The Student Loan Nightmare

After reading several discouraging message posts from people with desperate needs to find answers to their student loan issues, I submit to you the following:



Every student loan issue is different. Grant it, the circumstances surrounding the student loan concerns are all too familiar, but solutions to those concerns can be solved in many ways.



Characteristics that are similar:



Student Loans are a long-term debt, usually 20-30 years. If you have had to finance any part of your education and you have not completed those payments, then you own a student loan.



According to USATODAY.com, posted 5/12/2003, the average person will have the following student loan qualities:



a. a total undergraduate debt of $18,900 (WOW!)

b. an average monthly payment of $182

c. payment representing a percentage of monthly income = 9%



Discharging a student loan is extremely difficult. If you have consolidated it in the past, you no longer have the option to discharge. If you have never consolidated, you will have to show EXTREME hardship in order to discharge, and even then it is subject to a judges - "extreme judgment".



Furthermore, you can only consolidate a student loan ONCE. If you have consolidated before, and you want to do it again now that the rates are low, TOUGH! You're stuck. Student loans are generally federally insured and have no statute of limitations. In short, you will always owe it, until you pay it off.



There is some good news though. The sun still shines.



If you have already begun making your payments and you have been out of school for a while, you still need to listen up. This information can be very valuable for the very passionate, frustrated, and determined person. That should be you....wake up from the student loan nightmare.



WAKE UP - NOWWWWWW!!!



Solutions:



1. Debt consolidation (either a loan or a refinance)

2. Debt negotiation (through debt settlement services or debt management services). This may not be an option for student loan debt with most of these companies, but I understand a few may include this type of debt, but certainly include your other debts so that you can maximize what you can do with your student loan debt.

* Quickly: a. Debt management - that's your credit counseling services, generally they advertise "non-profit", but hmmmmm - judge the situation for yourself. Anyway, they generally work for the creditors. Yes they may get your interests rates reduced, but you still pay the principal and a portion of the debt. When they reamortize, you still can end up paying a lot more than you originally thought. b. Debt Settlement: You see the ads for this. They actually convince you to skip payments so that your credit can be in a desperate enough situation so that they can negotiate it for you. Sounds like they are using you and helping you abuse your credit. What they are doing is convincing you to let your credit suffer so that they can have a job. GEEEE, you could let your credit suffer by yourself and negotiate your own reduced payments.

3. Straight out bankruptcy. While this is not a solution for student loan debt, it can help you manage your other debts, thereby freeing up room to pay your student loan debt. Likewise, it is not necessarily a good option, but for some people it may be their only option. If that is you, weigh the circumstances very carefully. Also, the House is contemplating passing a bill that will require individuals to go through a debt management agency before they can file bankruptcy. Good news and bad news there-think about it.

4. Company who specializes in debt management. Well you want them to specialize in debt elimination. They may charge a small set up fee and then a monthly fee. The key is is you are still in control of making your payments. However, they guide you through the process, help you establish a payment plan that will allow you to maximize your pay off dollars. You could pay off your debts in a fraction of your expected time without paying additional montly. You are the driver here, you take responsibility and you are empowered to keep yourself out of this type of debt situation again.

5. You can be creative. Use real estate financing:

-purchase a foreclosure home, or a pre-foreclosure. Use an investor/partner - why not?

-put a house under written contract by which you can have the rights to sell the house without ever owning it and you can make your profits on the front end. -save up and purchase a reasonable tax lien, sell it and make a profit

-if you are really interested in real estate and you are because you are here. Become an agent first, use your drive and knowledge, get a few sales off of your clients -- use that money to pay off your student loan debt.



Hey - there are many ways to skin a cat. Just because you want to be an investor does not mean you cannot start out being a saavy Real Estate Agent with INVESTOR qualities.



To all my friends out there who have posted "the what shall I do with this student loan debt" -- Whatever you do with that new found cash, pay off that student loan. I hope this was helpful.



Well that's it for now. Article 3 will have more exciting stuff on credit management.