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What Crazy Thing Would You Do To Pay Off Your Student Loans?

Video thumbnail for youtube video 6 Tips For Simplifying Your Financial LifeThe statistics are overwhelming and appalling. Students graduated from college this year owing an average of more than $29,000. Student loan debt now totals more than $1 trillion. Sixty percent of recent graduates have been unable to find jobs in their fields. Graduates age 24 and younger face a very uncertain job future and many experts say it’s only going to get worse – even though employment numbers continue to improve.

Will you be 50 and still paying on your student loans?

Here are more scary statistics. There are 10.6 million people ages 30 to 39 that are still paying on their student loans, 5.7 million ages 40 to 49 and worst of all, 4.6 million people age 50 to 59 that still owe on their student loans.

How do you feel about your student loan debts?

How would you describe how you feel about your student loan debts? Some people say they feel as if they were stuck in a trap with no possibilities of escape. Others say they feel as if they were sinking in quicksand or living under a big, black cloud. Then there are those who were so tired of paying on their student loan debts that they found some wild and crazy ways to quickly repay them.

Canoed across Ontario

One guy will call Stan was so desperate to repay his student loans that he moved to Alaska and took a job as a tour guide. Over the next three years, he took some other odd jobs. For example, he once canoed across Ontario, Canada transporting “voyageurs” (people who lived and dressed as if they were fur traders in the 18th century). Stan eventually decided to go back to school but he was so determined to not take on any new debt that he not only slept in a 1994 Ford Van on the Duke Campus he even cooked his meals in it.

Became a lab rat

Here’s an idea you may not want to emulate. Another recent grad, will call him Robert, volunteered to become a human lab rat by taking part in paid medical studies. In one of the studies, Robert spent two weeks in a room with a bunch of other people. He was given arthritis pills every day and provided urine and blood samples every hour so researchers could learn how effectively the medication was being absorbed into his bloodstream. In another study he received breast cancer medication via injections so that researchers could determine how his heart reacted to it. While the drug companies doing the studies give him insurance to cover any complications caused by the drugs, Robert noted that being a human lab rat was still scary.

Got a “sugar daddy”

If you’re like me you’ve probably never heard of the website SeekingArrangement.com. It’s where young women can find “sugar daddies” or rich, older men willing to pay for their companionship. One young woman’s sugar daddy paid her full tuition of $1500 a month at the California school she attended. Believe it or not this is on the low end compared to what most college women on the site earn. There are 350,000 “sugar babies” on the SeekingArrangement site about 41% of which are college students. According to SeekingArrangement, these young women average $4200 a month – not small change by any stretch of the imagination.

Mystery shopped

Many people have earned extra money to pay off their student loans faster by mystery shopping. Despite what you might think, there really are legitimate mystery shopper jobs. If you sign up with one of the companies that offer these jobs your initial assignments will probably not pay very well – between $6 and $15 per assignment. But if you stick with the program, you’ll eventually get better paying assignments. For example, one mystery shopper was assigned to opening night at a local racetrack. He not only received general admission for two, valet parking and money for a couple of bets but also a buffet dinner and two alcoholic beverages and was paid $60 for his time.

You don’t want to be a lab rat or a sugar baby?

If you’re not interested in finding some crazy way to pay off your student loans there are alternative repayment plans that could help. If you’re typical you’re probably on the 10-Year Standard Repayment Plan. But there are other repayment plans available that would yield lower monthly payments. Pres. Obama recently signed an executive order making more people eligible for the Pay As You Earn repayment program. If you qualify for this program your monthly payments would be capped at 10% of your discretionary income. However, to qualify you would need to show that you had a “partial financial hardship.” If you are unable to do this there are still other repayment options including Income–Based Repayment, Extended Repayment and Graduated Repayment. Each of these programs has different eligibility requirements and includes different types of federal loans. You can learn what these are by clicking here.

To consolidate or not to consolidate?Man having financial problems

If you, like many Americans, have multiple types of federal loans there is yet another option called a Direct Consolidation loan. The benefits of consolidating your loans include the fact that you would have only one payment to make a month and you would have a lower monthly payment because you would have 30 years to repay the loan. Of course, if you were to choose this option you would make many more payments and would end up paying a lot more interest. In addition, you could lose the benefits that came with your original loans such as deferment and those repayment options. Also, not all federal loans are eligible for consolidation. Here are the ones that are:

• Direct Unsubsidized Loans
• Direct Subsidized Loans
• Unsubsidized Federal Stafford Loans
• Subsidized Federal Stafford Loans
• PLUS loans from the Federal Family Education Loan (FFEL) Program
• Direct PLUS Loans
• Supplemental
• Federal Perkins Loans
• Loans for Students (SLS)
• Federal Nursing Loans
• Health Education Assistance Loans
• Some existing consolidation loans

Whatever you do don’t default

The sad fact is that about 15% of people with student loans go into default within the first three years. Whatever you do, don’t let this happen. You are literally in default the day after you miss a payment. However, this won’t be reported to the three credit bureaus until you’ve been in default for 90 days. When this happens your credit score will take a serious hit. Plus, your account could actually be turned over to a debt collector and trust us, you don’t want this to happen. Student loan debt collectors can literally make your life a living hell. They can garnish everything from your tax returns to Social Security payments and from wages to disability checks. If you default on a loan you can also be barred from the military, lose professional licenses and suffer other serious consequences. And if any of your loans do go into default you will be hit with extra fees and interest charges and will end up owing even more.

Send Sen. Tom Harkins a thank you note?

You may not be aware of this but it’s all but impossible to get student loan debts discharged through bankruptcy. If you owe $25,000 on student loans, you owe $25,000 on student loans and there’s not much you can do except repay the money However, Sen. Tom Harkins recently introduced a bill that would allow people who have student loans from private lenders to get them discharged through bankruptcy. This is only a small percentage of those who have student loans – like 10% to 15%. And the bill is unlikely to get passed until after the midterm elections. However, if you have a boatload of private loan debt, there may be help on the way.

Do you qualify for debt consolidation?

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