ADVERTISEMENT

OT: Parent based Student Loan Advise needed

PeteGiam07

PeteGiam07

All Conference
Aug 29, 2007
4,363
981
113
I'd rather not give extensive details here, but if anyone is willing to talk in private messages it would be a great help.

Long story short.... Fiance is in huge student loan debt due to a Parent based student loan. Her interest rate is crazy to me at 7.5% and apparently we can't get it refinanced, lowered, or changed into her name alone due to her "parents" credit not being good enough.

I'm not well educated in student loans and I thought they were mostly based on an income-pay off rate when it comes to refinancing not just a credit. How can we get this 7.5% lowered and/or get this in her name? She is currently paying 1K a month to pay this and it is hurting us financially. We get no help from her parents on payments.

Thanks in advance.
 
I don't have great advice for you about this situation. When I graduated I got a second job at Sears working nights and weekends. Every penny from that job went into the Sears 401k, employee stock purchase program and to my student loans. Always pay more then the minimum. Pay of the one with the lower interest first by adding extra principle then roll that amount into the next one. I use this philosophy with everything. We used to have 2 car payment. Paid off my wife's car and now I am paying 1100 dollars per month on mine. 60 months down to 22 as I am hitting an extra grand a month in principle. Once that paid off 50% in saving for the next car and 50% towards the house.
 
  • Like
Reactions: MozRU
I had a similar situation but it was over 12 years ago and bank/credit/loan process was very different.

I took the $20k parent loan and paid it in full with a balance transfer to an Amex Blue Card. Amex was offering a 0% on balance transfers on up to $20k for I think 3 years. I paid around $550-600 a month and paid it off.

Not sure if you are dealing with more than $20k in parent loans or you can get a credit offer like that now.
 
Long time lurker here, but figured since I just went through a somewhat similar situation I might chime in. As you mentioned the interest rate is 7.5% I will assume that this is a private student loan and not a federal loan which could be eligible for an extended payment term or income based repayment.
I too have very large student debt and over the past 2 months have been shopping around with different companies looking at private loan refinancing. The first I applied to was Wells Fargo who offered me a rate of 7.9% which of course was higher than many of the loans I already had. I then went to some of the other 'non traditional' lenders namely Earnest and So-Fi. Earnest would not approve my loan without a cosigner however So-Fi did offer a more attractive rate at just under 6% for a fixed rate. So-Fi apparently puts more weight on the borrowers income and ability to pay vs credit score (though both are factors).
In the end, I went back to wells fargo and told them the rate I was offered with So-Fi and they reviewed my application and ended up offering me a slightly better rate than So-Fi did so I went with them in the end.
I guess the moral of the story is to shop around and if possible have the lenders compete against each other if possible.



*Edit: If the loan is a government loan such as a PLUS loan most traditional lenders will not refinance them, but companies such as So-Fi and Earnst will. So have a look at them.
 
Maybe I'm missing some and am a little confused but why does it matter to you that her parents' name is on the student loan. Was this a loan for her education or the parents? There is no benefit to the lender to remove a co-signee on the loan, as that is just another person that they can collect against if the loan goes delinquent. As for you and your fiancée, there is also no benefit to having their name off of the loan. It still needs to be repaid either way and all signees on the loan are on the hook.

You can look for credit card offers like the prior poster lists where they let you write checks for a low interest rate, but you have to be very disciplined to make sure the balance is paid off or moved elsewhere before that loan rolls to a full rate.

Your other options would be a secured loan of some sort (home equity) if you that kind of line available - probably not given your marital status.

Finally - you can't compare mortgage interest rates at 3.5% to student loan interest rates as there is nothing securing a student loan other than a promise to pay back. Lenders have to charge higher rates to make up for the obvious higher default risk.
 
Crazed_RU said:
Maybe I'm missing some and am a little confused but why does it matter to you that her parents' name is on the student loan. Was this a loan for her education or the parents? There is no benefit to the lender to remove a co-signee on the loan, as that is just another person that they can collect against if the loan goes delinquent. As for you and your fiancée, there is also no benefit to having their name off of the loan. It still needs to be repaid either way and all signees on the loan are on the hook.

You can look for credit card offers like the prior poster lists where they let you write checks for a low interest rate, but you have to be very disciplined to make sure the balance is paid off or moved elsewhere before that loan rolls to a full rate.

Your other options would be a secured loan of some sort (home equity) if you that kind of line available - probably not given your marital status.

Finally - you can't compare mortgage interest rates at 3.5% to student loan interest rates as there is nothing securing a student loan other than a promise to pay back. Lenders have to charge higher rates to make up for the obvious higher default risk.
Click to expand...

This is a fed loan.

The problem is we cannot get any kind of refianancing to a smaller percentage or longer term payment due to the fact her parents income is also considered. Like I said, her parents (who make a combined over 200k a year) have bad credit as they put everything on payment plans in their life.

My fiancee on the other hand is only at a $50K salary so as you can tell paying 1K a month (which is over minimum payment by about 100$) is very rough on us.

The loan is about 80K so I would think the credit card route is going to be hard to accomplish.
 
I guess where we are very confused is we believe her parents income vs. her lower income is making things hard for us and really don't know what to do about it. What makes it even more confusing is companies are telling us her parents credit is the reason we can't refinance.

I know several people who have more reasonable rates of between 4-5%. None of which are parent based loans though and I feel as if that is where our problem lies.
 
Crazed_RU said:
Maybe I'm missing some and am a little confused but why does it matter to you that her parents' name is on the student loan. Was this a loan for her education or the parents? There is no benefit to the lender to remove a co-signee on the loan, as that is just another person that they can collect against if the loan goes delinquent. As for you and your fiancée, there is also no benefit to having their name off of the loan. It still needs to be repaid either way and all signees on the loan are on the hook.

You can look for credit card offers like the prior poster lists where they let you write checks for a low interest rate, but you have to be very disciplined to make sure the balance is paid off or moved elsewhere before that loan rolls to a full rate.

Your other options would be a secured loan of some sort (home equity) if you that kind of line available - probably not given your marital status.

Finally - you can't compare mortgage interest rates at 3.5% to student loan interest rates as there is nothing securing a student loan other than a promise to pay back. Lenders have to charge higher rates to make up for the obvious higher default risk.
Click to expand...

This loan is for her education. Hence why she makes the payments and they don't.
 
Lesson number 1, don't get engaged until you know the other person's full financial picture. If I am correct, assuming a 10 year loan, which many college loans are, she owes $85k. That is insanity unless you tell us she is a doctor.

I would do a few things. First I would put off the weeding and allocate all the monies towards paying off the debt. Then I would elope. I am being serious here, spending huge amounts of money you don't have for weddings and college is a recipe for disaster and will put a ton of strain on you and your marriage. If the in laws are paying for any of the wedding then I would get them to put all that money against the loan.

Second, I would seriously clean up all of your debt and your fiance's debt. Get all credit cards paid off, car loans if any etc. With clean credit you can get a much lower rate that you are being offered. However even interest rate help will only reduce the payment a few hundred dollars a month. You will still be paying a shitload for 10 years or more. You need to drastically decrease the principal and stop worrying about the interest.

Last, I would show her the want ads. Maybe she can get a part time job a few nights a week for a the next decade.

Finally, I would want to understand why you are in this situation. Was it her parents that didn't plan for their child to go to college or was it her that needed to go to some college that costs much more that it was worth. Believe me I would want to understand this prior to saying I do.
 
  • Like
Reactions: eceres, Metropolitans3, Plum Street and 4 others
Odd how the parents are causing the issue. They tell you to get a parent to co-sign the loans in the first place to get better terms, then when you go to refinance they're telling you they're credit rating is hurting you refinance it and are now an albatross around your neck. Go figure.

Wonder why you can't refinance the loan without them. Once a "parent" loan always a parent loan? That's a bit discouraging since I'm the parent in such a situation who was looking to get out from under the co-signer position and have my daughter refinance on her own.
 
PeteGiam07 said:
This is a fed loan.

The problem is we cannot get any kind of refianancing to a smaller percentage or longer term payment due to the fact her parents income is also considered. Like I said, her parents (who make a combined over 200k a year) have bad credit as they put everything on payment plans in their life.

My fiancee on the other hand is only at a $50K salary so as you can tell paying 1K a month (which is over minimum payment by about 100$) is very rough on us.

The loan is about 80K so I would think the credit card route is going to be hard to accomplish.
Click to expand...
Have you called SoFi as they refinance federal, private & parent loans?
 
Last edited:
You might be mistaken about your assumptions about your future in laws credit rating. The use of credit does not cause a bad score. Managing a ton of credit successfully will generate a good score for the most part. As someone that creates credit scores for a living, if a bank is telling you that they will not refinance due to the parents credit, then the parents credit is good, not bad.

However you answered the question, no bank in the world is gonna give a person with $50k in income an $85k unsecured loan.

Believe me you need to attack the principal.
 
  • Like
Reactions: ATIOH
Here are your options -
  • Find a lender willing to give you the loan amount at a lower rate - e.g. HELOC, 401k, relatives, friends, etc
  • Look for ways to cut spending - e.g. give up that leased beamer, starbucks, etc
  • Look for ways to increase income - second job, another job, start a part time business, etc
If none of those options work - here are extreme solutions .........
  • Dump her
  • Declare bankruptcy
  • Call Bernie Sander and ask him to pay for it
Of course if all else fails, you can resort to what many people do - pray a lot and hope to win the lottery
 
  • Like
Reactions: Plum Street
Are all 3 loans the same amount, about $27k each or is one larger and the other 2 smaller ?
 
Thanks for the insite I'm
zgoru said:
Odd how the parents are causing the issue. They tell you to get a parent to co-sign the loans in the first place to get better terms, then when you go to refinance they're telling you they're credit rating is hurting you refinance it and are now an albatross around your neck. Go figure.

Wonder why you can't refinance the loan without them. Once a "parent" loan always a parent loan? That's a bit discouraging since I'm the parent in such a situation who was looking to get out from under the co-signer position and have my daughter refinance on her own.
Click to expand...

This is what I'm really trying to figure out. The way the system is set up I believe taking on this loan without them involved at all would be Better for us IMO.

I personally am good with money and have her taught how to balance and take care of her bills. I'm an engineer with an investment property and another property I currently live in. My issue is with how her parents handle finances as I think they lie to us about their situation and for some reason don't want to accept that 85K is a lot of debt money
 
Take out a home equity loan and pay them all off. Set up a payment schedule w your daughter. Pray she gets a job.
 
  • Like
Reactions: eceres
Leonard23 said:
Have you called SoFi as they refinance federal, private & parent loans?
Click to expand...

Her parents looked into First Republic & Citizen's bank, but this looks like the next step.

I don't know how hard her parents are trying. Even though this isn't in my name I can't sit back and wait for them to take care of this anymore.
 
Last edited:
PeteGiam07 said:
Thanks for the insite I'm


This is what I'm really trying to figure out. The way the system is set up I believe taking on this loan without them involved at all would be Better for us IMO.

I personally am good with money and have her taught how to balance and take care of her bills. I'm an engineer with an investment property and another property I currently live in. My issue is with how her parents handle finances as I think they lie to us about their situation and for some reason don't want to accept that 85K is a lot of debt money
Click to expand...
I guess this means her parents are not paying for the wedding?
I echo what the other poster said about the cost of the wedding. Elaborate weddings are a waste of money if it means you have to borrow to finance the wedding. An elaborate wedding that puts you further in debt will do nothing to add to marital bliss. Our wedding was quite simple and inexpensive 26 years ago, and we are thankful that my inlaws paid the entire amount.
Sorry for all of your financial stress. You sound a lot like me. Investment properties are great ideas. Best financial moves we ever made was buying rental properties instead of continuing to lose money in the stock market. When I retire, they will be paying a healthy monthly income to the point that we will not have to touch our retirement savings for day to day expenses.
 
My 2 cents - listen to the advice given by RU85inFla above.
 
Knight Shift said:
Investment properties are great ideas. Best financial moves we ever made was buying rental properties instead of continuing to lose money in the stock market. When I retire, they will be paying a healthy monthly income to the point that we will not have to touch our retirement savings for day to day expenses.
Click to expand...

That was my plan some 30 years ago, starting w/ a 2 family on Guilden St. It all went to hell 5 years later when I found out my partner who was collecting the rent and paying the mortgage, decided to stop paying the mortgage and use the money to buy coke instead.
 
newell138 said:
That was my plan some 30 years ago, starting w/ a 2 family on Guilden St. It all went to hell 5 years later when I found out my partner who was collecting the rent and paying the mortgage, decided to stop paying the mortgage and use the money to buy coke instead.
Click to expand...
was your partner @mildone? ;)

I would never partner up with someone. We backed into being landlords in a strange way, but it has worked out great. Two family beach rental and a two family a few miles from the beach. Market for new tenants is extremely strong. Sorry to hijack the thread--feel bad for OP.
 
RU85inFla said:
Lesson number 1, don't get engaged until you know the other person's full financial picture. If I am correct, assuming a 10 year loan, which many college loans are, she owes $85k. That is insanity unless you tell us she is a doctor.

I would do a few things. First I would put off the weeding and allocate all the monies towards paying off the debt. Then I would elope. I am being serious here, spending huge amounts of money you don't have for weddings and college is a recipe for disaster and will put a ton of strain on you and your marriage. If the in laws are paying for any of the wedding then I would get them to put all that money against the loan.

Second, I would seriously clean up all of your debt and your fiance's debt. Get all credit cards paid off, car loans if any etc. With clean credit you can get a much lower rate that you are being offered. However even interest rate help will only reduce the payment a few hundred dollars a month. You will still be paying a shitload for 10 years or more. You need to drastically decrease the principal and stop worrying about the interest.

Last, I would show her the want ads. Maybe she can get a part time job a few nights a week for a the next decade.

Finally, I would want to understand why you are in this situation. Was it her parents that didn't plan for their child to go to college or was it her that needed to go to some college that costs much more that it was worth. Believe me I would want to understand this prior to saying I do.
Click to expand...

It's a combination of both for the finally section.... I can't blame her as her parents did not teach her anything in terms of loans and getting into debt and gave her nothing for payment of her college education. If she knew she would be in this situation in before college she would have been an RA to save housing money.

We are good financially otherwise. The 1K a month payments and saving a few hundred a month go a long way. She drives a nissan sentra and we don't even have cable TV so don't think we waste away money on things we don't need...

We haven't even saved a date for the wedding and I have long wanted a small destination one. Her parents want to give money towards something bigger but I am getting to the point I am going to cut off anything they want to give us until they acknowledge and help us in some way with the current student debt.
 
PeteGiam07 said:
Her parents looked into First Republic & Citizen's bank, but this looks like the next step.

I don't know how hard her parents are trying. Even though this isn't in my name I can't sit back and wait for them to take care of this anymore.
Click to expand...
She should call to get the info & then tell the parents the details & expectations.
 
Knight Shift said:
was your partner @mildone? ;)

I would never partner up with someone. We backed into being landlords in a strange way, but it has worked out great. Two family beach rental and a two family a few miles from the beach. Market for new tenants is extremely strong. Sorry to hijack the thread--feel bad for OP.
Click to expand...

My brother does great in income properties and he got me into it. I have a 3 family brownstone and will most likely make my current place another income property in 5 or so years.
mal359 said:
For ****'s sake, do not do this, OP.
Click to expand...

Don't worry I knew not to do it once I realized he thought I was talking about my "daughter" lol
 
PeteGiam07 said:
My brother does great in income properties and he got me into it. I have a 3 family brownstone and will most likely make my current place another income property in 5 or so years.
Click to expand...
Keep going, you will not regret it. Don't let anyone talk you out of it by saying being a landlord sucks. We have very few problems in nearly 20 years. Two really bad situations over that time that resulted in the problems moving out or getting evicted. Don't rent to a person who has painted their car with a Sasquatch and sunflower mural or to a stripper with a pit bull.
 
Knight Shift said:
was your partner @mildone? ;)

I would never partner up with someone. We backed into being landlords in a strange way, but it has worked out great. Two family beach rental and a two family a few miles from the beach. Market for new tenants is extremely strong. Sorry to hijack the thread--feel bad for OP.
Click to expand...
Hey now. I was gonna pay him back.
 
Here's the problem... You are stressed about her payment but not willing to take on the debt.

You're choices are simple...
1. Take the debt on with your finance....
A. Heloc would be best rate as it is secured if you're sole owner and have available credit
B. Pay it off as fast as possible foregoing savings / other things

2. Consider it her problem and don't stress about it but ignore it. There's no ggoodeat answer if no one is willing to help your finance secure the debt.

3. Find a girl who went to a public school like RU.

Ultimately, the debt is part of the whole package with the girl. You either accept it like you would finding out about an illness or disability or move on.
 
  • Like
Reactions: ATIOH
So am I understanding that her parents with over $200,000 income did not help her with college
except to take out a loan with outrageous terms that she is expected to pay back?
 
PeteGiam07 said:
It's a combination of both for the finally section.... I can't blame her as her parents did not teach her anything in terms of loans and getting into debt and gave her nothing for payment of her college education. If she knew she would be in this situation in before college she would have been an RA to save housing money.

We are good financially otherwise. The 1K a month payments and saving a few hundred a month go a long way. She drives a nissan sentra and we don't even have cable TV so don't think we waste away money on things we don't need...

We haven't even saved a date for the wedding and I have long wanted a small destination one. Her parents want to give money towards something bigger but I am getting to the point I am going to cut off anything they want to give us until they acknowledge and help us in some way with the current student debt.
Click to expand...

Any chance you can sit down with her parents to discuss this? What ever they want to give for a wedding, tell them it would be better served to put it to the loan. $10k, $15k or anything will be helpful. Don't use your heloc for multiple reasons mentioned above. Has your fiancé asked her parents if they can help out with the loan? Even $100-$200 a month can go a long way. Maybe her parents can use their heloc for a lower rate and your fiancée gives them money monthly?

As ATIOH said, get your fiancée credit report today if you haven't done so already. You never know what you will find and by cleaning it up now, it will help in the future.

If you can refinance the loan it should stay in her and her parents name for now. Relationships don't always work and you don't want to take her debt in your name before you are married. (But don't get married before the debt is cleaned up).

My wife's parents didn't teach her anything about money either so I went through a similar situation many years ago, but not to this dollar amount. Now that I have 2 daughters of my own, I make sure they understand money so they will be financially independent.
 
  • Like
Reactions: PeteGiam07 and MoreCowbellRU
motorb54 said:
So am I understanding that her parents with over $200,000 income did not help her with college
except to take out a loan with outrageous terms that she is expected to pay back?
Click to expand...
Kind of hard to believe. I would think that the parents didn't want her to go to such an expensive college and if she made the choice, she would have to pay. It's difficult to not save with a $200,000 income.
 
PeteGiam07 said:
My brother does great in income properties and he got me into it. I have a 3 family brownstone and will most likely make my current place another income property in 5 or so years.


Don't worry I knew not to do it once I realized he thought I was talking about my "daughter" lol
Click to expand...


I'm glad to hear you are Not marrying your daughter! Lol. I waited til I was 40 to get married. She had 250k in cash, Had a lot of fun as a bachelor, but when it's time, it's time , I guess.
Good luck!
 
rutgersdave said:
Kind of hard to believe. I would think that the parents didn't want her to go to such an expensive college and if she made the choice, she would have to pay. It's difficult to not save with a $200,000 income.
Click to expand...

Yep, my thoughts too. They have multiple CC's and for some reason fianance everything. I don't get it. A sit down is probably going to happen with them and they want to buy us something for our new condo. In which me and the fiancee have already decided to turn them down and not accept any gifts from them not in the form of cash to help with the debt.

For those asking her credit is good with a score above 720. I looked into it years ago and taught her how to bring up her previous 600 score up.
 
  • Like
Reactions: RU205
You must log in or register to reply here.

Similar threads

Fat Koko

OT: Syracuse's dueling NIL collectives

Replies
2
Views
390
Rutgers Football
jaydogsmooth1
J
R

OT: Yahoo! e-mail help needed

Replies
19
Views
397
Rutgers Football
Big East Beast
B
C

Yellow lot parking cost increase

Replies
120
Views
2K
The Round Table
e5fdny
e5fdny
R

My thoughts on the Sarge article on Rutgers and NIL

Replies
8
Views
731
Rutgers Football
jaydogsmooth1
J
mb5789

Gavin Wimsatt/Athan Kaliakmanis Deep Dive Comparison

Replies
152
Views
3K
Rutgers Football
PSAL_Hoops
P
ADVERTISEMENT

Latest posts

ADVERTISEMENT
Top Bottom
Back