Student loans

[lionlove]

I love Sallie Mae. I locked in an interest rate of 2.87% for my student loans when I consolidated and they have a cash back deal if you make a certain number of payments on time.

[GeekyPenguin]

Originally posted by Discotish
By you taking loans out to make investments, you are potentially taking federally subsidized money from people who truly need to the money to pay tuition or housing.

Just my 2 cents...

Oh, right, because if there's all those really needy people out there, all us UMC class kids at Marquette wouldn't be getting our nice little UNSUBSIDIZED loans. And isn't everybody taking a loan out to make an investment? AND furthermore, why would the gov't allow every student to take out a certain amount in loans regardless of family income if it was really such a problem.

Also, did anybody else pay the interest on their loans when they were in school? Since I have unsubsidized ones, and I'm sure I'm not the only GCer in this boat, I've been paying off the interest on them each year. It's only ~$15 a year for me and it's going to save me sooo much money later.

[Eirene_DGP]

Originally posted by BetaRose
I believe that the person you are reffering to has already graduated, and is taking their income and choosing to invest it, rather than use it to increase the payments made on her student loans. That is completely legal. It also has no bearing on what loans current students are awarded.

Well, yes it is completely legal, BUT some loans like the loan/conditional grant for teachers allow so many people to take the money. So in essence, if someone who didn't need the money went ahead and took it, that could hinder others from receiving it as Discotish mentioned.

[Discotish]

.

I intentionally racked up loans because of that since I figured I can dump that amount of money into an investment that provides a higher return (an index fund returns on average 10%) and use the investment interest to pay off the debt interest.

if the original poster has already graduated, I agree that he has a right to do whatever he wants with his money, since he has already taken the loans out. The point I was trying to make was that it is wrong for someone to take financial aid in the first place if they don't need it. I'm sorry but I just don't see how racking up student loans and putting that loan money into investments is demonstrating financial need.

Student loans are to help students pay tuition, housing, etc...they are not all purpose loans for your own personal use for whatevery you want, just because of the low rates. You want to get a low interest loan for investments,a car, whatever...maintain a good credit rating and go to a bank. Don't freeload off the government and take loan money from people who really need it

[Rudey]

Who is free loading? I've already demonstrated financial need and got the money. I could still be in school and do that as well if i did it honestly without lying on my tax forms. What i do with the money once i get it whether i'm in school or not then becomes a separate issue and i choose to be wise and pursue max gains on this. I don't have to spend all that money on housing, etc. If I choose to spend less then i'm entitled to less loans?

Investors have been doing this with other loans. Right now a lot of money manager took out large low interest loans to dump into the market in something called cash-and-carry. There is increased inter-bank borrowing becase the interest rate goes down which increases this intentionally. Arguably if a student can get their loan to pay for their education as well as whatever else and then invest it somehow to get it paid off easier, that's the best option. Heck if two poor people go to school, one gets 10K in loans, another gets 10K in loans and also works does that mean the second student who is the same financial condition as the first one is less deserving of a loan?

-Rudey

Originally posted by Discotish
.

if the original poster has already graduated, I agree that he has a right to do whatever he wants with his money, since he has already taken the loans out. The point I was trying to make was that it is wrong for someone to take financial aid in the first place if they don't need it. I'm sorry but I just don't see how racking up student loans and putting that loan money into investments is demonstrating financial need.

Student loans are to help students pay tuition, housing, etc...they are not all purpose loans for your own personal use for whatevery you want, just because of the low rates. You want to get a low interest loan for investments,a car, whatever...maintain a good credit rating and go to a bank. Don't freeload off the government and take loan money from people who really need it

[AlphaGam1019]

from clarkhoward.com:

Work for the feds and work off student loan debt! - November 3, 2003
Let’s say you have a lot of student loans and you want to get rid of them. The federal government is here to help. That’s right, the U.S. Congress has passed a bill that will forgive you your student loan debt up to $10,000 per year and $60,000 over your career if you will go to work with the federal government. When people take on a lot of student loan debt, they can’t consider jobs that don’t pay well because of the huge burden student loan debt places on them. So, to encourage people to consider a federal job, the government is offering to forgive most or all of your debt. Congress raised the maximum to $60,000 because different jobs will offer varying amounts of “forgiveness.” Federal agencies will compete for the best workers, and it hopefully will drive up the amount offered for all jobs. If you’ve thought about becoming a teacher, but you are concerned about paying off your student loan debt, the U.S. Department of Education has its own forgiveness program. There are eligible schools all around the country. And for every year you teach, a portion of your student loan debt is chipped away.
-------------------------------------------------------------------

then again, alot of these jobs require teachin in the ghetto, etc. I wonder if this applies to grad school loans.

[GeekyPenguin]

Originally posted by Discotish
.

if the original poster has already graduated, I agree that he has a right to do whatever he wants with his money, since he has already taken the loans out. The point I was trying to make was that it is wrong for someone to take financial aid in the first place if they don't need it. I'm sorry but I just don't see how racking up student loans and putting that loan money into investments is demonstrating financial need.

Student loans are to help students pay tuition, housing, etc...they are not all purpose loans for your own personal use for whatevery you want, just because of the low rates. You want to get a low interest loan for investments,a car, whatever...maintain a good credit rating and go to a bank. Don't freeload off the government and take loan money from people who really need it

How are we freeloading? I wish you would explain this. The government gives everybody a certain amount of unsubsidized loan money whether their daddy is Bill Gates or the guy who lives in my dumpster. If it's there for the taking, why can't we take it? So what if I used my first 10K of loans to pay off my car. I'm 20 and I own my own car. How many people can say that?

[Discotish]

"When your school determined your federal financial aid award, it used a standard budget to estimate the expenses you would incur while attending school. This expense estimate is referred to as your cost of attendance (COA). If you can reduce your expenses to an amount less than the school's estimated COA, you might not need to borrow as much as the school has awarded" If you're so interested, take it up with your schools Financial Aid department. I'm sure they'd be happy to explain it to you....

What you are just failing to see is that you are taking money you don't need. Student loans are not low interest loans intended to finance your car loan.

I was trying to make a point and obviously, my opinion is in the definite minority. So I'll just leave this hot topic be...

[Rudey]

Originally posted by Discotish
"When your school determined your federal financial aid award, it used a standard budget to estimate the expenses you would incur while attending school. This expense estimate is referred to as your cost of attendance (COA). If you can reduce your expenses to an amount less than the school's estimated COA, you might not need to borrow as much as the school has awarded" If you're so interested, take it up with your schools Financial Aid department. I'm sure they'd be happy to explain it to you....

What you are just failing to see is that you are taking money you don't need. Student loans are not low interest loans intended to finance your car loan.

I was trying to make a point and obviously, my opinion is in the definite minority. So I'll just leave this hot topic be...

I don't think anyone is fighting with you and you're entitled to your opinion. Regardless I see that loan as something you're entitled to while in college and since you're paying money back for the loans at a competitive rate above interest, a bank is still making money off of you. These aren't cash grants for being a poor student.

-Rudey

[GeekyPenguin]

Originally posted by Discotish
"When your school determined your federal financial aid award, it used a standard budget to estimate the expenses you would incur while attending school. This expense estimate is referred to as your cost of attendance (COA). If you can reduce your expenses to an amount less than the school's estimated COA, you might not need to borrow as much as the school has awarded" If you're so interested, take it up with your schools Financial Aid department. I'm sure they'd be happy to explain it to you....

What you are just failing to see is that you are taking money you don't need. Student loans are not low interest loans intended to finance your car loan.

I was trying to make a point and obviously, my opinion is in the definite minority. So I'll just leave this hot topic be...

It is money I need, the school thought I "needed" it. How do you know what I do and do not need? I could have paid for my car over 15 years working at the mall, or paid that money towards my tuiton and used my student loan for the car payment and gotten it paid off quicker. If the federal govt was actually concerned about this, they wouldn't allow such enourmous refund checks to be issued to people.

[winnieb]

Originally posted by Discotish
.

Student loans are to help students pay tuition, housing, etc...they are not all purpose loans for your own personal use for whatevery you want, just because of the low rates. You want to get a low interest loan for investments,a car, whatever...maintain a good credit rating and go to a bank. Don't freeload off the government and take loan money from people who really need it

If someone is awarded loan money for college to cover expenses and that person lives at the level below what their estimated needs are and they invest the money-- illegal??? NO. financially savvy?? YES.

And back to your questions Rudey....
I consolidated about $65,000 in student loans through Direct Loans. Direct Loans is part of the William D Ford Foundation which is associated with the Dept of Education. When I consolidated I locked my rate in at something around 4%. Like you mentioned, as I make on time payments the interest rate is lowered.
As far as your current lendor being an ass about giving up the loans--- they can tell you you what the want, but the fact is they can't hold onto your loans. The lendor doesn't want to give up the interest income your loans are generating.
We consolidated my husband's loans also and had huge problems with the lendor. I had the monthly payments set up to come out of my checking each month. I requested they stop the auto pay due to the pending consolidation, they told me they could deny the consolidation and would not stop the auto pay. The month the consolidation was due to go through, I put a stop pay on the auto pay. I received confirmation from Direct Loans that the other company had been paid. A week later the b*tch from the old company called about the stop pay. I told her the loan was paid in full by Direct Loans, she hung up on me.
When I started my husband's consolidation, I mentioned the problems with the current lendor. Direct Loans told me not to worry about it, they could get it through.

They have been a great company to work with. Good luck.
-wendi

[Rudey]

Yeah I think I'm also going to be a prick and spend 10 minutes every day calling and asking to speak with someone until they get really pissed. They tried to tell me they'd let go of it only if I was delinquent in payments. I think only pricks work for these places.

-Rudey
--Prick is my word of the day

Originally posted by alphagam-alum
If someone is awarded loan money for college to cover expenses and that person lives at the level below what their estimated needs are and they invest the money-- illegal??? NO. financially savvy?? YES.

And back to your questions Rudey....
I consolidated about $65,000 in student loans through Direct Loans. Direct Loans is part of the William D Ford Foundation which is associated with the Dept of Education. When I consolidated I locked my rate in at something around 4%. Like you mentioned, as I make on time payments the interest rate is lowered.
As far as your current lendor being an ass about giving up the loans--- they can tell you you what the want, but the fact is they can't hold onto your loans. The lendor doesn't want to give up the interest income your loans are generating.
We consolidated my husband's loans also and had huge problems with the lendor. I had the monthly payments set up to come out of my checking each month. I requested they stop the auto pay due to the pending consolidation, they told me they could deny the consolidation and would not stop the auto pay. The month the consolidation was due to go through, I put a stop pay on the auto pay. I received confirmation from Direct Loans that the other company had been paid. A week later the b*tch from the old company called about the stop pay. I told her the loan was paid in full by Direct Loans, she hung up on me.
When I started my husband's consolidation, I mentioned the problems with the current lendor. Direct Loans told me not to worry about it, they could get it through.

They have been a great company to work with. Good luck.
-wendi

[kdonline]

I recommend watching the Suze Orman show on CNBC, which is on several times every weekend. She always has someone call up about student loans...and about debt...and about all these "just starting out; how do I deal with" questions.

[kappaloo]

Originally posted by GeekyPenguin
It is money I need, the school thought I "needed" it. How do you know what I do and do not need? I could have paid for my car over 15 years working at the mall, or paid that money towards my tuiton and used my student loan for the car payment and gotten it paid off quicker. If the federal govt was actually concerned about this, they wouldn't allow such enourmous refund checks to be issued to people.

See... here's where I get confused. I can understand a student loan being funnelled into an investment once wo the government's knowledge... but at least where I am, we have to disclose all investments on our loan applications - and they deduct this money from our loan (aka, you use your own money, then the loan). Hell, you even have to disclose your car because they will assume that you are going to sell it to help pay for school.

If you're lying on your apps to get this money - that's a different issue....

[aggieAXO]

Originally posted by Rudey
Go back to school half-time for a short amount of time, take out as small a loan as possible, and try and consolidate again and see if your rate shoots down

Rudey,
Unfortunately once you consolidate that is it -you cannot consolidate again . (believe me i have tried) I actually e-mailed Suze Orman to see what she thought about getting a home equity loan to pay off the student loans-home equaity loans were at about 4% earlier this summer but alas, in Texas you can only take 80% of your home equity and use it as a loan and that only would pay for 1/3 of my loans.

I am not sure if Discotish was also referring to me investing. I have already graduated (almost 7 years ago) and believe me I am paying heavily for these loans, in fact the first 12 months 99.9% of my payments per month (600$) went towards the interest. In school I had no way of paying for my tuition so I had to take out student loans, now that I have graduated and am in my 30's I have to think about retirement so investing to me is a bit more important right now then paying these off so I pay the minimum each month. Maybe all of the prisoners who are getting a "free" college education should pay some of the needy students tuition-but I guess that is an entirely different topic.

I did use part of my student loans (about 2000$) for car payments but how else was I suppose to get to and from school? (and don't say use the bus b/c the bus doesn't run in College station after 10 pm and when you are in veterinary school you are in labs sometimes well after 10)

No one I knew wanted student loans but it was a fact of life, I am just glad I graduated a several years ago, the new graduates have over 100,000$ worth of debt-I can't imagine having this monkey on my back.