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Student Loan Question

Old 01-09-2008, 11:13 AM
  #31  
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Originally Posted by cbire880
Sheesh, welcome to the new America, where we saddle our new workers with large debts to keep them enslaved to the system for as long as possible.
The new America is people choosing to be under the bondage of debt.

The borrower is slave to the lender.

Last edited by Led Zep; 01-09-2008 at 11:51 AM.
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Old 01-09-2008, 11:28 AM
  #32  
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Originally Posted by Led Zep
Last time I checked, no one was holding a gun to my head forcing me to take out a loan or choose (keyword: choose) to go into debt.

The new America is people choosing to be under the bondage of debt.

The borrower is slave to the lender.
Agree completely. My problem is that we are not doing a very good job educating young people of what they are getting themselves into. The high school guidance counselor mantra is just "get financial aid" or in plain-speak, take out a loan. We are pushing more and more people to go to college who probably don't need to go to college. They take out massive loans and get relatively worthless degrees just for the sake of having them. There are other ways to get to where you are going, they just might take a little while longer. You might not be able to start at the regional airline at 21, you just might have to wait a few more years.
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Old 01-09-2008, 11:45 AM
  #33  
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I even asked Collections to define "something". Unfortunately, $100/mo is nowhere near $650/mo and I got my first wake-up call right after Xmas. They tapped my checking account for the remaining $330 that was in there making it nearly impossible to cover my rent check for December. When I called them on it, they referenced my Promissary Note which says that they can do that. I called some other people "in the know" and they informed me that the next play in the Collection's playbook is to either tap my wife's account (currently live in WI) OR begin garnishing my wages.
DO NOT give a collection agency ANY personal information. You are under NO legal obligation to even talk to these people. It is perfectly legal for you to just hang up the phone - and I would recommend doing just that when they call again. They have no legal right to tap into your bank accounts OR garnish your wages until they go to court. They will tell you they can do this, but what they are leaving out is the fact that they MUST go to court in order to do so. They are trying to intimidate you into handing them over a blank check.

My advice to you is this: close your existing accounts and open new ones. Do not give your bank account information to anyone calling you looking for money. As you have seen, they will rob you blind if they are given the opportunity to do so. If they keep calling, then unplug the phone.

If I funnel the money through my wife's account......they'll find it eventually. I've already switched bank accounts....but, they'll find that in time.
O.K., I didn't read far enough ahead before I responded. Good, you have new accounts. They may find it, but they CANNOT tap into it unless one of two things occur: either you give them the information voluntarily, or, they go to court and get the LEGAL authority to do so. Remember, they are a collection agency, not a government agency. It's one thing for the government to do something, it's an entirely different thing for a collection agency to do so. Also, research what your rights are with regards to dealing with collectors. For example, it is illegal for them to contact your family, friends, employer, etc., and discuss YOUR situation with THEM.

why on earth did I think that borrowing nearly $76k ($23k/federal, $53k/private) was a good investment at making $23k/yr?
Hindsight is always 20/20. Let what is in the past stay there and look forward. i.e., a game-plan to get out of this mess. In your first post, you asked for advice. I'll give you my $0.02 on the topic. You may not like some of it, but hopefully it will be helpful nonetheless.

FIRST: put a written budget on paper. Analyze what is coming in, what is going out, and where is it going. Once you have the basics (food, clothing, and shelter) covered, cut out EVERYTHING that is non-essential from your budget. That may include internet, cable t.v., entertainment, etc.. This may sound drastic, but drastic times call for drastic measures.

SECOND: increase your positive cash flow through extra income. Discuss these questions with your spouse: can either/both of you take on extra work? Can you take a part-time job in your time off? Can you sell some things that may bring you extra income? If you have two cars, can you survive with one? Also, and this might be hard to hear and apply, but do you have any friends or family you can stay with for free or practically free? It would free up some or all of the money you are paying for rent and would allow you to throw it at your debt.

THIRD: for the short-term look at reducing the monthly payments. For the long-term, however, look at paying this monster off in LESS than 15 years.

You borrowed $76K. You stated your minimum monthly payments are $650.00/month for 15 years. 15 years equates to 180 months. $650/mo over 180 months (15 years) will cost you $117K - $41K more than your principal.

Here is what you have going for you. Your career, through CBA's, will allow you an increase in pay each year. You will also get a pay raise once you upgrade, so you won't be at $23K/yr forever. It's going to be tight for a while, but your pay does increase.

Remember this also. Broke is a condition and poor is a state of mind. Make up your mind right now that you are going to pull out all the stops and erase this debt once and for all. Turn the land inside out looking for every penny you can get your hands on - and then throw every penny you can toward this debt.

It can be done. It's going to require some serious sacrifice, but it is an attainable goal. It's been done before and your situation shouldn't have to be any different.
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Old 01-09-2008, 11:50 AM
  #34  
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Originally Posted by cbire880
Agree completely. My problem is that we are not doing a very good job educating young people of what they are getting themselves into. The high school guidance counselor mantra is just "get financial aid" or in plain-speak, take out a loan. We are pushing more and more people to go to college who probably don't need to go to college. They take out massive loans and get relatively worthless degrees just for the sake of having them. There are other ways to get to where you are going, they just might take a little while longer. You might not be able to start at the regional airline at 21, you just might have to wait a few more years.
You hit the nail on the head, cbire. We are doing a very lousy job of informing the consumer of the dangers associated with debt and borrowing. I would love to see some legislation passed that would require high school students to complete a class that addresses this topic completely. Unfortunately, most people are not aware of the dangers and find out only after they start sinking in debt. Sadly, a lot of these people continue the cycle once they are in it.

You might not be able to start at the regional airline at 21, you just might have to wait a few more years.
Yep. The 'ol saying says "anything worth having is worth the wait", or something along those lines.
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Old 01-09-2008, 12:02 PM
  #35  
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i see led zep that you are a dave ramsey listener as well. We just paid off my wife's student loans and I am paying cash for my private. I have, up to this point, been thinking about taking about 45K(I will have 10K saved) loan for ATP and then going back to my desk job and flight instructing on the side until most of the loan is paid off. I don't know if it is a good idea or maybe I should get off my butt and get a second job until we can pay cash. Thing is my wife and I can easily live off of her income and have plenty to spare. I was also thinking I would quit my job all together, use whatever I made cfi'ing and something else and pay it off that way. I don't know if it is a good plan or not. I just paid off 20K worth of debt in 7 months working an extra job, and my wife's income. I know I could pay this off but the kicker is whether to do it before or after the school or maybe go to school gradually. I'm weary of that because my wife wants to have kids fairly soon. Decisions decisions.
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Old 01-09-2008, 12:10 PM
  #36  
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I consider anything uner 1,000K in payments fortunate. I have just over 150K in student loans out. my monthly payments are around 1500 a month. I will make just enough, first year fo, to pay student loans and nothing else. I moved back in with my parents, ask for lunch money, and drive their cars so I dont have to pay for gas. It sucks, just find yourself a sugar momma and youll be alright
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Old 01-09-2008, 12:25 PM
  #37  
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Originally Posted by mattisawesome
i see led zep that you are a dave ramsey listener as well. We just paid off my wife's student loans and I am paying cash for my private. I have, up to this point, been thinking about taking about 45K(I will have 10K saved) loan for ATP and then going back to my desk job and flight instructing on the side until most of the loan is paid off. I don't know if it is a good idea or maybe I should get off my butt and get a second job until we can pay cash. Thing is my wife and I can easily live off of her income and have plenty to spare. I was also thinking I would quit my job all together, use whatever I made cfi'ing and something else and pay it off that way. I don't know if it is a good plan or not. I just paid off 20K worth of debt in 7 months working an extra job, and my wife's income. I know I could pay this off but the kicker is whether to do it before or after the school or maybe go to school gradually. I'm weary of that because my wife wants to have kids fairly soon. Decisions decisions.
Hi Matt,
Yes, big listener of Dave Ramsey and a big believer in his advice. First, congrats on paying off the debt, $20K in 7 months is a huge accomplishment!

I don't know if it is a good idea or maybe I should get off my butt and get a second job until we can pay cash.
I think you may know what my advice is going to be.

Good question though. Right off the bat, I would advise to save the money first and pay cash. The money you will save by not paying interest will afford you nice lunches between flights.

Let's look at the numbers. $45K to go to ATP. You and your wife (congrats again, btw) paid off $20K in 7 months. If you were able to pay off $20K in 7 months, you could certainly save $20K in 7 months. What I would do is to continue to save until you have the cash. I would also look into two other things as well.

First, I would look into (if you haven't looked already) saving money into an account that pays a much higher interest rate than that of a traditional savings account. Second, would it be more affordable to train with another school? I would make the first mandatory and the second up to your discretion.

Thing is my wife and I can easily live off of her income and have plenty to spare. I was also thinking I would quit my job all together, use whatever I made cfi'ing and something else and pay it off that way.
If you don't mind delaying your flight training a little while longer, you will have much more freedom when you are done. Either way you are going to have to work hard. Personally, I would work harder at the beginning and let the interest work in my favor.
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Old 01-09-2008, 12:57 PM
  #38  
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Originally Posted by Cubdriver
There are raging debates on here about the merits of racking up big loan debts to become an airline pilot. The job doesn't pay enough to pay them back, and it takes years to get to the point where you can pay effectively if you even want to.

I would consider staying out of any such job that cannot pay down your student debts by performing it. There are lots of jobs out there that pay more than entry level piloting. They are not fun but they are there. Go into flying when you can afford it, for what its worth.
You bring up a good point. If you don't earn any money doing something you love, the IRS considers that a hobby. I guess the advice for this career (and any for that matter) is to make a list of pro's and con's and then make an educated decision based on the results.
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Old 01-09-2008, 01:00 PM
  #39  
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Originally Posted by FlyByCable
Oh the beauty of only having a high school diploma. Good luck with your repayment efforts and remember to pay yourself first before repaying the bank.
HAHA- You're a class act, kid.
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Old 01-09-2008, 01:06 PM
  #40  
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i just thought of something as well. did you like flight instructing? If you did then you might want to look into becoming a teacher. In many parts of the country they are desperate for teachers and it is easier to get into then you think. In new jersey they have a program for teachers thats labeled "alternate route." It is only in areas where they are desperate for teachers. you basically teach for a year and pay for someone to mentor you (1000 bucks), you get full benefits, have to take two college courses in your free time and the pay is about 44 grand your first yr in new jersey. After two years of teaching (i think its 2 might be 3) they wipe off your student loan debts. Might be an option. Its not flying but it pays the bills and beats worrying about money. Just an idea
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