Student Loans

Parent Q&A

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  • Hello, I am looking for a recommendation for a financial advisor who is experience with federal student loans and various forgiveness programs like the Public Service Loan Forgiveness program.  There has been new legislation pass in the last few years and I want to make sure I understand everything and where I stand with my student loans.  I keep getting cold calls or letters around these programs and I am not sure how accurate their information is.


    I don't know about specific financial advisors, but have been enrolled with the PSLF for the past 3 years.  I can speak to that program -- and have found it relatively easy to get questions answered about the program.  I have noticed that within the past year, the guidelines for what "qualifies" have softened a bit.  It is only one of two loan forgiveness programs that you don't end up paying taxes on once forgiven!

Archived Q&A and Reviews


Financial Advisor - need student debt advice

May 2013

Hello, I am looking for someone who will be able to give me advice on managing my student loan debt. Can anyone recommend someone who knows the different repayment options offered by the federal government and can advise me on how to manage my loan? Thanks!

I work in financial aid at UC Berkeley. Please know that you do not need to hire a special financial advisor to help you with your student loans. Hopefully, when you left school, you did your loan exit counseling. If not, you can still do this via the federal site, . The only way to manage your loans is via this site.

There are several repayment options, some of which carry higher payments over time if you cannot afford to pay them back right away or if you cannot make the minimum payment. But the most important thing to do is to begin repaying them once you do go into repayment or at least make arrangements to go into forbearance. It is not possible to have student loans dismissed through bankruptcy, and of course, default has negative consequences. Your servicer (or servicers, as you may have more than one - you can find out by going to the federal site) will work with you to help you pick the right payment plan. A standard repayment plan is the best because it is the least expensive over time. The main thing is not to be fearful or intimidated by the process. It's pretty straightforward. Sarah

I recently learned about Income Based Repayment - a federal program that bases your monthly payment on your yearly income. If you pay back through this avenue and still have a balance after 20-25 years the remainder of your loan is forgiven. If your loan is in collections you can get it out by calling Federal Direct if you sign up through this program. Your lender can walk you through step by step. I have lowed my payments from 410/mo to 0/mo. I hope this helps!

Student Loan Default Repayment Help Needed

Sept 2012

Hello, I just found out that my finance defaulted on student debt and now needs to repay it. I am thankful to know but we want to be smart about how we negotiate the repayment with the collections agency. Can anyone recommend an attorney who could answer our many questions (what wiggle room do we have in negotiating a monthly amount, should we get married now, how might this affect our tax filings, etc.) ? Please please make any recommendation or provide any advice. Thank you, Judy

Hi there, My husband also had been in default on his student loan for years when we got married. Right before we got married, I got him to call and get on a payment plan. Turns out that his finance company had turned his loan back over to the gov't already so he made arrangements with the agency- don't remember the exact name, but it wasn't a private company. The only option available to him was automatic withdrawal from a checking account. He signed up for the lowest amount available, didn't worry about the penalties he had accumulated over the years (his theory is he will never pay it off anyway) and went from there. Since then, he has been in default a few more times, I have just started ignoring it. When we apply for any type of credit, I always apply under my own credit. In California you have the option to select whether you want them to look at both your credit or only yours. I always select mine. It hasn't held us back in either home or car loans, which is the only two things that people really need good credit for. You can always add him/her to the title/deed later. It hasn't affected our taxes that I know of. wife with good credit

While there was wisdom in the response you got this week (let him deal with his student loan; keep your credit separate) I think there is another aspect to the issue worth noting. What are you and your fiance's attitude to money in general- -is the student loan issue unique or part of a pattern? I come from the perspective of a 20 year marriage in which we both worked; covered joint household expenses; I saved a lot, and my husband accumulated over $90,000 of credit card debt. When we divorced, under the law, he was entitled to half my savings, and I to half his debts....fortunately he did not insist on that outcome--but he could have... marriage is about money, not just love...

Huge sallie mae loan coming due

Jan 2008

My best friend has gotten into a dire money situation and I'd like to ask advice on her behalf. She took out a private loan through Sallie Mae to put herself through cooking school- Calif. Culinary Academy- the one that's gotten the bad press about pressuring people to enroll, pretending that they're 'selective', 'creative' financing, etc. Basically, she took the 'creative' financing, didn't read the small print of course, BUT was also misled by the counselors there who told her she could pay her loans off easily AND by how much her degree would be in demand by high paying employers. So now she's working in a pizza kitchen, making exactly what you would imagine and now her loans are due. A $40,000 loan is now up to $90,000 or something similar. She has a family of 4, works full time, so does her husband. Her payments are scheduled to be taken out of her check in the next few months, and it will be about $800 per month. This will make it impossible for her to pay all her other bills or just live day to day. She has already done the forebarance thing and tried to switch her loan to another company, but they only do that for government loans, not private. Someone told her she needs to go in front of a judge with a pro bono lawyer and state her case, maybe the judge can lower her payments or something. Some questions she has are- are there any lawyers who would take a pro bono case like this, is there any other way to get to the judge, or any other avenues she should take? She does not want a free ride, she wants to pay her debt, she just needs to be able to do it at a more reasonable rate than $800 per month. She's read articles of other people being misled by private loan companies, and the CCA itself and wants to know how to find these people, or if anyone knows of a class action lawsuit or anything else she should be doing. She is doing her own research, but I'd really like to help her as she doesn't have access to this great forum. thanks for any advice. concerned friend

My best advice is this if she has two or more loans she can consider consolidating the loans with Sallie Mae. (Some loans are done through a lender and may be called a particular loan such as Stafford substidized or unsubstidized.) I would say that there are two things she can do. 1 stick her head in the sand, stress and create more stress- not recommended. 2 Talk to your loan lender and get through the Sallie Mae phone tree crap- talk to a live person. She may be able to consolidate which may lower her payments by half and increase the amount of time to pay. Or, go through some other option. The important thing to do is communicate with your lender otherwise she could default and ruin her credit. Bite the bullet and make the call. Also, see about getting a different job. It probably is competitive so sell yourself. Best wishes! Student loan queen

I hired a lawyer for $2500.00 in which I had to credit card to fight my student loans. I was standing in federal bankruptcy court and federal judge that had a tongue that cut like a razor. I have osteoarthritis, degenerative disc disease, and many other health issues and just had nerve buring in my spine. That is the only treatment, not a cure. I cannot lift anything over 20lbs. Let me tell you how it is for me. I don't want to make your friend feel bad. The judge told me to go on the William B. Ford program through the dept. of education with the state of ca. That saved me for four years. You may want to look into this and apply directly. Then the dept. of education told me to go onto disability because all of my forbearances have been depleted on the Ford Program, but if I did that, my loan which is now $200,000 (started at $40,000) will count as income. I will have to pay taxes on it to the irs, in which I have no way of paying that. Then the irs will take it out of my disability check until I am 70. I recommend the process of the Ford program. Truthfully the more kids you have the less they make you pay. About $5 a month until you are 70, inheritance, and so forth. Tell everyone never to get student loans. Pay for it or or leave it behind. It is not worth it. D

Pay off student loans or save for college?

Oct 2007

Hi -- my original question was going to be, ''If I have an ''extra'' thousand dollars, would it be wiser to use it to pay down my student loans (3900 at 7%) or invest it and start saving for my 11 month old daughter's education?'' But then I realized that I really don't know where to start regarding, first, even understanding what the heck I borrowed and how it need to be paid back, and second, what is the best way to save for my kid's education -- I've got nothing started yet. If anyone could either answer that thousand dollar question or point me in the direction of learning more about loans and finance and saving, I'd sure appreciate it. (BTW, I am overseas right now, so perhaps online resources would be more useful than books...) Thanks! kevin

I would pay off your student loan first. Then take the amount of money you were paying on that loan and just start paying it to a savings account for college (plus any extra you'd like to include). That way it's a little more painless. And for savings plans, there are a lot of options, including the 529 plan (Google it), CDs or money market accounts. CDs and money markets can have lower interest but aren't tied to stock market risk, so you have to decide which is right for you. Best wishes! Saving is Super

Pay off the loan. Then save. Having college paid off will give you more credit options going forward. It's tough to recommend a specific savings plan not knowing more about your financial situation. Maybe you should visit a bank representative recommended by people in your area overseas, and ask for advice given the details of your finances. -anon

Don't save it unless you are sure to make more interest than the interest you are paying on your student loans. Unless it is really a lot more, I would say, just pay off your own loan. It sounded like you really don't owe much and you need to pay it some day. If you were going to save it for something, you should save for your own retirement before your kid's college anyway. anon

Pay off your student loans. And also start saving for your retirement. I think it's great to think of our kids, but we have to think of ourselves too.

I've read a few book on saving for retirement, and some of them actually say DON'T save for kids education, save as much as you can for retirement. I agree with this philosophy. I know college is way more expensive that it was when I went, but the cost of a comfortable retirement is skyrocketing too. It's the belief of some financial planners that one can ''wing it'' with a child's college....maybe they'll stay in state, maybe they work to help with tuition, maybe they'll get student loans....but you can NEVER, EVER ''wing'' retirement.

I have a son who I love dearly and if he wants to go to college we'll find a way (maybe I'll even have to dip into my retirement) but my first priority financially is my retirement. I think more adults should think this way.... monica

First of all, it's wonderful that you may have extra money to either pay off loans or invest in your child's future. When we had our first child, I started investing in a 529 plan through the state of California. Now every state has one, and you can invest in any state's plan, not just the state you live in. Basically, it works like a 401(k) plan in that you contribute money to the plan and the dollars are invested in various stock plans that you choose, based on your risk level and the age of the child. As the child gets closer to 18, you can change your risk level to minimize any loss in what you've already invested. You can either save with each paycheck or send the money in yourself when you have extra. Check out for more info on these plans. Personally, I would pay off my debt or invest in my own 401(k) plan before saving for a kid's education, simply because it's easier to get a low-interest loan for college than it is to find a loan to pay off debt and no one is going to pay for your retirement except you, so the choice is easy. And once the debt is paid off, you'll have more to contribute to the education fund. Good luck! Pam

I would do both but put the 1000 toward your loan. You want to get rid of any interest loans first, so that you can minimize what you ultimately pay. (The best rate on a cd right now is about 5 something percent, so you will lose approx 1 percent if you put the money in a cd now rather than pay your loan). Your interest sounds a bit high, so I might check and see if there's a way to lower it.

It's great that you're thinking about saving for your daughter's education, and you might ask family to chip in too at gift time. I've heard that bonds are good for education and cds are about to go down at the end of this year unfortunately, so bonds may be the better bet. This always fluctuates so check the rates first and good luck.

P.S. There are good financial advice pages right there in yahoo, so that may be a good place to start.