Help! Student loan acct out of control

[Rikter8]

Does anybody have an account through Citi for their student loan?

I stareted off in June 09 with a $18K balance. I have made payments to it since then on time. The payoff balance every month keeps creeping up.
I'm now at $20K, and I've been making my payments.
They've got me on a 6.9% interest rate.
My local credit unions and banks will not transfer student loans.

Is that Right??
If so, how the fuck do they expect people getting out of college to EVER pay that off????

*Pulls hair out* why do I always get fucked?
*End of rant*

For those of you that have student loans - what interest rate are you paying, and if it's lower than mine, who do you suggest I transfer it to?

 

[D_Pubert Stabbingpain]

Does anybody have an account through Citi for their student loan?

I stareted off in June 09 with a $18K balance. I have made payments to it since then on time. The payoff balance every month keeps creeping up.
I'm now at $20K, and I've been making my payments.
They've got me on a 6.9% interest rate.
My local credit unions and banks will not transfer student loans.

Is that Right??
If so, how the fuck do they expect people getting out of college to EVER pay that off????

*Pulls hair out* why do I always get fucked?
*End of rant*

For those of you that have student loans - what interest rate are you paying, and if it's lower than mine, who do you suggest I transfer it to?

You need to call Citi and tell them this. Student loan companies have to follow federal regs and they have to work with you so that you can afford the payments. There are many options. If you don't get satisfaction on your first call, ask for a super.

 

[NotSoDumb_Blonde]

There are tons of resources, why not go to the fed site? Or transfer your loans. They're your loans and can I just say, wow that is low!! I wish mine was that low. I have like ...uh, way too much. You can also get involved in Obama's new loan program...if you qualify.

Here are some links to help out, or I hope they help out! Good luck!

IBRinfo :: Can they help me?

this is a great blog: http://studentloanadvice.blogspot.com/

your bank should also have a website/help with student loans

 

[Lex]

Does anybody have an account through Citi for their student loan?

I stareted off in June 09 with a $18K balance. I have made payments to it since then on time. The payoff balance every month keeps creeping up.
I'm now at $20K, and I've been making my payments.
They've got me on a 6.9% interest rate.
My local credit unions and banks will not transfer student loans.

Is that Right??
If so, how the fuck do they expect people getting out of college to EVER pay that off????

*Pulls hair out* why do I always get fucked?
*End of rant*

For those of you that have student loans - what interest rate are you paying, and if it's lower than mine, who do you suggest I transfer it to?

Rikter--I called my student loan companies and asked them to lower my interest rate and/or monthly payment about a year ago. I was clear to them--I could still make all payments, but with the economy tanking, I wanted some extra breathing room in my budget. They were happy to oblige, given how many people were simply going into default. Try that.

Or, if you are done with school, try consolidation. Banks make money by selling your loans to other people--try to consolidate to the lower interest rate with a different company.

Remember--defaulting on your students loans is one of the top two horrible credit hits you can take. It will kill your ability to have credit moving forward.

 

[D_Tintagel_Demondong]

I hear that the system in the US is similar to Canada's; the banks charge the prime rate plus a certain percentage. In Canada, it's 4% (I think), and the prime rate is now around 2.25%, so the banks can charge 6.25% as of now.

This is slightly less than what you are paying. My point is, though, that the government and not the banks dictate the interest rates on student loans. Your payments should not be increasing.

There are some tricks to paying off your debt sooner. One is to get a line of credit with a very low interest rate. This isn't likely, however. Another is to join AmeriCorps. They have many positions, and as a member, you can not only defer your student loans, but get a taxable grant of almost $5,000/year.

Some employers in desperate need of skills offer packages where they pay off your student loans (usually up to $100,000).

Government student loan colsolidation (by Federal Student Aid (Application)) can have two advantages:
1. The length of time to pay the loan can be increased.
2. The interest rates may be lower.

Loans from schools can be as lenient as Federal loans. You can renegotiate a federal load due date from 10 years to up to 25 years.

How much do you owe on Federal, State or School loans?

Edit:

Yeah, what they said.

 

[chicagosam]

I am happily over with this phase of my life and do not envy anyone in school today with having to negotiate the money that is required to get a degree.

My total loan was $35,000 and with interest became over $50,000. I paid about $500 a month for ten years. It was a struggle and I felt exactly as you do. I made the decision to walk out on my Doctoral program and go back to secondary education where I knew I could make more money and pay off this debt. It would have been nice to have been "Dr. Sam" but I have had a very nice and comfortable life without the title. I landed a job—"being overqualified"—and eventually was making enough that I could pay ahead and finished a year earlier than expected. It required a lot of sacrifice to do it.

The best thing I can say is try all the ideas that were given above; but, ultimately, it comes down to you busting your butt to pay it off. I gave up a lot during those ten years, had to work hours and hours of overtime, hated every minute of it, but I did get it paid off and did not destroy my credit in the process. Now, I can have fun and without guilt.

You are in a good position with only $18,000. You'll get through this. Good luck.

 

[joyboytoy79]

Are you still in school? If so, and you are paying your minimum payments, you aren't paying enough to cover the interest being charged, so it's being compounded onto your principal balance. That's pretty standard practice. If you can afford to pay more than the minimum payments do.

If you are out of school it is against the law for the banks to set your minimum payments to less than the interest they charge. In other words, if you are out of school, and making minimum payments, at least some portion of that minimum payment MUST be applied to principal, and your loan should be (glacially slowly) shrinking. Even if you are out of school, pay more than the minimum payments whenever possible, as any payment in excess of minimum payments is applied directly to principal, reducing the amount of interest charged overall.

 

[Rikter8]

I appreciate all of your advice!

I am finished with school. THey were quick to send me statements of what was owed as well.

I'll check it out on Monday when there's actual people online to help.
I'm not having an issue paying my monthly bill....its the total amount owed that is increasing at a rapid rate, and I dont understand why.

If Im paying my monthly dues, and most of those monthly dues are in interest, why is my total amount of $18K turniing into $20K. Finished School December 2008. Payments began in June 2009. From June 2009 - December 2009 my loan increased from $18K to $20K with my monthly payments on time each time.

I've heard Citi is a Nightmare...so I am going to seriously shop around.
I've got good credit, so I'm hoping somebody will work with me.
Believe me..I've gone without since Ive been 16 -working full time at several jobs so I could afford college since I was denied financial aid all through college. The only thing I could get were loans...so I worked my ass off and paid for my classes from my paycheck.
The $18K was for the final "Screw it...I'm finishing school and I dont care what it cost". Not too bad compared to others, but again.... I'm really nervous why my balance is going UP, not down.

 

[D_Ellerby Eatsprick]

I just started paying my student loans, here in Canada. Can't say I've had problems yet but I'm watching my loans carefully to make sure I don't get fucked over.

But I feel your pain because I'm also trying to pay off my credit card too. Everytime I put down $500, another $250 is slapped down, so really I'm only paying $250. :/

 

[Industrialsize]

I appreciate all of your advice!

I am finished with school. THey were quick to send me statements of what was owed as well.

I'll check it out on Monday when there's actual people online to help.
I'm not having an issue paying my monthly bill....its the total amount owed that is increasing at a rapid rate, and I dont understand why.

If Im paying my monthly dues, and most of those monthly dues are in interest, why is my total amount of $18K turniing into $20K. Finished School December 2008. Payments began in June 2009. From June 2009 - December 2009 my loan increased from $18K to $20K with my monthly payments on time each time.

I've heard Citi is a Nightmare...so I am going to seriously shop around.
I've got good credit, so I'm hoping somebody will work with me.
Believe me..I've gone without since Ive been 16 -working full time at several jobs so I could afford college since I was denied financial aid all through college. The only thing I could get were loans...so I worked my ass off and paid for my classes from my paycheck.
The $18K was for the final "Screw it...I'm finishing school and I dont care what it cost". Not too bad compared to others, but again.... I'm really nervous why my balance is going UP, not down.

It sounds like you are paying the "minimum" payment. That's what they want you to do. Your minimum payment may not "cover" the amount of interest your loan is accruing, hence, the amount owed rises even though you are making payments.

 

[chicagosam]

I tend to question why your amount is increasing, too. That should have been established at the beginning when you signed the loan and a monthly amount was set. Something does not sound right here. Was there more than one loan and did they have different rates?

Loans do get sold to other banks from time to time. Mine went to three different banks over the ten years, but the monthly amount never changed.

I worry that those who are responsibly paying back student loans currently are paying the price for those that defaulted in the past.

I hope you get some good news on Monday and can work this out to your benefit.

 

[D_Tintagel_Demondong]

It sounds like you are paying the "minimum" payment. That's what they want you to do. Your minimum payment may not "cover" the amount of interest your loan is accruing, hence, the amount owed rises even though you are making payments.

Most def. My first loan started at $16,000 and before I knew it I was getting $25,000 bills in the mail. Try to pay a bit extra on your payments, even if it's only 10%.

I forgot to add another option:

Borrow, say, $5,000 from a family member at 5% annual interst (pay them back $5,250 within a year). This benefits you because 5% is less than 6.5%, and it benefits them because they get a great return of 5% (well above, say, a GIC of 3%).

Hell, borrow $10,000 if you can.

Cheers.

 

[b.c.]

First, if you can help it, NEVER go to school on a student loan. What they do is make you several loans over the course of the (educational) period, so you actually end up paying interest on multiple loans. I know a guy whose been dealing with that "monkey" for nearly 20 years now, with no end in sight.

They don't mind writing off or bailing out banks and corporations. But a student loan will follow John Q. P. to his grave...and beyond.

 

[Lex]

I was fortunate enough to only need student loan help for my undergraduate degree (I had a partial scholarship and needed additional support). My masters, advanced graduate certificate, and doctorate were essentially free because I worked for some amazing companies and got a few scholarships along the way.

 

[rob_just_rob]

Or, if you are done with school, try consolidation. Banks make money by selling your loans to other people--try to consolidate to the lower interest rate with a different company.

Be careful if trying this. Student loan rates are set by the government and in some cases, subsidized by the government. They are artificially low in consequence. A student straight out of school with few assets and little credit history usually wouldn't qualify for unsecured rates at 6.9%. If you are a mature student or one with a decent credit history, you might do better than 6.9... but a 22 year old straight out of school with no work experience probably wouldn't.

When I worked in credit risk, one of the policies I put in place was to stop consolidating student loans - it usually wasn't a favour to the student ratewise, and the default rate was ridiculous.

What MIGHT would is extending the term of the loan, if that's possible. It's a measure of last resort, though, because you'll end up paying more interest overall in the long term. But short term, it could help.

 

[223790]

I was being charged 9% on a loan of $25,000.00 back when I was paying mine off. Thankfully they were paid off about 8 years ago. If you think your rate is bad, look at what I had to pay! You are correct that it does make it more difficult to pay them off. When I only had about $9,000.00 remaining, I made a deal to pay them off in full by paying it off with a credit card I had. I know that may sound crazy to some people, but in my case I had a credit card with a fixed permanent rate of 9%, so it wasn't costing me more money. By paying off the remaining balance in one lump, they knocked about $3,000.00 off the amount I owed. I of course didn't tell them that I had a credit card with the same interest rate as my loan. Instead I told them that in order to pay them off, I would have to put the balance on my credit card that was considerably more interest than what I was currently paying, and that I would be losing my tax write off (student loan interest was tax deductable), so I needed to be compensated for that. The collection agency (hired by the gov't to collect on outstanding student loans) wanted it paid off, so they agreed. The collection agencies get paid a commission on what they actually recover. Obviously the gov't gave them the authority to accept lower amounts to get most of their money back.

Before anyone accuses me of ripping off the gov't, I would like to point out that I paid 9% interest on a loan that only (at the time) should have cost me half of that, so as far I was concerned, the gov't was ripping off students who were living up to their obligations and trying their best to pay back their debt. At the time, I could have declared bankruptcy and I wouldn't have had to pay a dime back (you can't do that now because too many people were doing that to get out of paying off their student loan and the gov't was losing a fortune). Also, if you saw how much I pay now in taxes every year (which is helping fund education), I'm more than paying back what I was forgiven and then some.

I don't know if what I did will work for you, but it's something to consider. Good luck!

 

[wallyj84]

Ugh student loans... I don't have the ability to pay mine. So I don't.

I wonder what the default rate for student loans is with the economy in shambles.

 

[Rikter8]

Well I called them up and found out what was going on. Apparently there were 2 Stafford Loans that didn't post to the account until late.
The plan I selected was the minimum amount, to keep the payment low (I did this in case I lost my job, I could pay more if needed).
Well the minimum plan was just that. It was just enough to cover the interest.
So, my only option is to pay more on the principle.
They would not lower my interest rate. Its currently at 5.8%.
Looks like Iv'e got to find Job #2 to get this knocked out.

 

[rbkwp]

fyi re Student Loans in New Zealand

Just a little info re such here in NZ

Ministry of Education - Analyses of Student Loans
In December 2005, Parliament passed legislation making student loans for borrowers living in New Zealand interest free from 1 April 2006. The interest free ...
Ministry of Education - Student Loans

Cant recall now if it was an election promise at the time .. or what?
enz

 

[breeze]

I don't know if it applies to you but its good to know anyway. Briefly on july 1 " the govenment introduced a more-lenient repayment program for federally guaranteed stafford and grad plus college loans".You have to apply for it and " it caps payments based on the borrower's adjusted gross income and family size. Any remaining debt is wiped out after 25 years or 10 years for workers in public or nonprofit jobs. "