April 2, 2008 • June Walbert
Q: My
wife has $100k in student loans, which was a huge surprise to me! The current payment
on this is $1000 a month, which we cannot afford. It has been in deferment for seven
years (principal doubled). What options do we have if we cannot place in
deferment? We are paying $125 per month. Will this affect her credit? I have
heard horror stories about individuals defaulting on student loans and this is
not our intention. We both have Master's degrees and are researching a home
business. Do you have any thoughts or ideas?
-Eduardo,
San Antonio, TX
A: It sounds
like it’s a great time for you and your wife to put your education to
work! You should explore the home
business opportunity while you are both “bringing home the bacon”
through full-time employment! Increasing
your income will certainly help your overall financial situation!
The type of
student loans (federal or private) that your wife has will influence your
options, but you should look into consolidating the loans. By doing this, you may be able to extend the
repayment time line and also reduce the payment. You may even have the option of paying only
interest for a few years. Obviously,
these strategies will cause you to pay more, but they can reduce the immediate
stress on your financial situation. Visit the Sallie Mae website to learn more (www.salliemae.com) about your options.
You need to
contact your lender and look hard at consolidation. And through a combination of hard work (jobs
and home business) increase your income while reducing your expenses to fulfill
your obligation!
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June Walbert is a CERTIFIED FINANCIAL PLANNER TM practitioner with USAA Financial Planning Services, one of the USAA family of companies.
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