September 21, 2017, 09:37:18 PM


Author Topic: Student loans in general.  (Read 770 times)

Offline weigookin74

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Student loans in general.
« on: July 19, 2017, 04:29:44 PM »
AN EARLIER CONVERSATION I STARTED ABOUT STUDENT LOANS IN GENERAL (over on the Australia thread):


Quote from: weigookin74 on Yesterday at 06:24:12 PM

A lot of countries don't make you pay when out of country.  Seems only Canada and the US try to get you to pay and count it against your credit bureau but lift your credit up if you do pay.  Either way, I've said this to other countries people's that you should try to pay off your loans while here.  It's gonna suck a lot if you go home in a few years and have to begin paying your loans even if it's only 10 or 20 per cent of your wages.  That's still a huge tax on income on top of what your regular deductions will be, plus trying to buy a house, have kids, etc.  Pay that shit off now while you can even if the next few years in Korea are less enjoyable.  Then, go home and give student loans the finger and tell them to get out of your life.


Quote from: gotngoidea on Yesterday at 06:28:48 PM

That's all fine and dandy for those with manageable student loans, but my situation has my student loan coming close to the 6 figure mark, so I don't think I would be anywhere close paying it off whilst in Korea.

Quote from: weigookin74 on Today at 01:11:25 PM

I'm not judging anyone else.  But my loans with interest factored in ended up totalling 63 thousand.  I prob had another 30 k total of credit card debt with much higher APRs than my student loans.  This is including interest and some money spent on them here too after paying down some balance and having to put a charge back on it.  I travelled and spent a bit during my first 4 uears here.  Exchange rate was much more horrible for many years for Canadians and Aussies than it is now. 

So, it will have taken me 10 years to pay it all off.  After the 4 year mark I took a frugal turn though I admit the 2014 exchange rate recovery was a huge boost.  Still have a couple of grand in cc debt because I've been screwing around.  But very soon gone.  The one thing I tried not to be frugal on was health.  Sometimes ate junk.  But sometimes ate good healthy food.  Sometimes a gym membership.  Had to have some guilty pleasures.  But weekend long drives, travelling, etc went the way of the dodo bird.

I guess I'm here to say it is possible but will mean placing your life on hold on some ways for several years.  Finding cheap hobbies to occupy your time helps.  Avoid travelling boozing and girlfriends unless you know they will be frugal with you and not get pregnant.  Future you will be grateful.  40's you can start a whole new life.

Quote from: welcomebackkotter on Today at 02:43:52 PM

I'm thinking the American and Canadian student debt issue is a little different from the Australian student debt system.   Our loans are adjusted with CPI, but not charged interest like you guys.  Nor do we have to pay in back within a fixed time (I think I read that Canadians have to pay within six months of graduating).  It will not affect our credit rating either.  We pay it back at tax time on a sliding scale depending on income.  So if we get a decent paying job that gets us over the threshold we pay it back.  I wish we still had free education, but this is still a pretty good system.  Unfortunately they keep lowering the damn threshold and increasing damn fees so it's steadily getting harder.

So while yes, it is obviously a good thing to get that debt paid off, or at least some of it, when you are flush enough to do it, but it is less of a pressing issue.  These HECS debts are not crippling our lives.  And it's not 10-20% of our wage that we have to pay.  It's 8% if you're earning over 100k per year, and only 4% when you're over 54,000.

If we want to discuss student loans and debt in a general sense, then by all means, let's begin another thread.  I hope this can stay focused on the Australian HECS debt issues.

Offline kriztee

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Re: Student loans in general.
« Reply #1 on: July 19, 2017, 04:43:12 PM »
Canadians don't have to pay back in 6 months. It's interest free for 6 months. So if you do manage to pay it off that quickly then you don't have to pay more.

Offline weigookin74

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Re: Student loans in general.
« Reply #2 on: July 19, 2017, 06:03:40 PM »
You don't have to pay for the first six months.  But interest does accumulate on the loan once you have completed your studies.  During these six months it accumulates in other words.  Then, you file for repayment assistance if you make under the threshold.  It use to be called interest relief when I was living in Canada.  Interest relief the government paid the interest and the principal balance remained frozen.  When I graduated, I filed for interest relief every six months if I was below the threshold which I was barely.  (Limits weren't too high - maybe 2000 a month back then.)  Under that program, I submitted proof of income copy of tax return or a couple of pay stubs photocopied or something like that.  You called the call center and they mailed the forms to your house to fill out.  Put the photocopied forms in too and mail it back to them.  So, I paid nothing and kept my loans in good standing.  I had to be a resident of Canada to qualify.  Once I got over here, I had to pay.  I filed a month before I came over again and so didn't have to pay for my first 5 months here.  I needed that money to pay off some short term debts and money I owed relatives.  So, it worked out well. 

It changed a couple of years after I got over here.  It became repayment assistance and you had to pay something.  I plugged in my old income on their website out of curiosity and would have had to pay 55 dollars a month while the government paid the rest of the interest portion only.  The principal remained frozen.  This means I would have had to pay each month and I still wouldn't have been paying down my loans.  Kind of shitty.  I guess being unemployed or on welfare means you didn't have to pay though.  I think this was after I was here a few years when inflation raised the cost of living and my old income would have been less.  So, the threshold seemed pretty terrible from what I could tell.  I barely had money left over when I was working then.  So, it really would have messed me up to have to pay that amount. 

With the old system and the new system, you can apply every six months for this and then after 5 years total, you have to pay the full amount or get sent to collections.  You might get sent before a judge if they can track you down.  (If they can track you down.)  A distant cousin of mine was hiding from his and he asked his employer to pay him with a pay check he went to bank and cashed.  He was paranoid the government would reach into his account and take the money.  I think he banked with a different bank than what his bank was when he got the loans.  I had another friend who tried to avoid paying because he wasn't making any money and he got tracked down and taken to court.  The judge ordered him to pay 100 dollars a month when he wasn't even paying the interest.  He did try to hide though.  He was waiting till the 10 year mark so he could declare bankruptcy legally on them.  (Use to be the rule.) 

Another friend was sent to collections, but he hid from them and even moved out to Alberta sleeping on a dudes couch for a while and was doing some construction.  Student loans couldn't track him down, so he was in the clear I think.  A few I met came to Korea to teach and they couldn't be tracked down.  All bad debts if a judgement can't be obtained against you (you can't be found and given a subpoena) disappear 6 years from your last payment date.  The government will go after you to make sure this doesn't happen.  Credit cards and banks will or will not depending on how much the debts are.  (But those are easier to declare bankruptcy on.)  Those who came to Korea didn't pay and they got off scott free after 6 or 7 years of being here.  Student loan center doesn't report to Korea. 

In the US, your debts never disappear, as I understand it.  You go home with a lot of money saved and try to settle?  In Canada the old system was you pay whatever until year 10 and then declare bankruptcy, your credit resets to 0 six years after that.  Now, I hear the new system, it's seven years.  I also hear the new system after 10 years if you made an effort to pay, you ask for some other kind of repayment and the government will pay the rest of your loan off over the next five years now?  (You still have to pay your minimum payment, during this time.) 

Not sure what to think of the program.  It seems a mixed bag.  I repaid mine and most of my cards now and have a really great credit score.  Going home after several years with a default would have had my credit reset to 0 but would have no doubt spent a long time rebuilding my credit whereas now my credit is established.  That said, it you could save 100 to 150 grand or more defaulting might not have been a bad idea?  I paid close to 90's when I factor everything in.  (Interest, paying off, charging some more, etc.) 


Other English countries, seem more flexible with repayment, but you can't build your credit by repaying.  Still paying 4 % of your income on top of what you're already getting taken off when trying to buy a home and raise a family will be an added expense and not fun.  Your effective tax rate will be higher for decades until retirement at that pace.  I guess everyone has their own plan. 

Offline welcomebackkotter

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Re: Student loans in general.
« Reply #3 on: July 19, 2017, 06:05:04 PM »
Canadians don't have to pay back in 6 months. It's interest free for 6 months. So if you do manage to pay it off that quickly then you don't have to pay more.

Whelp, I got that mixed up.  I knew there was a six in there.

However, I am curious, if you're not making an effort to pay back the loan, does it just build up? Affect your credit rating? Get to a point that they'll come repossess stuff? Garnish your wages? What are the penalties (if any) for not paying it back?

Offline kriztee

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Re: Student loans in general.
« Reply #4 on: July 19, 2017, 06:13:05 PM »
O.o I paid mine off the day I got the letter saying how much I owed, but what they do is send it once it starts accumulating interest so the next month I got a letter saying I owed a cool 15$ because I paid it 3 days in to the 7th month  >:(

Canada also caps how much student debt you have have, or at least in Ontario you can only owe so much in official student loads. For example, my horrible b**** ex friend took more than full time course load in uni and went through summers to get a double major in nothing productive. Her goal was to take as many courses as she could to max out herloans to the point where a good amount of it was auto forgiven because it was over 20grand a year. She also planned to blow a bunch of spending money on a line of credit her dad opened for her then never pay it back and cut contact with him (thus the b**** part)

Her back up plan was to ditch Canada, people bail on their loans like that and after a certain amount of time the government can't come after you. I'm not sure what how they'd come after you tho... It's Canada so probably stern yet disappointed letters.

Offline Lowfoam

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Re: Student loans in general.
« Reply #5 on: July 20, 2017, 12:02:11 PM »
American checking in.

I went to Uni from 2010 - 2012, racked up ~$24,000 in student loans. I had 3 unsubsidized, 3 subsidized. Unsubsidized loans generate interest from the moment I sign the check to accept them. Subsidized do not generate interest until I graduate university.

When I graduated I had about ~$900 dollars in interest.

I spent about a year and a half saving up money to come to Korea and figure out what I was going to do with my life. It was hard because of the rural area I lived in. I was making (at most) ~$12,000 a year. Due to insane gas expenses, and a few other things, I could only really afford to maybe wire ~$100 a month to my student loans. This meant that I was only paying maybe 5 dollars on principal every month? My interest was pretty gnarly.

The interest rates were sitting at about 6.5% for 4 of my loans. Thankfully my loan provider had a program that allowed me to enroll in auto-pay, and they'd reduce my rates by .25%.

I was on income-based repayment, so my monthly payment was sitting at 0$ for this time in America.

Eventually I came to Korea and set up shop here, and due to the lower CoL I was able to throw anywhere from 1.2k - 1.7k to my loans depending on how well the won was doing that month.

I arrived in Korea in August of 2015 and paid off my student loans in full in December of 2016. It sucked, but it felt nice getting those loans off my back. Those rates are just absolutely ridiculous. 

Offline fairydustangel8

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Re: Student loans in general.
« Reply #6 on: July 20, 2017, 03:52:54 PM »
American as well. It is true. Pretty much the only way we can get rid of our student loans is to either pay them off or die. There are a few loan forgiveness programs, but they aren't available to everyone. The most common one is the Public Service loan forgiveness program for teachers that qualify. They need to make 120 consecutive payments to their loans on time before their loan is forgiven while working for a qualified employer. There's a lot of rules to it as well, so it can get a bit tricky. I personally don't have any experience with it.

As for my own story, I moved to Korea in Feb 2016 with about 22k or 23k of student loan debt. I've been sending over half of my pay back home every month since I moved here to get those suckers paid off. If all goes well, I will be finished and completely debt free by the end of next month. I started with around 40k in student loans 4 years ago, and it was definitely much easier to pay them off here with the lower cost of living than back in America. Instead of working 60-80 hour weeks, I work 40 here. Instead of paying rent, taxes, transportation costs, and all that fun stuff; I pay zero here. I'm much less stressed out and thrilled that all the sacrifices I made the past four years will be over soon.

Offline stan rogers

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Re: Student loans in general.
« Reply #7 on: July 20, 2017, 05:52:40 PM »
Canadians don't have to pay back in 6 months. It's interest free for 6 months. So if you do manage to pay it off that quickly then you don't have to pay more.

Whelp, I got that mixed up.  I knew there was a six in there.

However, I am curious, if you're not making an effort to pay back the loan, does it just build up? Affect your credit rating? Get to a point that they'll come repossess stuff? Garnish your wages? What are the penalties (if any) for not paying it back?

Depends if they can find a debtor or not. In country (unless the debtor drops off the grid) it's easy for them and they will make the debtor's life miserable, take legal action and do a host of things like you mentioned. On the other hand, I heard of one guy who dropped off the grid for several years due to drug addiction, went to rehab and was able to make a settlement for 40 cents on the dollar. Drug addicts have a very poor repayment record so I assume the collections agency was eager to settle.

If the bank can't find a debtor then it goes into collections who will search for the debtor and probably harass the debtor's parents and family members for knowledge of their whereabouts. After several years of calling anyone they can think of without success, the debt will start being processed by a collections computer. At this point the interest stops accumulating because the debt has been written off as uncollectable. It becomes classified as a toxic asset to the collection agency. The computer will periodically send out letters to last known addresses filled with BS threats, but also a settlement offer. The older the debt becomes the more toxic it is, hence the better the settlement terms.

But I also heard that in some jurisdictions that responding to a settlement offer can also be a trap regarding the statutes of limitations. Ideally it's best to pay your student loans back. But if you are in default and need advice, talk to an expert like a credit counsellor before communicating with a collection agency.
« Last Edit: July 20, 2017, 06:10:52 PM by stan rogers »

Offline weigookin74

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Re: Student loans in general.
« Reply #8 on: July 31, 2017, 11:55:52 AM »
Canadians don't have to pay back in 6 months. It's interest free for 6 months. So if you do manage to pay it off that quickly then you don't have to pay more.

Whelp, I got that mixed up.  I knew there was a six in there.

However, I am curious, if you're not making an effort to pay back the loan, does it just build up? Affect your credit rating? Get to a point that they'll come repossess stuff? Garnish your wages? What are the penalties (if any) for not paying it back?

They do affect your credit rating in the US and in Canada.  If you pay on time and pay them off, you'll have a high credit score.  If you don't pay, you'll have bad credit.  They are harder to ditch in America.  In Canada, I guess, they would be subsidized, unless you go and get a bank loan.  Subsidized in the sense that the government pays the interest until you finish your studies.  Then, when you finish, you can wait until 6 months after before paying.  But interest starts being added to the loan and the government no longer pays it.  There are some limited help options to apply for every six months as I mentioned before for up to 5 years. 

Some have hidden out here for several years and the loans got written off.  In America, they always exist, unless you settle them.  Save up some of the money of your loans and promise to give so much money in exchange for them being written off and you not owing anything else.  But, it would prob have to be a long number of years in order for that to happen.  The longer the time, the more favorable the settlement terms will be.  I'd prob wager over a decade minimum.  But save a lot of your paycheck even if you're not paying on them.  Then, I will guess it will take another 6 or 7 years for your credit rating to reset itself. 

In Canada, non payment on any debt where any debtor can't find you after 6 years means it gets written off.  If they find you and the debt is large enough, they will take you to court to force payment, a settlement, a declaring of bankruptcy, etc.  If the debt is a few grand of credit cards, they usually won't bother.  If it's 50 grand, yeah, they're coming for you.  Student loans, they have lawyers in most cities who will take you to court and demand some payment on it.  If you move a lot and change provinces, they might not find you.  They can't do anything to you here.  So, after 6 years from your last payment or last point of contact, debt is wiped out.  Then, your credit rating is 0.  You have to slowly rebuild your credit rating over time. 

If you pay your debts from here and don't default, you'll build your credit rating from here and have a pretty good one when all is said and done. 

Offline weigookin74

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Re: Student loans in general.
« Reply #9 on: July 31, 2017, 12:04:11 PM »
O.o I paid mine off the day I got the letter saying how much I owed, but what they do is send it once it starts accumulating interest so the next month I got a letter saying I owed a cool 15$ because I paid it 3 days in to the 7th month  >:(

Canada also caps how much student debt you have have, or at least in Ontario you can only owe so much in official student loads. For example, my horrible b**** ex friend took more than full time course load in uni and went through summers to get a double major in nothing productive. Her goal was to take as many courses as she could to max out herloans to the point where a good amount of it was auto forgiven because it was over 20grand a year. She also planned to blow a bunch of spending money on a line of credit her dad opened for her then never pay it back and cut contact with him (thus the b**** part)

Her back up plan was to ditch Canada, people bail on their loans like that and after a certain amount of time the government can't come after you. I'm not sure what how they'd come after you tho... It's Canada so probably stern yet disappointed letters.

Your loans are capped at 20 grand a year, you mean?  I'm sure school is much more expensive now than it was 15 years or so ago.  You paid off your loans within 7 months of finishing?  You must have borrowed very little money.  Congrats.  Paid mine off last year.  Got a bit of CC debt almost finished with now.  (Exchange rate was horrible for Cdns for several years after the Great Recession hence slowing down my progress greatly.)

Offline yirj17

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Re: Student loans in general.
« Reply #10 on: July 31, 2017, 03:19:56 PM »
Came over with about 7grand (usd) in debt.  Finished college with about 21grand in debt, paid off the bulk of it working 3 years after graduation.  Thankfully the cost of living was pretty low in my town and it was easy to find a roommate to split living costs.  Wasn't able to land a full time job but I had a stable job during the school year, worked full time during the summer and also did odd jobs to supplement my income. 

Could have paid off my debt in full my first year here if I tried hard but I chose to do a lot of traveling instead.  Worth it. 

During school I often wondered if I should have picked a "fancier" university but after all was said and done, I was glad I'd gone with the affordable state school that offered a good scholarship.  I would have been so stressed out if I were much deeper in debt. 

 

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