going back to school, loan deferment

formerlyGDaisy09 · January 2015

I've talked about H's education before. He's done several years of work towards a bachelor's degree, at a couple different institutions, but has never finished the degree. To do that he took out tons of student loans. For a while I was pushing him to go back to school because the job market here is tough without an undergraduate degree, and he's now in a place where advancement will be hard without a degree. I've since dropped it, because it was causing a lot of stress, BUT he's decided on his own that it is something he wants to do.

He found a local college that offeres a BS in Buisness that is willing to take a lot of the credits he already has. from what he has sent me so far, it sounds as if his tuition would be about $3500/year, and he would be considered a "full-time student". I do not have details from him yet how many courses/years it would take him to finish. The tuition rate is discounted because H had been enrolled as a student at a community college that closed this fall, they are offering a 30% discount to those students who enroll this academic year (with the discount extended through their graduation as long as they take at least 4 classes a year), so if he waits until fall to enroll it would cost us more like $5000/year

We do not have the money in our budget to pay for this right now. However, if he is a full time student his student loans would be eligible for deferment, which would give us enough space in our budget to pay for tuition and books (currently monthly payments to his loans total about $540). Since I know you all like number details here's a more specific run down of H's loans, numbers are Balance (Interest Rate) Monthly payment, balances are approximate, last time I got the actual balances was september:

Sallie Mae 1: $16,000 (3.75%) $227

Sallie Mae 2: $4,000 (3.75%) $55

Sallie Mae 3: $16,000 (5.25%) $211

Stafford 1: $1,400 (5.8%) $30

Stafford 2: $1,200 (1.35%) $23

My current thought is that we could defer all his loans and pay interest only on the non-stafford loans in order to pay his tuition and buy books. His employer, who he could continue to work for, offers $2000 or $2500 (H isn't sure but he's finding out) in tuition reimbursement every year, so my thought is that as we get reimbursment checks for tuition we would throw them at the Sallie Mae loans (since the stafford ones wouldn't be accruing interest).

Do any of you think I'm missing something? or are there other questions I should be asking?

als1982 · January 2015

Ouch. That's a lot of student loan debt to not have a degree. How many more classes does he need to finish? (In re-reading, I see that you don't have this information.)

Personally, I would rework the budget to pay for this in cash. And if he'll still be holding down the same PT job that he has now, I wouldn't defer either.

Also, have you looked into the parameters for the education benefit offered by his employer? Does it require a minimum grade point average or timeframe that he's required to stay with the company after course completion?

vlagrl29 · January 2015

is it possible to combine some of those loans instead of having so many different ones? I would defer them and pay interest only like you mentioned

simplyelise · January 2015

I'd want to be really sure of what the policies are on the tuition reimbursement. Does he need to maintain a certain GPA or stay at the company for so many years or else have to pay it back?

I think I'd also want to know what's different about this time for him.

Xstatic3333 · January 2015

I agree that first choice would be to cash-flow this, though I know you're saving for a lot right now. If you do the deferment, I would probably kill the little loans first just because I get antsy with loans that small hanging around. I think you'd mentioned previously that your H didn't really like discussing his SL debt. Before moving ahead, I'd make sure he's 100% ok with being open about it now so you can easily stay on the same page. I'd also make sure he's 100% committed to finishing the degree. Finally, I'd want to review the financial literature because, frankly, this seems way too cheap for New England, even for a public school. It does seem like a good opportunity, and I agree it's tough to get a good job around here without a degree or a skilled trade.

ETA: Removing my concern about it seeming too cheap. Did some random googling and did find a couple in your state that sound about right for that price. I'd just make sure to account for annoying random fees and books in your price assessment.

hoffse · January 2015

Yeah I agree it seems awfully cheap. My LLM is like $1300 per credit hour. Granted, it's through a university, but it's a really really cheap university.

Don't you have to be taking like 6 or 8 credits each semester to be full-time and eligible for deferment? I can't remember. I know I'm part-time with 4 credits per semester, 3 semesters per year, and I am not eligible for deferment.

If he's committed to finishing, then I would be inclined to do it. The details just seem a little too good to be true. If they really are that good, then it sounds like a fab opportunity.

vlagrl29 · January 2015

hoffse said:

Yeah I agree it seems awfully cheap. My LLM is like $1300 per credit hour. Granted, it's through a university, but it's a really really cheap university.

Don't you have to be taking like 6 or 8 credits each semester to be full-time and eligible for deferment? I can't remember. I know I'm part-time with 4 credits per semester, 3 semesters per year, and I am not eligible for deferment.

If he's committed to finishing, then I would be inclined to do it. The details just seem a little too good to be true. If they really are that good, then it sounds like a fab opportunity.

woah! that's crazy expensive. the conservatory I went to is around $250 per credit hour. I do think you have to take at least 12 hours to still defer the loan.

ETA - I looked it up and it is now $368 per credit hour, it was $217 per credit when I graduated

formerlyGDaisy09 · January 2015

I need to get more details, all of this is coming to me via a string of e-mails from H, I assume as he is talking to someone in admissions. there really isn't a lot of room in our budget right now to cash-flow tuition, we could pull from our savings. but since H's hours have dropped back at his PT job following the holidays our balance sheet is cutting it pretty close every month as far as what comes in and what goes out, so even dipping into savings makes me a bit nervous. In my mind this doesn't take priority over our current home renovation and TTC goals.

yes, those are lots of Student Loan payments for not having a degree. Unfortunately he needs to make a decision in the next couple weeks if he is going to take advantage of this tuition discount, without the discount it goes from being something we can afford if we get his loans defered (while still paying the interest) to something we need to wait to do until one of us is bringing in more money.

He has taken advantage of his company's tuition reimbursement in the past, we didn't have any problems with it then, and it didn't have any caviats for staying at the company, but he's in management now, I should make sure that isn't different.

I think what I need to find out is:

1. how many credits he needs to graduate

2. if in fact he would be taking enough courses to get loans defered

3. more detailed terms of tuition reimbursement

hoffse · January 2015

vlagrl29 said:

hoffse said:

Yeah I agree it seems awfully cheap. My LLM is like $1300 per credit hour. Granted, it's through a university, but it's a really really cheap university.

Don't you have to be taking like 6 or 8 credits each semester to be full-time and eligible for deferment? I can't remember. I know I'm part-time with 4 credits per semester, 3 semesters per year, and I am not eligible for deferment.

If he's committed to finishing, then I would be inclined to do it. The details just seem a little too good to be true. If they really are that good, then it sounds like a fab opportunity.

woah! that's crazy expensive. the conservatory I went to is around $250 per credit hour. I do think you have to take at least 12 hours to still defer the loan.

ETA - I looked it up and it is now $368 per credit hour, it was $217 per credit when I graduated

Ha my undergrad and law school was like 2-3x that.

vlagrl29 · January 2015

hoffse said:

vlagrl29 said:

hoffse said:

Yeah I agree it seems awfully cheap. My LLM is like $1300 per credit hour. Granted, it's through a university, but it's a really really cheap university.

Don't you have to be taking like 6 or 8 credits each semester to be full-time and eligible for deferment? I can't remember. I know I'm part-time with 4 credits per semester, 3 semesters per year, and I am not eligible for deferment.

If he's committed to finishing, then I would be inclined to do it. The details just seem a little too good to be true. If they really are that good, then it sounds like a fab opportunity.

woah! that's crazy expensive. the conservatory I went to is around $250 per credit hour. I do think you have to take at least 12 hours to still defer the loan.

ETA - I looked it up and it is now $368 per credit hour, it was $217 per credit when I graduated

Ha my undergrad and law school was like 2-3x that.

I'm sure - I would have had a heart attack and my school loan would be even more than planned. But you guys make more than us musicians in theory so it's all relative right?

formerlyGDaisy09 · January 2015

So we've got some answers:

Loan companies go off of how the institution qualifies you, so this program, that is geared towards working people, qualifies students as full-time if they are taking at least 4 classes a year, H would have to take at least that many to keep the 30% discount on tuition they are offering (which is HUGE). Since the institution would consider him full-time, the loan companies have to.

he is qualified for up to $2500 in tuition reimbursement each calendar year, he has to pass the class to get reimbursed for it, but he has no obligation to stay with the company after finishing the degree.

So it looks to me like we're planning to do this, it will delay our debt pay-off, but it will not put us in any more debt. Like @als1982 said, he's got a lot of debt for not having a degree, at least this would get him the degree. We do plan to take each reimbursement check and apply it towards the remaining balance on those loans that will be in deferment (still deciding if we should get rid of the little ones first or just throw everything at the big ones). the smaller loans are stafford loans so there is no interest while they are defered, we'll be paying interest only on the big ones each month so that we don't end-up paying interest on interest.

H seems really excited about this, which has not been true in the past. and it sounds like he has found an institution that is going to take most of the credits he's earned in the past.

formerlyGDaisy09 · January 2015

AprilH81 said:

I would throw the reimbursement at the loans that are accruing interest, at least that way the principal is decreasing which will mean less total interest in the long run.

Good luck to your husband!

Thanks! Yea, that Sallie Mae #3 with the higher interest and ~$16K balance I think is a good target. the little ones are so tempting just because we've gotten them down so far, they'd be low-hanging fruit to pay off.

I think our minds set is that just because the loans are in deferment doesn't mean we can't still pay them off, but it does give us about $500/month of wiggle room each month if we're going to be paying tuition in cash, buying books, and H's schedule won't be as open to picking-up extra hours. It means that he can go back to school and other life goals like starting a family, saving for vacations, and all those other things don't have to stop. I feel pretty good that he can do this without us having to take out more loans.

formerlyGDaisy09 · January 2015

I just wanted to circle back to this, you'll all be proud

We figured out how to do this without pushing DH's loans into deferment *YAY*

We have to pull some money out of savings to pay for the first two terms (Max $1500, but we may be able to cash flow some of it) but after that we should be able to roll reimbursements from H's job to pay for the rest of the terms. We're still waiting for one of his transcripts to arrive to know exactly how many credits he needs to finish, but I would guess that it may take him about 3 years as a part time student to finish.

They also will give up to 12 credits for Life Experience, which would involve H studying and taking a test in courses where he has sufficient work experience, they think there are several of these he would be eligible to take.

Now, if only the contractor for our basement didn't bail on us I'd be feeling like we were in a really amazing place right now!

going back to school, loan deferment

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