Banking, Loan, Financial, Negotiator Gurus...Help Me out

[KevDen2005]

Long story short my wife has large amounts of student loans. The majority of those loans are private from Wells Fargo. The rest are federal. We still owe around $85,000 on these loans, total. That is after over two years of on time and additional payments (I realize that this isn't a long time). Oh and believe it or not my wife got $50,000 in grant money, so hey, at least that is a little savings.

Now, I know that sometimes banks or credit card companies will make deals for the pay off amount, especially if the credit card is from someone who passed away so the bank will still get some kind of payment.

My wife's grandparents want to give us (not exactly but it's a long story) a significant amount of cash to help pay this off, however it would not be the full amount of what is owed.

I want to know if there is a way that that I can offer the bank or federal student loan less but will send them a check for the entire amount that we agree on? Does this make sense? I am typing this quickly as I am on the phone with the bank trying to get current exact payoff amounts.

[Fentonite]

I'm not sure, but I think they will not settle for less than they are owed unless the loan has gone into default. I have a buddy who paid less than originally agreed, but only after he defaulted and ruined his credit. Then the loan was sold to a collections company, and they are the ones who agreed to accept less. The collections companies buy bad loans for pennies on the dollar, so they are able to negotiate to accept less than you originally borrowed and promised to repay, but your credit is already trashed. In addition to damaging her credit, if your wife doesn't repay the money she borrowed (like my buddy), the expense gets passed to the rest of us in some fashion.

[hunterhawk]

I don't think so but that's still awesome! At least put a good lump sum down and possibly get lower payments! I'm paying $640 something a month! GRRR so help a brother out! :-) you know if they offer you more money

[Mtn.man]

School loans are treated differently, they can and will come after you forever.
Most won't take a lesser amount even if in default.

Got family back east that thought otherwise till they started garnishment.

[Cylinder Head]

Lenders actually HATE it when you pay early because you're "screwing" them out of interest payments. They will not give you a deal.

[newracer]

They will not consider less until the loans are defaulted on and as Mtn.man said the federal ones will never go away or accept less. Take the extra cash and put it towards the principal on the ones with the highest interest, likely the Wells Fargo loans.

Also be careful how the paperwork is handled with the cash gift (not exactly but it's a long story) or you might have to pay a whole bunch of taxes on it.

[Great-Kazoo]

School loans are treated differently, they can and will come after you forever.
Most won't take a lesser amount even if in default.

Got family back east that thought otherwise till they started garnishment.

it is also considered income and outside defaulting on the loan, you now are being taxed on it. We knew a professional student who blatantly blew off his student loan. He thought is was funny how they sent him notices and ignored them. TILL the IRS hit got him.

[Sawin]

If it were me and I didn't have time to look up the tax implications, I'd use 85-90% of the sum that her grandparents give you to pay down whichever loan you have with the highest interest rate. If they are only giving it to you to pay down the student loan, then so be it. That's awesome. However, I'd keep a 10-15% portion available in savings in case tax time comes around and they want their cut. Just a thought, without any more insight into the loans and gifting laws.

[Irving]

Why can't the grandparents just make a direct payment to the loan and avoid the tax issue altogether?

[ChunkyMonkey]

Long story short my wife has large amounts of student loans. The majority of those loans are private from Wells Fargo. The rest are federal. We still owe around $85,000 on these loans, total. That is after over two years of on time and additional payments (I realize that this isn't a long time). Oh and believe it or not my wife got $50,000 in grant money, so hey, at least that is a little savings.

Now, I know that sometimes banks or credit card companies will make deals for the pay off amount, especially if the credit card is from someone who passed away so the bank will still get some kind of payment.

My wife's grandparents want to give us (not exactly but it's a long story) a significant amount of cash to help pay this off, however it would not be the full amount of what is owed.

I want to know if there is a way that that I can offer the bank or federal student loan less but will send them a check for the entire amount that we agree on? Does this make sense? I am typing this quickly as I am on the phone with the bank trying to get current exact payoff amounts.

Yes you can, but it will show as settled account and you will get 1099 for the write off. It's negative in your credit. You may end up paying more tax.

It also takes long to negotiate. You must show hardship with your DTI etc.

I don't recommend it. Pay your obligation, you'll save in the long term in interest and terms on other loans by keeping your credit perfect.

[RCCrawler]

And this is why our country is headed into the shitter. Spend, spend, spend, and then as soon as it's time to pay it back try to find every way possible out of it.[Bang]

[KevDen2005]

And this is why our country is headed into the shitter. Spend, spend, spend, and then as soon as it's time to pay it back try to find every way possible out of it.[Bang]

Thanks for the positive advice. I am certainly not the reason why our country is in the shitter. This is an educational loan and we pay plenty into this economy and we have never defaulted on anything. We did not qualify for any type of job that pays off loans and due to the overpopulation of registered nurses that have a BSN in this state we are forced to have my wife work for a lot less than many other nurses do. Nevertheless, why shouldn't I try to advance myself as much as possible?

[Dave]

If you are running multiple loan payments even after doing a consolidation find your balances for all of them and pay off the smallest ones. Getting less loans to pay off means less payments per month. Even if they are not the highest interest loans it is better to pay them off and pay down some principle on the bigger ones. This way you can take part of the money saved on having less loans to pay on to pay down and eventually pay off the bigger ones while putting some cash back into your pocket. If you haven't done a consolidation you might want to see what ones you have that qualify for one and then pay off the ones that do not. My rate on my consolidation is 6.8%, even though my first year's loans were originally 10%, and my last year's loans were 4%ish. Even after doing a weighted average of my interest rates the consolidation was the better deal for me.

[MrPrena]

I, myself was curious that WFC (or any bank issued) student loans are not backed by sallie mae or not.
I checked it out on WFC website on under and grad.
https://www.wellsfargo.com/jump/EFS/studentloans

My advice might be different than others.
IF WFC loans are not backed by sallie, I would pay majority of federal loans which backed by sallie first. Those will never go away.

[kidicarus13]

You are asking advice about the possibility of paying an amount less than what you owe a bank and then you state...



* This is an educational loan (IT'S NOT LIKE I BOUGHT A NEW TRUCK THAT I AM STILL DRIVING AND STOPPED PAYING ON THE LOAN)
* We pay plenty into this economy (WE PAY WHAT I FEEL IS OUR FAIR SHARE INTO THIS ECONOMY)
* We did not qualify for any type of job that pays off loans (WHEN WAS THAT EVER A GUARENTEE?)
* Due to the overpopulation of registered nurses that have a BSN in this state we are forced to have my wife work for a lot less than many other nurses do (MY WIFE DOESN'T MAKE AS MUCH AS WE EXPECTED SHE WOULD WHEN WE THOUGHT IT WAS A GOOD DECISION TO TAKE OUT THE LOAN)
* Why shouldn't I try to advance myself as much as possible? (FARK IT, I'M GOING TO TRY TO BETTER OUR FINANACIAL SITUATION LIKE EVERYONE ELSE IN AMERICA EVEN IF IT MEANS NOT PAYING WHAT WE OWE)


To top it off, you're getting a signifigant amount of money from an outside source. Obviously the CAPS are how I read it but my interpretation could be wrong. Can you at least see how this may rub some people the wrong way?

[Batteriesnare]

Sounds like you and I had a similar situation as far as owing different lenders for my student loans after WF sold most of them off to the .gov. I'd say take the sum and pay off the smallest balances, and put what ever is left towards the next smallest one. Then take the minimums (or whatever you were putting each month towards the now paid off loans) and put that toward the the next smallest loan balance, and so on until their paid off. That's what I did and am down to just one loan with just under 10k on it, having graduated less than four years ago with $45k owed.

My wife and I also received a gift from from her grandparents and narrowly missed having to pay taxes on it. If at all possible, set the gifters up in your account and have them make a direct payment instead of having it sent to you then the lenders.

[newracer]

I, myself was curious that WFC (or any bank issued) student loans are not backed by sallie mae or not.
I checked it out on WFC website on under and grad.
https://www.wellsfargo.com/jump/EFS/studentloans

My advice might be different than others.
IF WFC loans are not backed by sallie, I would pay majority of federal loans which backed by sallie first. Those will never go away.

I understand you logic but the WFC loans are likely higher interest rates.

[MrPrena]

Sounds like you and I had a similar situation as far as owing different lenders for my student loans after WF sold most of them off to the .gov. I'd say take the sum and pay off the smallest balances, and put what ever is left towards the next smallest one. Then take the minimums (or whatever you were putting each month towards the now paid off loans) and put that toward the the next smallest loan balance, and so on until their paid off. That's what I did and am down to just one loan with just under 10k on it, having graduated less than four years ago with $45k owed.

My wife and I also received a gift from from her grandparents and narrowly missed having to pay taxes on it. If at all possible, set the gifters up in your account and have them make a direct payment instead of having it sent to you then the lenders.


I understand you logic but the WFC loans are likely higher interest rates.

As Batteriesnare said, I am fairly sure WFC sold their loan to SLM to be securitized (SLAB-Sallie Mae’s student loan asset-backed securities).
Then, I would agree that highest interest student should be paid first.

[skullybones]

How did her loans come out so high? Was she paying out of state tuition?

[jerrymrc]

I feel for some of my RN's. Now that said I know many RN's and even LPN's that have branched out and make good $$$. Specialty areas are where the big money resides. I am glad I got out of Patient care when I did. Our RN's start 47-52K per year with benefits.

The problem is most big places will not provide the training for those that want to branch out. They want basic plug and play RN's and that keeps the market down.

As to your loan issue most have said the truth in that until you default or are in some sort of dire straights the options are not there.

[Mtn.man]

I got it,,, call Obama and get a bailout. BAM, done...

[Colorado_Outback]

Thanks for the positive advice. I am certainly not the reason why our country is in the shitter. This is an educational loan and we pay plenty into this economy and we have never defaulted on anything. We did not qualify for any type of job that pays off loans and due to the overpopulation of registered nurses that have a BSN in this state we are forced to have my wife work for a lot less than many other nurses do. Nevertheless, why shouldn't I try to advance myself as much as possible?

So what makes this any diffrent than any of your other financial obligations?

[KevDen2005]

Why do people on this forum feel the need to hop on here and criticize something in a thread where I am specifically asking for advice. I just love how some of you feel the need to constantly make yourself heard. If you don't like how I am running my life, good for you, I don't care. I am asking if people under similar circumstances had any advice. Go to the post whore thread and make your presence know as to how much better than me you think you are because you feel I am asking for some kind of hand out.

[KevDen2005]

Feel free to go to those other threads and rag on me all you like. You aren't going to hurt my feelings. I would prefer not to have to read through all the posts of how you don't like what I am doing.

[KevDen2005]

Also, I never said I was getting a "gift." I said her grandparents are going to pay a large amount but not the complete amount. It isn't a gift. That portion of the story isn't important therefore not expanded on. Don't assume we're getting something for nothing.

[KevDen2005]

Lastly, thank you to all the stand up guys who gave direction or guidance in anyway shape or form. It is truly appreciated that you share your personal information to me. This has helped tremendously and has given me an idea on some direction on which I would like to go.

[MrPrena]

Loan at a higher amount is better than a gift.

Anyways, i found this on yahoofinance today.

http://www.huffingtonpost.com/steve-rhode/sallie-mae-tricked-me-whe_b_4385157.html?ncid=txtlnkusaolp00000592

Sallie Mae Tricked Me When I Was Young
Posted: 12/04/2013 12:37 pm


Huffington Post Reader Question


Dear Steve,


I have 5 student loans, currently totally about $48,000 after 6+ years of repayment. Two of them are private loans at only about $1,300 each, another private is at about $8,000, my only federal loan is at $11,000, and my bear of a loan is a private loan with Sallie Mae, currently at approximately $26,000 (original borrowed amount was $15,500. I have been able to pay consistently on all but the two larger loans................

[KevDen2005]

Loan at a higher amount is better than a gift.

Anyways, i found this on yahoofinance today.

http://www.huffingtonpost.com/steve-rhode/sallie-mae-tricked-me-whe_b_4385157.html?ncid=txtlnkusaolp00000592

Sallie Mae Tricked Me When I Was Young
Posted: 12/04/2013 12:37 pm


Huffington Post Reader Question


Dear Steve,


I have 5 student loans, currently totally about $48,000 after 6+ years of repayment. Two of them are private loans at only about $1,300 each, another private is at about $8,000, my only federal loan is at $11,000, and my bear of a loan is a private loan with Sallie Mae, currently at approximately $26,000 (original borrowed amount was $15,500. I have been able to pay consistently on all but the two larger loans................

Thank you for the links

[screagle2]

And this is why our country is headed into the shitter. Spend, spend, spend, and then as soon as it's time to pay it back try to find every way possible out of it.[Bang]


Thanks for the positive advice. I am certainly not the reason why our country is in the shitter. This is an educational loan and we pay plenty into this economy and we have never defaulted on anything. We did not qualify for any type of job that pays off loans and due to the overpopulation of registered nurses that have a BSN in this state we are forced to have my wife work for a lot less than many other nurses do. Nevertheless, why shouldn't I try to advance myself as much as possible?

MOD EDIT. DO NOT PULL THAT CRAP AGAIN

[KevDen2005]

mod edit

That actually made my day. It literally makes no sense. You got my lack of integrity and honesty out of this short thread. I am thoroughly impressed. I do wish however, that you move all KevDen2005 bashing comments to the post whore section. It would make it easier for me. And again, thank you for knowing everything about me. You should at least try to make a better attempt at reading to understand this all fully.

[Wulf202]

Am I too late to get in on the bashing?

If you want to save money and ruin your credit there's a way to save some but as they've already said, not much negotiating room with student loans. The longer you pay on it the more money they make so the less interest there is in getting you to pay it off fast. Read the fine print of each and make sure there's no penalties.

If it were me I'd pay off all the ones you can and leave 1 or 2 and continue to make the full payments you're making now to finish them off.

[KevDen2005]

Am I too late to get in on the bashing?

If you want to save money and ruin your credit there's a way to save some but as they've already said, not much negotiating room with student loans. The longer you pay on it the more money they make so the less interest there is in getting you to pay it off fast. Read the fine print of each and make sure there's no penalties.

If it were me I'd pay off all the ones you can and leave 1 or 2 and continue to make the full payments you're making now to finish them off.


Wulf, Thank you for your input, I appreciate it. I am not a financial expert and was curious to see what other people have done in these situations and what is legal without penalty.

Feel free to bash. Could you do it in the Post Whore section so I can read through these easier. Thanks.

[spqrzilla]

mod edit.

Dude. You out asshole even me. That's not something to be proud of.

[RonMexico]

Thanks for the positive advice. I am certainly not the reason why our country is in the shitter. This is an educational loan and we pay plenty into this economy and we have never defaulted on anything. We did not qualify for any type of job that pays off loans and due to the overpopulation of registered nurses that have a BSN in this state we are forced to have my wife work for a lot less than many other nurses do. Nevertheless, why shouldn't I try to advance myself as much as possible?
Have her sign up for the military. She will become an officer and they will pay all her loans for a 6 year reserve contract. That's the best option I can think of. I know a couple who has 325000.00 worth of student loans. She has a masters and he is in his last year of residency..... But for years they lived the high life like they were never going to have to pay them back. Even if he makes 160k a year it's still going to take 15 years to settle the debt.

[KevDen2005]

Have her sign up for the military. She will become an officer and they will pay all her loans for a 6 year reserve contract. That's the best option I can think of. I know a couple who has 325000.00 worth of student loans. She has a masters and he is in his last year of residency..... But for years they lived the high life like they were never going to have to pay them back. Even if he makes 160k a year it's still going to take 15 years to settle the debt.


We actually attempted that option. She couldn't get accepted.

[MrPrena]

There are ways. (Realistic, not really realistic, easy , and not easy).

1. Get a 2nd job. This is a great time to get a 2nd job at a retailer or other service places. It is a place where people who are working as their first job or people who have a magnificent career job who needs extra. $8.50-12/hr sure adds up. (My bonus was walking 7000+ on pedometer every 4-5hrs). This is not an easy way, but it really does help.

2. Start a small internet business. Start from stuff you do not need on your house. That will lead to other ideas. Or some kinda blog with little donations. YouTube, etc etc etc. -- Basically extra income

3. Find a company you want to work at which pays tons of hefty benefits. ESOP/ESPP, 401(k), and other tangible benefit. IF you are going to this route, I would recommend a company which is a startups, or real beat up company with huge potential. This is probably not an easy option, and requires some HW. However, I've seen more than 5 people which paid off well.

4. Ask immediate family and relatives for smaller loans with IOU. Getting TEN $500 loan is equals to ONE $5000 loan. It might be easier to pay off per person. Relatives might give you a longer time duration due to an amount of loan. who knows?

[Wulf202]

Wulf, Thank you for your input, I appreciate it. I am not a financial expert and was curious to see what other people have done in these situations and what is legal without penalty.

Feel free to bash. Could you do it in the Post Whore section so I can read through these easier. Thanks.
sarcasm didnt come thru. sorry

[KevDen2005]

There are ways. (Realistic, not really realistic, easy , and not easy).

1. Get a 2nd job. This is a great time to get a 2nd job at a retailer or other service places. It is a place where people who are working as their first job or people who have a magnificent career job who needs extra. $8.50-12/hr sure adds up. (My bonus was walking 7000+ on pedometer every 4-5hrs). This is not an easy way, but it really does help.

2. Start a small internet business. Start from stuff you do not need on your house. That will lead to other ideas. Or some kinda blog with little donations. YouTube, etc etc etc. -- Basically extra income

3. Find a company you want to work at which pays tons of hefty benefits. ESOP/ESPP, 401(k), and other tangible benefit. IF you are going to this route, I would recommend a company which is a startups, or real beat up company with huge potential. This is probably not an easy option, and requires some HW. However, I've seen more than 5 people which paid off well.

4. Ask immediate family and relatives for smaller loans with IOU. Getting TEN $500 loan is equals to ONE $5000 loan. It might be easier to pay off per person. Relatives might give you a longer time duration due to an amount of loan. who knows?

We did number one for our first year loans. Although she didn't make a lot extra, the extra it seemed coming from a second job was horrible for tax purposes. However, now that we have some additional write offs we are looking at that option again. Her mom owns a nanny business for newborns. Very good income and as soon as she loses an employee my wife will sneak some part time work in there.

I did start a firearms instruction and security consultation business on the side. It is in the early stages so not much movement yet.

Long story short is that my wife took the only job she could get out of nursing school and that was working basically as a prison/jail nurse. She stayed there longer than she wanted to because we were trying to work FMLA just right for when a baby was born. Our son was born in September so she has been looking for a new job. Now it's been about 2 1/2 years and some hospitals have started hiring. The kicker is because she isn't a new grad any more hospitals expect her to have at least acute care experience or pediatrics experience or both. She has neither from the job she was at. So she may be able to get an in home health care job to try and get that experience.

Long story short again, the rest of the family is poor with bad credit, hence the position she was in to get lots of loans and extremely poor interest rates since she had no credit and no one went with her at 19 to help her get loans and help her understand them.

[KevDen2005]

sarcasm didnt come thru. sorry


No no, it came through, I just thought I would be polite and sarcastic back, for the sake of the rest of the thread.

[MrPrena]

Okay, fair enough.
If your revenue side is on near optimal level, how about your cost side?



We did number one for our first year loans. Although she didn't make a lot extra, the extra it seemed coming from a second job was horrible for tax purposes. However, now that we have some additional write offs we are looking at that option again. Her mom owns a nanny business for newborns. Very good income and as soon as she loses an employee my wife will sneak some part time work in there.

I did start a firearms instruction and security consultation business on the side. It is in the early stages so not much movement yet.

Long story short is that my wife took the only job she could get out of nursing school and that was working basically as a prison/jail nurse. She stayed there longer than she wanted to because we were trying to work FMLA just right for when a baby was born. Our son was born in September so she has been looking for a new job. Now it's been about 2 1/2 years and some hospitals have started hiring. The kicker is because she isn't a new grad any more hospitals expect her to have at least acute care experience or pediatrics experience or both. She has neither from the job she was at. So she may be able to get an in home health care job to try and get that experience.

Long story short again, the rest of the family is poor with bad credit, hence the position she was in to get lots of loans and extremely poor interest rates since she had no credit and no one went with her at 19 to help her get loans and help her understand them.

[Gman]

I know a couple who has 325000.00 worth of student loans. She has a masters and he is in his last year of residency..... But for years they lived the high life like they were never going to have to pay them back. Even if he makes 160k a year it's still going to take 15 years to settle the debt.
...and they'll be 15 years further down the road where they're likely not going to be able to redirect money toward retirement. Retirement funding is something that seems to never get enough attention when we're younger. The time value of investing for retirement early is so much more important than spending hundreds of thousands on education that you'll likely never recover financially.

[ChunkyMonkey]

...and they'll be 15 years further down the road where they're likely not going to be able to redirect money toward retirement. Retirement funding is something that seems to never get enough attention when we're younger. The time value of investing for retirement early is so much more important than spending hundreds of thousands on education that you'll likely never recover financially.

+1. It's funny how I reviewed resumes of MBA all the time, meanwhile I was such a bad student, got expelled and transferred out of CU, barely got through UCD, but now in position to affect and retrain these 'higher educated' folks. The world evolves so fast that fresh graduates are outdated instantly. Nowadays, we look for street smart guys rather than MBA.

[JM Ver. 2.0]

I was a high school dropout. :-(

Sent from my teepee using smoke signals.

[hollohas]

Are you claiming your student loan interest tax deduction every year?

[MrPrena]

Street Smart vs Book smart.

People over amplify the "street smart" vs "book smart"

People with both skills can be hired. If someone wants to allocated their labor into "Street Smart", you can hire someone who are more street smart than book smart. Vice versa. Another one is main st smart vs wall st smart. Honestly, you need BOTH to be successful in majority of sectors.

[bogie]

Some misconceptions here regarding taxes. Check out the gift tax exclusion at irs. If you file jointly, they can pay up to $28k before THEY pay tax. Only the donor pays the tax on a gift, unless you want to.

[Wulf202]

I disagree about the young retirement gman is talking about. I busted my ass and did stack money away in retirement accounts. Only to loose 90 percent in trusting the classic strategy.

[Gman]

I disagree about the young retirement gman is talking about. I busted my ass and did stack money away in retirement accounts. Only to loose 90 percent in trusting the classic strategy.
Where did you put your money? There is the usual risk/reward that you have to manage.

Attempting to put away enough at the end of your career won't add up to as much as compounded interest and growth over time.

[MrPrena]

With all do respect to MBA's, Society give too much credit for MBA.
I thought MBA would be as great learning opportunity for me, and I did start about 13 years ago. With all the MBA hype, I was suckered into it. Personally, I thought it was total waste of money. I think I could've learned more crap in Women's Studies or Religious Studies than a MBA. It is basically spoon feeding crap with simple High school math. Projects were useless joke. I got out of the program as soon as I thought it would be cost efficient to just drop out of program. (if i was smarter, i would've drop out on the 1st day and save the tuition $)
When my firm was teaching me how to make a real tea, MBA was like PLAYING tea party with plush doll. Oh, it wasn't a crappy business school either. It was one of the top in CA.

If someone wants to get an MBA in finance (not falsified MBA MSFS crap), I would rather allocate my time on CFA and CMT.
Oh yeah. One of my favorite mentor was HS graduate. Before I knew that, I thought he did his under at Cal tech, and MBA in Haas or Marshall at least. He saved tons of $$ on edu for sure.....




+1. It's funny how I reviewed resumes of MBA all the time, meanwhile I was such a bad student, got expelled and transferred out of CU, barely got through UCD, but now in position to affect and retrain these 'higher educated' folks. The world evolves so fast that fresh graduates are outdated instantly. Nowadays, we look for street smart guys rather than MBA.

[Circuits]

With all do respect to MBA's, Society give too much credit for MBA.


MBA is a vanity degree for an uneducated overachiever, or a life raft for an overeducated underachiever.