Looking for some advice

[VennDygrem]

Ok, so this isn't exactly light-hearted or fun, but this isn't a rant either. I could genuinely use some help, and this seems like the forum to ask for it in.

So I mentioned in another forum that I've got some pretty bad student loans. I currently owe somewhere between 130-150k between three student loan institutions. Two are private, and one is a set of Federal Loans. I already know I can reconsolidate my federal loans, so that's not the problem.

What I'm looking for is advice on what to do about my private student loans. Currently, between Sallie Mae and MEFA (a massachusetts-based lender), I pay ~$1400 per month, besides my federal loan payments (over $300/mo) and car loan payments (over $250/mo). That's a lot of money, and I don't make enough at my job to support this.

It had been suggested to me by my father to seek out loan consolidation, but there are very few institutions doing student loan consolidation right now thanks to the economy and how boned students are thanks to the high cost of tuition and living expenses at some colleges. I'm also paying for school on my own; my parents are upper-middle-class, but don't have a whole lot of savings.

So, does anyone have any experience with loan consolidation? Or with paying for student loans in general? My current job doesn't really leave much space for getting a second job, maybe just a few hours here or there, but I'm already exhausted all week from my current job. I also make enough as a pharmacy technician that most people with my job can live a comfortable, if lower-class living.

Any help or constructive advice would be appreciated.

[bhu]

Be very, very careful about loan consolidation, do your homework, don't sign anything till you do.  A lot of loan consolidation places are outright scam artists. 

[wotmaniac]

My first question is: how much do you still owe on your car?  This is going to determine which one of the following two scenarios to choose.

Okay, first things first:
You need to get your student loans on deferment for the time being (yes, interest is still going to accrue; but the rate is low enough that it's not going to make that much of a difference).  First try to get a "hardship deferment" -- this will be good for 6 months.  If you can't get the "hardship", then simply take a 1-credit b.s. class at your local community college (paying cash, of course) -- which should auto-qualify you for ongoing deferment. wait -- you're still in school, right?  That being the case, if you don't have all of your student loans on the still-in-school deferment, then you're doing it wrong.
Point being, getting your student loans on deferment is priority 1.  (I'll get to consolidation at the end of the post)

Second -- I, personally, happen to worship at the alter of Dave Ramsey.  This guy is responsible for helping more people get out of debt than literally anyone/thing else in the history of forever.  (and if you happen to not be very religious, then don't worry -- his religious references are simply about where his values happen to be rooted, not about being preachy).
That being said, you absolutely have to get out from under this car payment, ASAP!
Which brings us to the aforementioned 2 scenarios:

Scenario 1: less than a year left to pay on the car
Get on your rice-and-beans budget, and get that car paid-off now.  If it needs some maintenance/repairs, get that knocked-out as soon as it's paid-off.
I'm guessing that since you still have a car payment, that you are also paying for full-coverage car insurance.  Once the car is paid-off, you can drop down to simply liability (or whatever passes for "minimum coverage" in Massachusetts) -- which will also save you some money each month. 
So that's what, $300+/month?  That's a pretty good start.  The point is that you absolutely don't want to carry a car payment.

Scenario 2: more than a year left to pay on the car
This one is a little dicey.  Get on your rice-and-beans budget; and stick every available penny in to savings, until you have enough to pay cash for a reliable car (assuming you can't just pay-off the current car -- in which case, go back to scenario 1) -- and when I say reliable, I mean something in the $2-4k range.  Then give back the current car -- they're probably gonna want some more money, but you'll just have to file them in to your debt-snowball. (this will also give you a hit to your credit score; but with the mess you're in, that's the very least of your concerns)


Other thoughts:
Have you been claiming your tuition on your tax returns?  Tuition is (at least partially) tax deductible -- and based on your student loan amounts, you've paid a lot of tuition.  If you haven't, you can actually go back up to 3 years and refile -- that may feel like rummaging through your couch for spare change; but like I said, that's a lot of tuition.

Also, there are some employers that will repay part of your federal student loans in exchange for a term-of-employment contract.  This is valuable enough to warrant some serious investigation.  Off the top of my head, I know that the military and the VA do this; as well as some private employers and some other gov't agencies (I don't know much more about this -- I just know that it exists)

Also, what are your current living arrangements?  You may be able to monkey with this to save some monthly cash.


Okay, about that consolidation:
Multiple loans within the same institution should have no real problems getting consolidated by the managing institution.  And doing this (considering the amount of your loans) should qualify you for an Extended Repayment schedule (further reducing your monthly payments).  IIRC, Sallie Mae does this even with private loans.
BTW, what institution is managing your federal loans? (though, even if it's Sallie Mae, they probably won't want to intermingle you private loans with your federal loans; but it won't hurt to ask)


Hope this helps.

[VennDygrem]

Actually, my living situation is fine for right now, in that I'm currently living "at home," that is, with my parents (consequently, not in Massachusetts anymore. I'm living in New York). I'm 27, I've long since graduated from college (coming up on 2 years, actually), so no luck with in-school deferments. In fact, Sallie Mae stopped doing in-school deferments, to a degree. Now, they still require students with Smart Option loans (which are, in effect, really the only student loans they offer now) to pay interest while in school. The majority, though not all, of my loans through them are Smart Option loans. Some of my loans are around 5-6ish% interest rates, but many are above 9% and one is up there at 11.75%!

Furthermore, I'm paying the lowest amount they'll allow me to pay with what is likely their longest repayment terms, though that will run out not too long from now. Basically meaning, I'm on a reduced-payment term for up to, I think 4 years, afterwhich the payment amount per month goes back up to full.

I don't qualify for most hardship based deferments because I make too much money, even if it all goes towards paying loans. I should also note that when speaking with a Sallie Mae rep on the phone recently, I was told that Sallie Mae does not do consolidations. And then was offered no more advice or help on the subject.

My dad's a CPA, and a good one, so I already get a good chunk of change back on tax refunds. But that really only helps for 1-2 months. I might be able to stretch it longer this year with my slightly higher pay rate and the fact that I took my last deferment from Sallie Mae (they allow you the privilege of paying them to not make payments for a while... which is insane. I understand it, but it's still ridiculous).

As for the car, I believe it was a 60-month payment option, and that was back in the summer of '08. If that's the case, then I probably only have about 4 or so months left to pay off. I'd check, but I get paperless statements and the Account website is down for maintenance right now (though their payment service is still up for people needing to make their monthly payments...) though it should be back up soon.

I'll have to take a look into your suggestions to see if there's still something relevant I can use. Thanks.

[wotmaniac]

Getting out from under that car note will help a lot. (though, probably not enough)

Wow -- Sallie Mae has really gone down the shitter in recent years.

Hmmm .... well, the federal loans should still be defer-able, right?  So you go and take a 1-2 credit class at the local community college (paid in cash, of course) .... worth looking in to.  And deferments go for 6-months after you're done with school, so .....   (of course, I may be talking completely out of my ass right now -- I'm sure lots has changed in the last 6 years)


Just a thought -- what is your degree?

[VennDygrem]

My degree's in Visual Effects. I basically made the mistake of choosing to finish out the degree after becoming disenfranchised from it, hoping I'd find an aspect of the very broad major that I'd rekindle a passion for, but that never happened. Instead of swapping majors (for the third time; I had already started at one school in Film, then dropped out, worked for a while, transferred to an art school for Animation, added a minor in VisFX, then swapped my minor for my major and vice versa), I worked through it. I figured it would take too long to graduate if I switched majors again, but it wasn't until I was nearly graduated when I figured out I would only have been in school maybe one more year than it eventually took me to finish.

And unfortunately, I was studying at an art school, which is a pretty bad idea unless you're sure you want to go into a career following your major. I should have stayed at the state college; I'd be pretty much where I am now only with a lot less loan debt.

As for deferring the federal loans, the last time I did that I barely managed to squeak under the limit for a hardship deferment with what I made. I make more money now, so I doubt I qualify anymore. I'll still check it out, though.

[wotmaniac]

Wow -- you've gotten yourself in to quite a pickle.  Good luck with that.

[VennDygrem]

Don't I know it. 

Thanks for your help, though.