Author Topic: Student Loan Help/Ideas  (Read 1137 times)

j250432

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Student Loan Help/Ideas
« on: May 09, 2017, 05:19:02 PM »
Hey Guys,

Allow me to preface this post by saying this is more of a question for my dad and the options we have as I am totally out of ideas. My father split my student loans 50/50 when I first started college. Since then, I have paid off my share (with the help and guidance of this board, despite me never posting thank you). However, my dad still has a relatively large sum left (About 30K).

The issue I am facing is the interest rate on the loans is 8.5% and he pays barely above the minimum, so the interest is steadily climbing. I have tried to look into alternative solutions (SoFi with me as a cosigner, etc) but they all reject us. The problem is he is technically retired from a government job he worked for 40 years and gets a pension from. The pension pays out about 50K on the books. He still works an under the table job for about 25K, but obviously SoFi and others do not allow that to be counted as additional realized income.

My question is: Is there anything else or anywhere else that may provide a lower interest rate for this remaining sum? I thought about a personal bank loan, but those are even higher.
« Last Edit: May 09, 2017, 05:49:53 PM by j250432 »

kayvent

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Re: Student Loan Help/Ideas
« Reply #1 on: May 09, 2017, 05:41:20 PM »
Being a Canadian, I was shocked when I learned that some student loans in other places are above 6%. Whomever decided usury was a good idea?

My question is: Is there anything else or anywhere else that may provide a lower interest rate for this remaining sum? I thought about a personal bank loan, but those are even higher.

The first, and only thing, that comes to mind is a HELOC. These may be called 'reverse mortgages' where you live.

A part from that, you could try to eat down the amount. I obviously don't know what your agreement was, how much you make, how long it took you to pay down your half, how the family dynamics work but one way to address that interest is to help your dad pay down the loan. To illustrate that, say if you can pay 10K/year for three years and he covers the interest, you "only" save 6$ per basis point over three years by switching to a lower interest loan.

Lady SA

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Re: Student Loan Help/Ideas
« Reply #2 on: May 09, 2017, 09:58:40 PM »
I can't think of any place that would refinance those loans at a lower interest rate if that is your dad's financial situation. Like Kayvent said, maybe a HELOC? I don't know much about those and can't recommend them.

What kind of loans are they, federal parental loans (I forget the term of these) or private loans through a bank or something? I'm not sure if those parental loans have income-based repayment or other federal perks he could take advantage of.

Other thoughts:
Are you and your dad close? Is he responsible? Is the reason he is struggling with payments because of the high interest or because of poor financial decisions?
Another off the wall idea that might not be a great one is for YOU to either refinance the remaining loan into your name and your dad pays you back, or for you to assist with payments and then your dad can pay you back over time. Definitely not the greatest solution by far, but since he went out on a limb for you to get an education and he seems to be drowning with payments now, IF you are in a better place financially and IF you trust him, you could take the opportunity to bail him out. That would put the entire burden in the eyes of the loan company back on you though which could backfire, so think that through quite carefully and weigh all the pros and cons.
Not sure how either of you would feel about that, but I'm not sure there are many other options.