Student Loans and OCS...

[SticknRudder]

Looks like it is time to start bringing together the loose ends in my civilian life...

Haven't a clue where I heard it, but I was pretty sure that while at Basic/OCS, your student loans can be deferred...speaking with my loan servicer, they said that Key Bank (these are private, not federal loans) is one of those few that will not defer for military training. This is pretty serious, as pay in OCS doesn't come remotely close to covering all my bills with the $1450/mo student loan payment (and I still have the cellphone under contract, a car payment, insurance, etc...).

Don't know how to get around this, because as it stands now, leaving my current gig for OCS is literally going to bankrupt me and destroy my credit, and I can't speak with my OSO until they're back from leave in a week or so.

Any ideas?

Thanks!

SnR

 

[red_ryder]

How did your student loan payment get to be more than most people's mortgages?

 

[navy09]

Join the Marines, they'll pay them off.

Seriously, that's a crazy payment. How much did you borrow and at what rate?

 

[beaverslayer]

Do a search, and you can find some threads about pre-commissioning loans on here. Take out one of those (at 2-5% APR), pay off your current loans, then start making the much smaller payments on the new loan.

 

[Spekkio]

That bank is being retarded.

Firstly, check out the Servicemember's Civil Relief Act (SCRA). You can knock the interest on your student loans down to 6%. That might help with the monthly paymets.

Additionally, you can look into USAA's career starter loan. They have a $20,000 loan available at 4.99%. If that will pay off your loans, you might want to consolodate by taking a loan out with USAA. Something tells me that a loan resulting in a $1400+/mo payment can't be covered with $20k.

It bewilders me why A) your loan amount is so much and B) your bank refuses to defer.

 

[visual_scan]

you certainly must have some flight fees making up your loan balance, which I do as well. My APR's are in the 3-4% range, 85K. My monthly payment is ~$500. Is key Bank your sole loan servicer? Fixed or variable?

 

[m26]

(and I still have the cellphone under contract, a car payment, insurance, etc...)

Well, I wouldn't give up on getting the loan deferred... talking to the right people in the right way could make it happen, although with that kind of loan I definitely wouldn't recommend deferring, as the loan obligation will only get worse.

BUT, depending on whether you have family obligations and what companies you work with, you could get out of the above.

CELLPHONE: Sprint charges $15/m to suspend service, and with AT&T you can suspend service and payment for military obligations. Also with AT&T you can reduce your plan at any time, which could lower your payments. I've never looked into other companies, but I'd bet other carriers have similar programs.

CAR PAYMENT: Having talked this over casually with Nissan, they said that Nissan finance can suspend payments under certain circumstances such as this one. If you ask around with your lender, it may be possible to stop payments during OCS (although interest would probably capitalize).

INSURANCE: Probably falls under the beg for relief category, but it's conceivable that you could talk the insurance company into reducing your payments while at OCS. For example, you could switch to bare bones coverage, since you won't be driving much at OCS.

 

[SticknRudder]

Well, I went to one of those ::fancy:: flight schools to the tune of nearly 100K in my name (not counting what my parents took on). I also was completely unprepared for the financial burden; I got an AFROTC scholarship to the tune of nearly 70K...then they found out I was looking at the Navy BDCP at about the same time, and quickly yanked the scholarship in retribution...so now I'm halfway through college with no way to pay for it, and Sallie Mae calls generously offering a loan with 15% interest (yes, you read that right...and I was too dumb at 19 to know better). I've since consolidated with Key Bank at about 6% (variable, off LIBOR). Anyhow, that's my story -- my life is a world of suck for the next 9 years (10 yr term).

It really blows my mind that the bank won't budge...?

 

[SticknRudder]

m26, good info -- I'll look into those options! Those payments, of course, wouldn't be an issue if I could defer my student loans for just those three months...

 

[ryan1234]

Are you going to Riddle?

 

[...aywkubttod]

To echo what m26 said earlier, it's all about who you're dealing with. Most non-management bank employees either don't have the power to extend additional help or don't care enough to make the effort (or both). Banks are willing to work with people 99% of the time when you're confronting them before you're in dire straits, which is exactly what you're doing now. They clearly don't care that this is because you're joining the military, so you need to try a different approach.

To them, this is all about whether or not they're ever going to get their money back. To you, it's clearly just a matter of "when," not "if." Tell your loan rep that if he can't help you, you're going to need to talk to somebody who is able to work out a temporary payment plan for your severely reduced income; you'll be put in touch with somebody more experienced and/or higher on the food chain. Every bank has these people and it's their job to make sure they get something. There?s nothing to worry about because you know this is temporary, and they can't harass, threaten, or coerce you into making any decisions. Before they can ask you how much you're able to pay, offer it up: "I cannot make my full payment for three months, but would like to pay $X/mo during that time as a sign of goodwill until my income normalizes". Give them exact numbers (not ranges, or they'll think you're full of shit) and dates. You have the upper hand, but they think they won because it counts as a save, and it usually doesn't get reported as a delinquent account.

In your situation, there's absolutely nothing wrong with going over somebody's head to get results... the worst they can do is say 'no,' and flag you as a pain in the ass in their system. If person #2 can't help you, ask for their boss. Somebody along the line is going to make a decision before it reaches the executive level; by that time, you have 5-6 names and extensions, and a well-written letter to somebody at the top can shake up an entire department (believe me, I've seen this happen). When the alternative is having to fight you for the full loan balance with their very expensive legal department, three months of reduced or deferred payments looks like roses.

If worse comes to worst, you send them a reduced payment for three months after they refused to defer your loan. Big deal. You still paid, just not as much as they expected, and they may not even report anything to the credit bureaus. Payment history is important, but other factors make up the remaining 2/3 of your score. And hell, at this point in your life, just about everything is going against your score (young, large amount owed, short loan tenure), so keep plugging away until you get them to compromise.

I worked collections for Wells Fargo in college (call centers = hell) and currently work for another large financial services company.

 

[SticknRudder]

Fantastic...I'll get on the horn then...Thank you!

 

[lilsnoboardr22]

look into talking to your loan person. i also have a key bank loan and am pretty sure you can pay interest only. They will work with you. They are not going to bankrupt you because you have a student loan. Most loan companies want to help students out. Do your research im sure you will find a solution so you can go to OCS

 

[Tc85roadracer]

I feel you guys, 70K in flight / school / other loans. Most of mine are through Sallie Mae. I just applied for interest only for a year. Hopefully it will give me some time to figure out this military flying stuff. Until then, maybe I will get lucky with the lotto!

 

[Alecta]

I'll add some info in. Sallie Mae will only lower monthly payments and not defer them. They will only defer for service members who are deployed.

Wracking up huge amounts in student loans is easy. I've got about $170,000 in student loans (undergrad + Masters / half federal half not). My Dad makes huge money and decided he didn't want to help pay for college after he filled out his portion of the FAFSA saying he would contribute (parents are divorced). So I did what countless others have done; worked my ass off, won some pretty good scholarships, and had to take out loans to cover the rest. C'est la vie. I'm gonna try like Hell to pay them off in 10 years.