My Debt Blog

My wife is in the process of getting her student loans on hold, or forbearance, until she can get a full time teaching position in order to pay them. The student loan companies capitalized the interest and rolled it into the loans, so the total as of today is $123,800 rounded to dollars. Her payment alone is over a grand per month, even though it’s on a graduated system that will increase over the years.

We need to figure a plan of action on what is going to happen with these loans. The payment alone isn’t even realistic right now, which makes me wonder how she was able to borrow so much money in the first place. A few articles I read on student loan debt, most averages are anywhere from 15-40k which are manageable to say the least. Her debt is many times that and so is the payment, so how can she pay?

What I think we’re going to probably do is live off of my income alone, and use her income to pay the student loans off. Depending on what she makes, such as throwing 30k a year at them, they could be gone in less than 5 years. That is better than the 30 year payment plan which would require us to pay twice the amount of the loan in interest alone.

I’m not an advocate of bankruptcy and believe we should take responsibility for our decisions. Student loans are typically not something that can be bankrupt, unless you are deceased, disabled, or can declare undue hardship. Undue hardship makes a case that a debtor has little chance of earning enough to pay off the loan. We are married and she probably couldn’t pull this excuse off.

A quote I recently heard and like at the moment: When faced with a challenge, look for a way not a way out. I hope she gets a salary job soon so she is on her way to getting these loans paid off. Our credit cards still have to go in order to focus 100% on these.

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