Paying Your Student Loan Mortgage | 04.03.09
What do three of my friends who do not own a home, and me, who is a home owner have in common? Answer, we all have monthly payments in the $1,200 – $1,600 range. The big difference is that my money is going toward my home while there’s is going toward their student loan payments.
They use words like debilitating, crippling, suffocating, and nauseating, when describing their student loan monthly payment. I can tell you we’ve had a few long Friday nights where they drank themselves silly.
I distinctly recall saying to my friend Dan one night, who did you think was going to pay for the loans when you got out of school? He said I was young and didn’t realize how much money was accruing and just figured I’d get a job and pay it off. He then reminded me about a time when I rode on the roof of our friends Bronco while going 50mph. We were both young, dumb, and made some regretful decisions.
I guess that’s why I have a soft spot in my heart for anyone in the same position as my friends. I have seen the mental anguish and stress that has washed over them first hand. I mean, it wasn’t like they went out and bought a porshe here. They went to school to better themselves and become a productive member of society. But the good news is that help is on the way.
Part of the College Cost Reduction and Access Act of 2007 calls for an Income-Based Repayment Plan for those qualified individuals with federal loans (such as the Perkins, Stafford, and Grad Plus). The program will cap off borrower’s monthly payments at 10% of their gross income for 25 years with the rest of the debt being forgiven. This call to action will go into effect on July 1.
Be sure to speak to your lender regarding an income-based repayment plan this summer if you are behind the eight ball. I want that eight ball buried in the corner pocket!
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I am one of these poeple who later in life finsished my degree using student loans and also recently put my son thru college using parent plus loans over and above his stafford loans and now I have one of those sufficating payments. My loan interest rates under the parent plus loans kept climbing to 8% where as When I started years ago and when back to school they were at 3%. I wish we could see some reform to help us with low interest rates offered to those in my position and also loan consolidation with those low interest rates.
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