What can I do if I have $195,000 in student loans and see no way to ever pay them off?
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What can I do if I have $195,000 in student loans and see no way to ever pay them off?
I currently have about $195,000 in student loans, a $130,000 of which are in private loans. I started college 9 years ago and and graduated with a BA in graphic design this year, so some of these loans have been accruing interest for 7 years at high interest rates. My 40 hour entry level graphic job pays me $1100 a month and Sallie Mae has set my loan payment at $1400 a month. I have no other debt and no car payments. I see no way I will ever earn enough to be able to pay these loans and maintain a minimum standard of living for myself, let alone ever having a family. What can I do to get help?
Asked on December 28, 2011 under Bankruptcy Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Try filing for bankruptcy:
1) Fully private loans--and by fully private, I mean not in any way guaranteed, backed, etc. by government--should be dischargeable in bankruptcy.
2) Government-backed, etc. student loans are normally not discharageable; however it is possible--though very rare--to discharge them if you can show "undue hardship." That is essentially that you can barely afford just to live, even at or just above the poverty level, and have no reasonable chance of that improving--especially if you can't eliminate the loans. Less than 1% of people who claim undue hardship will be granted the discharge, but from what you write, it is at a least worthwhile for you to try.
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