Student loan mistake

[AEM210]

Hi My daughter graduated college this past May. She went to a state university. We did the parents plus loan and we did the extended repayment plan for 25 years.
Here are the stats
$77,800 loan
299 more payments of $583.03 (25 years)


I get sick just thinking about it. She is our oldest child we're trying to be smarter with the rest...
Do I have any options?

[disneysteve]

Hi My daughter graduated college this past May. She went to a state university. We did the parents plus loan and we did the extended repayment plan for 25 years.
Here are the stats
$77,800 loan
299 more payments of $583.03 (25 years)


I get sick just thinking about it. She is our oldest child we're trying to be smarter with the rest...
Do I have any options?

I'm not sure what you mean when you ask if you have any options. Do you mean for the existing loans or do you mean what to do with the other kids?

Also, who is responsible for these loans? Are you and your spouse paying this bill or are you expecting your daughter to pay them or at least contribute to them?

I have to say I'm surprised to see that much debt from a state school. Did you borrow 100% of the cost?

[AEM210]

I'm not sure what you mean when you ask if you have any options. Do you mean for the existing loans or do you mean what to do with the other kids?

Also, who is responsible for these loans? Are you and your spouse paying this bill or are you expecting your daughter to pay them or at least contribute to them?

I have to say I'm surprised to see that much debt from a state school. Did you borrow 100% of the cost?

yes, we foolishly did borrow almost the entire cost. Tuition/room/ board in Connecticut. My daughter is paying 3 years of the Stafford loans which total 23k and the payment is $268 a month for 10 years
Her loan is separate from our Parent Plus loan. My question was more about the existing loans- but I guess there's probably nothing that can be done about it.

[Weird Tolkienish Figure]

$77,800 loan
299 more payments of $583.03 (25 years)

Ouch

I'm reading that if you consolidate you might be eligible for income contingent repayment, which may lower your payment if your income is too low.

Federal Parent PLUS loans are not eligible for income-based repayment. They are, however, eligible for income-contingent repayment if they are included in a Federal Direct Consolidation Loan and the borrower entered repayment on or after July 1, 2006. This consolidation loan may then qualify for public service loan forgiveness (PSLF).

http://www.fastweb.com/financial-aid/articles/3920-can-parent-plus-loans-get-income-based-repayment-and-loan-forgiveness

http://www.usnews.com/education/best-colleges/paying-for-college/articles/2014/12/08/4-strategies-for-repaying-federal-parent-plus-loans

You have to find one of the calculators online, enter in your income and loan amounts and see if ICR takes some of the bite out of that. Talk to direct loans and see what they say?

Edit: looks like ICR is 20% of your discretionary income. That might be as good as you can do, unfortunately. IBR or PAYE aren't that much better (15% and 10% respectively).

[snafu]

For the younger children...the rule is never, ever borrow more than the salary your chosen profession will pay in the 1st year of employment. Expect to work part time, possibly menial labour to earn at least some of your expenses. Students are dirt poor, squeezing every penny until it squeals. There is no rule that prevents taking a 'gap' year to earn the next year's expenses.

DD1 has spent $ 100,000. on her degree so I hope she's in an important, valued, well paying profession. She may as well treat her debt as a mini mortgage,paying it off as quickly as she can manage. It's her debt that you we generous enough to co sign. Why do you think it's your debt?

[Eagle]

Hi My daughter graduated college this past May. She went to a state university. We did the parents plus loan and we did the extended repayment plan for 25 years.
Here are the stats
$77,800 loan
299 more payments of $583.03 (25 years)


I get sick just thinking about it. She is our oldest child we're trying to be smarter with the rest...
Do I have any options?

Yes, you have the option to pay back the loan and not make the same mistake with the rest of the kiddos. As Weird Tolkienish Figure pointed out you also may be able to work through ICR, IBR, or PAYE...

[Eagle]

yes, we foolishly did borrow almost the entire cost. Tuition/room/ board in Connecticut. My daughter is paying 3 years of the Stafford loans which total 23k and the payment is $268 a month for 10 years
Her loan is separate from our Parent Plus loan. My question was more about the existing loans- but I guess there's probably nothing that can be done about it.

*A few questions for clarification...
Why would you take nearly an 80k loan on your daughter's education? Was the state school in Connecticut where you guys lived? Or do you guys live in another state? Why were these loans not under her name?

*Some suggestions for the younger kids...
First, as far as the other kids go obviously don't take out anymore loans for kids. Have them live at home, go to community college for the basic courses (English, Math, Science, History, etc.) for the first two years, work summers (full-time) and throughout the school year (part-time or full-time), and then transfer to a local 4 year state university to finish their degree.

Second, there's a lot of scholarships out there. Start with this website: www.finaid.org

Third, here's 5 ways to pay for college without taking out loans: www.daveramsey.com/blog/5-ways-to-pay-rachel

Fourth, if the kids want to do something different (private school, living on campus, etc.) they can take on the loans. I agree with Snafu kids should never borrow more than the 1st year's entry level salary for a degree.

Fifth, consider website like www.payscale.com for comparing job profiles to the salaries of people with comparable skills and experience. Help your kids choose a potential degree that suits their interests and allows them to make a living wage.

Sixth, in addition to payscale consider www.glassdoor.com looking up jobs by company and title. 

This will give your kids an idea of the potential income for entry level, mid-career, managerial, and executive positions in your kids field of interest.

[Weird Tolkienish Figure]

Yes, you have the option to pay back the loan and not make the same mistake with the rest of the kiddos. As Weird Tolkienish Figure pointed out you also may be able to work through ICR, IBR, or PAYE...

PP loans are only eligible for ICR, from what I can see, with monthly payments of 20% of discretionary income. So you'd be better off with the Extended Plan unless your discretionary income falls below $2500 or so (20% of $2500 is $500).

If you're expecting such a scenario it's worth looking into. If you're going to retire, your income could drop to below $2500 and it might be worth it. You could end up with a payment of $0 if you have no income. I'm unsure about whether retirement plans and such count, I think that as long as the IRS counts it as income then so does ICR.

Check with a financial advisor on all this, I am in no way an expert.

[AEM210]

You've all really given me a lot of helpful advice. No, her career is not worth 100k a year, not by any stretch (teacher) I think because I didn't dorm at college I wanted her to have the full experience. This was a huge mistake we will just continue paying for (Income is too high to qualify for any of the income based plans)
Thanks! I'll continue to peruse the forums- a lot to learn...