Student Load Negotiations
 

Has anyone had any success negotiating with a student loan provider for a lump sum payment? My brother recently passed away and I'm the sole heir. No sympathies please as we weren't all that close. Anyway, there's plenty of money in the estate to take care of my wife's student loans but thought I would try to negotiate with the lender to see if we can get the payoff down a bit.

There are two lenders and the total is around $90K (it makes me sick to my stomach that it's that much). Interest rates are around 6.5%.

TIA

Tried it.

Doesn't usually yield much success.

I don't know about student loans, but it sounds like you've got some good leverage to negotiate some things with your wife.

Student loans, unlike most other types of debt, are not subject to discharge in bankruptcy. Meaning that lenders have very little reason to agree to take less.

Good luck, but don't hold your breath.

Student Load? I thought this thread was going to be something different...

If you are current on payments and have no delinquency history, I don't think it's all that likely. Through some stupid decisions and a shoulder surgery, I fell behind on some of my loans years ago. I was able to negotiate away interest and collection penalties and pay only principal remaining with a big lump payment, but they weren't writing off any of the actual $$ that was lent. Good luck!

obama phone

I would hit up the bars around college campuses.

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You'd probably have better luck negotiating for a cheaper wife.

That could be true, 90k could buy a nice wife I bet

If they're over 18 go for it, especially if your wife is on board.

They'd both luv him long time.

usually to get a lump sum settlement granted you need to default on the loan for a few months so that the lender becomes desperate to recover any of the money.

Once you miss a few months if they are anything like credit card companies they will settle for less than what is owed

I have a suggestion - vote for Bernie in the next election!

pay your debt you ****in heathen

I hope she got a worthwhile degree and job from that.

Eh, that's way too simplified. They're going to have a team looking over her financials and assets if they feel they can just garnish and seize to recover the difference, they will and not shit you can do about it.

If your wife has no assets or money, ya they could be much more motivated. On the flipside, if there's a co-signer (likely) well uh that could get super ugly.

Before paying that I would consider if you have worse debt. At least the interest on that student debt is tax deductible. Are your cars debts paid off?

That interest rate isn't very good for student loans, so maybe paying it off is better long term to free up that monthly money. I doubt you'll get much done on a discount.

Sounds like your wife should let you give out a few student loads if you're repaying $90K of her debt.

It's deductible up to a certain point. I think IIRC, the max is 10k per year.

She definitely should be taking some

Preferably to current, nubile coeds.

I'm by no means an expert (welcome to ChiefsPlanet), but from what I understand, doing this will do a lot of damage to her credit score. It's supposedly easier to do with private loans than a federal loan, so it may depend on who you're working with.

It's also my understanding that if any of your debt is actually forgiven, it becomes taxable income that will ding you next year on your return. But I'd be happy for someone with more tax knowledge than me to correct me on that. Either way I'd make sure to ask someone the tax implications if you actually pulled it off.

You're right on the whole. But not all student loan interest is deductible. There is a cap and phaseouts in there, and I'd have to look them up.

The theory is sound though, if you have any debt that is at a higher interest rate, pay that off first. Or if you can achieve a higher return in some other financial instrument - 401K or whatever, it would be better to just keep paying and funnel the money into an instrument.

Tax sheltered instruments will have yearly caps, so you'll have to hang onto some of that money or do some monkeying around. Your 401K will have the highest cap so if you and the wife go max out the 401K and use the money to live on, that would be better from a net value perspective. If you inherited an actual retirment fund as the beneficiary, that's even better. Just roll that shit into what you've got or a ROTH if you think you can beat it and forget about it.

That's before factoring in the threshold to where going itemized would be better than standard is much higher now.

Instead of taking awful CP advice or blindly pissing nearly 100k, I'd talk with an advisor.

That didn't sound right, so I looked it up. Its $2500 per return. Phaseouts for MFJ start at 135,000.

So if he's got 90,000 @ 6.5%, that would be in the ballpark of $5,850 yearly, so he'd be limited out.

I have no idea what his effective tax rate is, but if it is 20%, he'd be saving $500 on the student loan interest deduction, so it sure is nice, but it isn't a giant deal one way or the other.

That's a little bit down in the weeds. If you have any questions, shoot. The big deal is that if it is in a retirement fund already, don't distribute it until you know what you're doing.

For rizzle, yo.

But student loan interest isn't an itemized deduction like Home Mortgage interest is. It is a 1040 adjustment on the (used to be) front page, so it will reduce AGI before the standard deduction is applied.

Whatever you do don’t pay for her boob job.

Student Load negotiations: Do you want it in the face or on the tits?

I was saying Student loan interest. Not sure if I was clear on that. I thought mine was only deductible up to 10k per year on the interest, which when i'm paying what i'm paying that happens quickly.

Yeah, the link is about the student loan interest deduction.

I think in prior years you could roll some student loan interest into the American opportunity credit. It’s gone now and I don’t know all the specific iterations.

I think the cap on eligible student expenses is 10. Not sure though.

Yep, I got a whopping $2 tax credit for my student loan debt this year.

The simple solution would be to call them and find out. They will probably tell you they'd rather squeeze your nuts than to give up that 6.25% over the next X many years, but it never hurts to ask. I paid for all 3 of my kids to go to college, partially with college loans and it was a race to see if I could pay them off or die first.

Fair enough. I never took out student loans so had no idea.

Just more proof to talk with an advisor than some idiot named after a weather guy.

Student loans aren't even dissolvable in bankruptcy. Good luck trying to get them to give up some of their pound of flesh.

Fastest draw in the west. :)

They are not like credit card companies. As someone else noted, they have a debt obligation that is not dischargeable in bankruptcy, so they have almost no incentive to write off any portion of the loan.

Try if you like, but you're probably going to be arguing with a brick wall.

Thanks for the info. I have no illusions of them backing off the principal but thought they may forgive a bit of the interest built over the years. I did talk with my financial advisor and he did suggest paying this off instead of making the lump sum payment on my house note as the interest rate on the house is below the interest rate on the student LOANS. Once we get these paid off, we'll just roll what we were paying on the loans towards our house payment.

No auto loans for us. Been without a car loan for three years and hope to never have another one.

I think we'll just call the banks and see what they have to say. It couldn't hurt.

Seriously, I get on here daily for the past 18 years and have posted a total of 61 times. I think this is the first thread I ever started and I f*** up the title thread....:rolleyes:

n00bs :shake:

Sounds like a good plan to me. The other thing you might consider is sticking some in a ROTH or something. I think there is a fair chance an investment can yield higher than the 6.5%.

Yeah. Whatever. Hyman Roth called me small potatoes.

One of these presidential guys ever campaign on dissolving student loan depth will get my vote so hard.

Sounds like a good plan, except, possibly, for paying down the home mortgage faster. Depending on the rate, that may not be a terribly exciting thing to do. Once you factor in the tax deduction (assuming you're not capped by SALT), the effective cost of a home mortgage at prevailing rates is very low.

I'd be maxing out 401(k) deductions, IRA deductions, etc., before I'd be worrying about paying down the mortgage faster.

Hopefully you are a hot female teacher. If not chiefsplanet will not forgive the student load.

I know, with credit cards, you want to maintain some percentage of debt being used as long as it stays under 30% of your total available credit. However, federal student loans are a whole other ball of wax. As someone else stated, they are not subject to discharge under bankruptcy, so there's probably little reason for them to want to lessen the amount you owe them significantly, because they'll lose all of the collectible interest. For this reason, defaulting on these loans is not worth it because it will do nothing but damage your credit rating.

If you settle for less than you owe, you will receive a 1099 for the amount that was forgiven that you must claim as income. I'm not a tax expert, but I know this from past experience.

The Standard Deduction is now 24,000 for MFJ. It’s unlikely, not impossible though, that mortgage interest will make a material impact on his tax liability.

It depends on how they structure it. Renegotiation does not necessarily equate to debt forgiveness.

What kind of education does a gal get when she spends $100K?


Just a little food for thought...


How does her student loan fare in a divorce in your state??

Were you married/ living with her when she borrowed the $$$$?

Did she borrow more than the cost of the education? Did she borrow money to pay her rent, car, living expenses? Did you live with her, benifit in anyway from the money she borrowed?

Does your wife hold a professional or non professional degree. Will she be making money because she has $100K education or is she an expert in socialist policies, fine arts, or communication technologies?

Depending on how you answer these questions could come to the rational that her student load debt is actually 1/2 yours or possibly none of it. You may actually be able claim her professional degree as a marital asset.

I remember blowing a few students loads in my dorm room!!!!!!!!!!!!!!!

Go on

Didn't matter in my divorce. All the loans were before we got married and I got stuck with half.

What state, I looked into OK law