loan so much money and not make you pay it back. Of course you have to pay your debts back in the US, they would never let you get away with not lol.

Student loans are even one of the things that aren’t dissolved by claiming bankruptcy. You can get out of your mortgage, car loan, credit card debts, but not your student loans. You can get a “deferral” during difficult times if you apply. But you still have to pay the compounded interest and full debt eventually.

The only nice thing is you CAN claim the interest on your taxes.

Post # 7
Member
2419 posts
Buzzing bee
  • Wedding: August 2015

@PenguinLove:  Eh. Yes and no.

Am I glad I furthered my education? Yes.

If I had to go back in time, would I do it again? I’m not sure. Looking back on it now, I wish I would have started working full time right out of high school until I figured out what I wanted to do with my life and then did some schooling. The job I currently do ( I work as a legal assistant/secretary) I could do without a degree.

Post # 8
Member
9137 posts
Buzzing Beekeeper
  • Wedding: November 2013 - St. Augustine Beach, FL

@PenguinLove:  I also have mixed emotions.  I love my job and it required the level of education I took loans out for, plus, I attended a state school so I was able to take out a lower amount of loans than most in my profession (attorney).  But ultimately, unless I am able to move up and make significantly more money or get flush with money from the lottery, I will always be in debt and making huge student loan payments.

I currently qualify for the 10 year plan where they wipe away whatever is left after 10 years of payments but I am debating on applying for it.  It means I would have to remain in my current job or one like it where I make very little money and the loan payments are so high that it’s not really worth it because I would be living on little more than minimum wage after paying my loan payments for the month. It’s frustrating to have to build everything in my life around making huge loan payments.

Post # 9
Member
11772 posts
Sugar Beekeeper
  • Wedding: May 2013

My student loans were $415/month! Luckily, I was able to pay them off when I sold my property in Vermont.

And there was definitely not a forgiveness option!

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