Student Loan Consolidation Advice for $100k+ in loans

[WildernessDowntown]

Hopefully I can stumble across someone here who has gone through this recently - I have about $35k of student loans in my name in a combination of school and federally subsidized loans. My dad had about $65k in his name as Parent Plus loans.

Was wondering if anyone has had luck consolidating loans and if that helped. I'm paying all of my loans back and starting to pay 2/3 of my dad's loans, so it looks like I'll be paying $750 a month in student loans, which I think is a little steep. My income is about $70k a year before taxes and I recently got a huge raise to this level which is why I'm paying back my pa's.

Let me know of any advice on this topic. I've looked into the federal consolidation 6 months ago but at the time it didn't look like that much of a difference.

I don't qualify for any financial hardship help for reducing the costs, but I'd like to take it down to sub $500 to pay my car and credit card debt off quicker.

Thanks!

[unpolloloco]

Essentially, you're at 80K of student loans (100k-1/3 of parent plus) + car + cc.  This is a problem!  Do everything you can to fix this ASAP.

Since that's out of the way, you're extremely unlikely to get <$500 on 80k worth of loans.  Using the student loan calculator here: http://www.finaid.org/calculators/loanpayments.phtml, you'd be paying $670/month if your interest rate was at 0% (for a standard 10 year loan term).  Find other ways to cut out expenses and increase income.

[Karl]

Depending on your degree area, you might have the option to take a public service position and then have some/all of your loans forgiven. 

[Owl]

Apply for Income Based repayment (you can only do this for the loans in your name). This will keep you interest from compounding, and the gov will even pay unpaid interest on the subsidized ones for 3 years.
This will allow you to pay down the principal faster. It may also lower the payment on that loan, allowing you to focus more on the PLUS loan and potentially get you under $500.

[grantmeaname]

Make sure to focus on your highest-interest debt with any discretionary funds you have left over at the end of the month, too. Your money will work a lot harder if you pay down 15% credit card debt than a 2% auto loan.

[WildernessDowntown]

Essentially, you're at 80K of student loans (100k-1/3 of parent plus) + car + cc.  This is a problem!  Do everything you can to fix this ASAP.

Since that's out of the way, you're extremely unlikely to get <$500 on 80k worth of loans.  Using the student loan calculator here: http://www.finaid.org/calculators/loanpayments.phtml, you'd be paying $670/month if your interest rate was at 0% (for a standard 10 year loan term).  Find other ways to cut out expenses and increase income.

That's a great calculator. Yes I'm definitely working on increasing income, taking on freelance clients on top of my 9-5. But glad you can confirm that it's tough to get it below $500 because I was running into issues trying to lower it as well.

[WildernessDowntown]

Apply for Income Based repayment (you can only do this for the loans in your name). This will keep you interest from compounding, and the gov will even pay unpaid interest on the subsidized ones for 3 years.
This will allow you to pay down the principal faster. It may also lower the payment on that loan, allowing you to focus more on the PLUS loan and potentially get you under $500.

I believe I tried this already, but I'll try it again and double check. Thanks!

[nawhite]

I'm working on my 100K+ right now myself. Some comments about consolidating.

First thing to be aware of: all federal loans made since 2006 have a fixed interest rate. This means that when you consolidate, they will only give you the weighted average interest rate (if you have 1 loan for 10k @ 10% and one for 5k @ 5% your consolidated rate would be 8.34%). To pay less in interest it would be in your best interest to not consolidate and put the extra money towards the loans with higher interest rates.

Next, if you need to decrease your payment you have a few options with your federal loans but any private loans you have may not have any options for changing payment plans. With the federal loans you can change to a 25 year payment plan, a graduated payment plan (starts low now but goes up fast) or an income based repayment plan (rather strict requirements but there is a chance that if you pay all 25 years on time, you could have the balance forgiven). All of these plans may cost you less month to month but they will cost you much much much more in interest over the life of the loan.

Given your loan amounts, I assume you have private loans as well as federal ones. Depending on the loan, refinancing may be an option but it may not be. You need to read the specifics from your lender. Also be aware that right now, most private student loans that are based on a variable interest rate have some of the lowest interest rates you can find anywhere (often times cheaper money than a mortgage). Granted they are variable and this will change but it is something to be aware of. You may want to pay them off more slowly than other higher interest rate loans (like your CC's).

[WildernessDowntown]

Given your loan amounts, I assume you have private loans as well as federal ones. Depending on the loan, refinancing may be an option but it may not be. You need to read the specifics from your lender. Also be aware that right now, most private student loans that are based on a variable interest rate have some of the lowest interest rates you can find anywhere (often times cheaper money than a mortgage). Granted they are variable and this will change but it is something to be aware of. You may want to pay them off more slowly than other higher interest rate loans (like your CC's).

Yea I'll look into that 25 year repayment plan, might not be the best over the life of the loan, but for now when I should be paying off higher interest items, that might be a better route.

Thankfully, I don't have any private loans, 60k of it is in the form of a Parent Plus loan which is some sort of federally subsidized loan to my parents but made through a big bank.

Thanks!