I read your student loan article in the Daily News and am very grateful for the information you provided. I have recently graduated with my doctorate in clinical psychology. In addition I have earned over $150,000 in loans. I don’t know where to begin. I believe I have private and federal loans but I’m not even sure to be honest with you. Is there anywhere I can get assistance with this? I seem to get bounced back and forth between the National Student Loan Data System and my school. The income based repayment plan sounds like a good option for me but I’m wondering if I should consolidate my loans first?
-Marissa, San Francisco, CA
You’re not alone. With everything that a goes along with college–the classes, the exams, the post-college job hunt–many students fail to pay attention to their loans until their caps have been thrown and the diploma is in their hands.
To get a handle on how much you borrowed and from where you borrowed, you’ll want to visit the National Student Loan Data System, which you mentioned in your question. NSLDS is the definitive resource for finding out about your federal loans. “The only caveat is if the school is a Direct Loan school they might not have finished reconciling their records with NSLDS,” warns FindAid.org’s Mark Kantrowitz. This could be the explanation for the complications you’re experiencing now. Private loans are another matter. You’ll need to get a list of the private lenders you borrowed from and call each to determine the loan amounts.
Once you’ve determined what portion of your loans are private and which are federal, it’s time to start looking at your options for repayment. If you’re doing any postdoctoral internships or residencies, income-based repayment may not More…
I’m sure you’ve read this news. Over the past weekend it was everywhere including in the Style section of the New York Times. Annie Leibovitz, photographer extraordinaire, she of the naked John and Yoko shot, of the pregnant Demi Moore shot, is in rough financial waters.
Why does this interest me? So many celebs of late have hit the financial skids — Lindsay Lohan, Lenny Dykstra, Stephen Baldwin — it reminds me of a finding in The Difference. When I looked at factors that held people back from financial success stubbornness was one. That is not difficult to understand. If stubbornness defines you, then you’re not likely to conform to whatever task the man (or woman…or corporation) asks you to take on.
The other, however, was more surprising, and it seems to apply in this case: Creativity. People who defined themselves as completely creative — not just very creative, or somewhat creative — but completely creative, were not likely to attain great wealth. Why is that?
David T. Robinson, finance scholar at Duke University and I mulled the research. And here’s where we came out. Sometimes very creative people More…
I have about $45,000 in credit card debt, should I payoff all my credit cards and cancel them at the same time? I’ve heard if you cancel the cards after paying them off it hurts your score.
-Nancy, Texas
Once you’re out of the red and have all your cards paid off, closing the accounts isn’t the best route to take.
If you close the accounts, there are a number of things that could potentially happen make for less than perfect financial circumstances. For one, you’ll be forced to use cash, checks or debit for all of your purchases. “They’ll lose access to the capital, have to live a cash or debit lifestyle, which is not as good as people make it out to be,” says Credit.com’s John Ulzheimer. Also, depending on how you cancel your cards, your credit score may take a hit, which will make it harder to obtain credit in the future for loans or other high ticket items.
If you have the ability to pay off the $45,000 in debt that you owe, my guess is that More…
To SheSelz…who wrote:
I also am a customer of Chase. I have never paid late in 30yr. They have just raised my monthly minimum payment from 2% per month to 5% per month, an increase of 250%. My interest rate is fixed at 3.9%. After reading the previous blogs, I’m not sure if I should call them or not! Does anyone else have other reports on how they have been treated on this type of problem? Is this problem only been occurring with Chase or other banks as well. Obviously they found the loophole that I missed in all the fine print!
Before you resort to calling — and we’ll talk about that in a moment — I want you to try to think of this as a gift rather than a punishment (and I know it feels like a punishment, with a credit card this cheap, the temptation is to use it for all expenses you have to carry.) But let’s say you have $10,000 in debt on that card. If you pay it off at 2 percent a month — at the 3.9% interest rate without charging anything else — it’ll take you 55 months. BUT if you can come up with the $500 it takes to pay the 5 percent a month, you’ll get out in 21 months. And save a boatload of interest in the process.
What if you can’t? What if it’s impossible to come up with that $500 a month? You simply don’t have the cash and you don’t have a way to get it? Then you call and you tell them that and try to negotiate something in between. Understand, they may cancel your card as a result (that’s their prerogative) or only be willing to cut the minimum so far or say no. But it’s better for your long term financial health if you can rob from the various Peters in your life to pay this particular Paul.
Okay, so you don’t usually get a headline like that on a financial story unless it’s an out and out scam. Today is different. Two things I want to tell you about may actually help you get through this month (and those following) feeling less squeezed than in the months before.
1. 125% Loan To Value
One of the big frustrations I’ve heard about — from some of you indeed — in the attempt to refi a mortgage because you’re feeling squeezed by the payments is the inability to qualify for the Making Home Affordable plan. As originally drafted, it was tough. Your loan not only had to be underwritten by Fannie or Freddie but you could owe no more than 105% of the appraised value of the home. Due to the fact that people overborrowed to such a great extent and home appraisal values had fallen similarly, that was a high bar to scale. Well, it’s been revised. Now you can owe up to 125% of the appraised value. CNBC covered the story pretty comprehensively here. The bottom line: If you’ve tried and failed, try again.
And note: Mortgage rates fell again this week. The 20-year-fixed rate loan is back at about 5.3%. More…
