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April 27, 2009

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there are sometimes loan forgiveness programs for those who are in public service. Your reader may want to see if there is anything like that available. Also, they may be able to defer payment due to the unemployment situation (if so, the should have them defered and THEN make payments to pay principal and not interest). I would also see if the state patrol has some sort of trooper financial planning that they might be able to access for free.

WOW! no seriously... WOW! That is an extreme amount of debt to rack up for an undergrad program. Sounds like you are ready to move on from your past mistakes and get this behind you. Unfortunately there is no easy way of just washing away $265,000 of education debt. Bankruptcy usually is not applicable with educational debt but I believe recent bankruptcy law now allows the discharge of educational loans if you can prove undue hardship. Having lost your job, you may now qualify. I am sure some bankruptcy attorney's read FMF and will probably be able to chime in and validate if this would be an appropriate approach for you.

Ouch. I'm shocked that they'd even lend someone $250k for a bachelors. Its very unfortunate that they got themselves into this situation. Its also absurd that banks lent them that much money.

If they lost their job due to being hit by a drunk driver then they're disabled? Are they qualifying for disability? Or is the injury only short term? Whats the income situation and prospects?

What about other career options? They don't say what school it is so it may or may not be worth something. If its an Ivy league school then the degree might open doors.

What interest are the private loans at? If its above 6% then they might look into consolidation. If their credit is good then they might be able to consolidate for 30 year term at 5-6% range.

"I had a beat up old Jeep and I couldn’t stand that I wasn’t fitting in."

You should've transferred to another school. Now you're screwed. It does almost seem unfair to be 23 and possibly screwed for life over borrowing money, but then any 18 year old knows that borrowing money to make payments on a $70,000 vehicle (and likely living in some amazing condo) is beyond stupid. I hope Muffy and Buffy et al. were worth it.

You're young, life will go on as it will. For the loans, there are 2 steps to eating an elephant. 1) Start 2) keep at it, one bite ata time. Good luck.

I don't know how you are going to be able to fully fund a Roth IRA and pay the minimums on your loans at the same time.

If you are able to work, I think that should be your first concern. Then it is the four foundational areas of housing (rent and utilities), food, clothing, and transportation.

After that, a small emergency fund to keep Murphy at bay.

Then the debt.

Good Luck.

I have a son starting college in the fall. I'm going to have him read your story as a cautionary tale of overextending your credit. Did your parents have any input into your decisions? If they did, then you're not completely to blame. An eighteen year-old kid needs guidance, regardless of how good his grades were in high school. The only advice that I have for you is to stick to your plan of paying down the debt. It may take many years to become debt free, the hardest part is starting.

I would enroll in Dave Ramsey's Financial Peace University, or at least buy his book "the Total Money Makeover." Both of those things helped me tremendously, and even with your large amount of debt, I think he can give you the steps to peace.

Jim-
I believe that you read it wrong. He lost his job because he was arrested for DUI- not the victim of same.

First we need to breakdown the problem:
~$265,000 Education Loans
~$12,000 Credit Card Debt
~Unemployed

Since this person is unemployed, I guess it would be safe to assume that he will not be able to make payments on his loans. Therefore, his credit score will probably take a beating, thus further decreasing his chances of getting a well paying job. The downward spiral will probably continue from there.

Since I do not have any professional experience with these matters, the only advice I can offer is to consider speaking with some credit counseling agency. A good place to start might be this article from Get Rich Slowly:

https://www.getrichslowly.org/blog/2009/04/24/ask-the-readers-debt-consolidation-or-consumer-credit-counseling/

Also he might try negotiating a new payment plan or interest rates with the organizations who gave the education loans. Another possibility is to speak with the financial aid department of the former college. They might be able to give some useful advice or refer the person to organizations that can help. If ALL else fails, then as a LAST resort, the person might consider filing for bankruptcy (if this allows ALL his debt obligations to be forgiven). I hate to say it, but seven years is definitely better than a lifetime.

I hope it works out!

I'm here scratching my head trying to figure out where he went to school. I went to Stanford (graduated 4 yrs ago), which is the type of school where you'd expect to find really wealthy kids, but I didn't see any Mercedes or Bentleys.... Most of the undergrads didn't even have a car (bike worked fine). Going into town for dinner a 2-3 a quarter was a luxury to me, and most of my friends. Some of my friends didn't have a computer and did all their work in the computer lab. Yes, I heard rumors of $100 bottles of scotch, but really, you'd have to put effort into seeking out friends with that kind of wealth. Most of us were grateful for our parents sacrafices to send us to school and were working too hard to find time to fritter away money.

Just wanted to comment in case some people are reading this thinking "I don't want to send my kid to a school were everyone else is driving a Mercedes"!

On topic, it's really a shame that he was allowed to take on so much debt! I'm confused about his employment situation - is he disabled? Going to go back to work soon? I can't formulate suggestions on what to do until that's clear.

unemployed? for now hardship deferral is best, try a side business or pt job to boost up your income

I read FreeMoneyFinance.com, Consumerist.com religiously. And believe me, I'm kind of religious. Let's not go into that. I'm an immigrant. My father moved to here sometimes ago and I moved here when I started high school. We were six in the family and living on less than $2,000 a month. So I don't come from any affluence of any means. I became my own man when I started college.
Yes, I went to a private college for five years. And yes, I drove a 1989 Honda Civic while everyone else was sporting Benz, and Porsche. Most of the student were in this university on daddy's dime and spent as such. I wasn't. I worked from day one of my college life to the last day. My scholarship and grant covered most of the tuition. When it didn't, my work it. And my angelic parents provided the rest, a few hundred here and there. I didn't take out a loan until I was in my final year. Then finally in my senior year, I decided to take a loan on $10,000; because, I wanted to dedicate more of my time to classes that were basically a test on the entire culmination of my university education. It's was very economical and logical choice. I decided to delay university a year longer because I couldn't afford to finish in four years. I graduated with a measly $10,000 loan.
Today I make about $50,000 more than I did in college. This is an approximate number. I don't want to give out my financial details. I can pay off my student loan in two months if I so desired. I get to save some money in tax by paying in installment. I also have a very low interest rate.
The main point I want to get across is that you can get an expensive education without paying expensively for it. If you intention is to get an education and not keep up with the Kardashian's. Let's face it no matter how rich you get, there will always be the Jones who are one-upping you always. And you can never keep up with them. Your lies will catch up to you one day.
I can’t believe someone can be in $250K in for a bachelor’s degree. I thought only medical student rack up this much loan. Still for their entire education, pre-med, med, residency, etc. As my dad says, “What has happened has happened by God’s will. Start fixing the problem now.” Here’s my advice to the person:
Since you’re unemployed, your first priority would be getting a job. Look into working for AmeriCorps. If you work for them, I think you can have your loans deferred. But don’t just work for them as your only job. They pay you minimum wages. Pick up a second job even if it’s flipping burgers. Don’t be prideful. As long as you are not stealing, even cleaning poop is an honorable job. (Immigrant mentality. And yes, I did clean bathrooms when I was working in college. A few times only though. :P)
Get your loans organized into a good payment plan by consolidating. And man, you better not be spending a single penny in luxury.

Wow... I ... wow. I wish I had an answer here.

For starters, throw the Roth IRA out the window. You are ignoring the facts if you think that is a possibility.

You owe $265,000 in student loans and $12,000 in credit card debt. You're looking at $277,000 in debt.

You're unemployed. Unemployment won't last forever.

(Were you hit on the job and qualify for disability? Or not? How did you lose your job from a wreck? Not enough details.)

You have very, very little options here. Do you have family nearby you can live with? Do they know your situation? It's time to cut out everything. And I mean EVERYTHING from your budget. No rent if at all possible. Minimal utility costs. No cell phone. No eating out. Rice & beans to eat.

It will be a shocking change in lifestyle. Equally as shocking as your debt. You've got to own up to it, realize you have a huge mountain to climb, and start digging your way out.

Good luck.

The OP is obviously educated and articulate. Being hit by a car has not impaired his ability to make a living, but it has changed his career path. So get busy. What are you passionate about that you can do with your current physical limitations?

Sell the Mercedes.

You ARE going to impair your current lifestyle. You didn't do it for college, so get busy cutting to the budget to the bone now.

What's done is done. The only interesting thing is that since you were so taken by the lifestyle in college I am surprised that you went for a career in law enforcement. Police officers aren't noted for getting the big bucks. My guess is that there is still an emotional gap between what you can reasonably expect to earn and how you can reasonably expect to live.

1. I read the letter as the guy was hit by a drunk driver. If it was on the job, he should be getting an insurance disability payout. A friend of mine was a MD state trooper who was hit by a drunk driver while writing up a speeding ticket. His back was screwed up and he was retired off the force by 30. If he's talking about an private accident, he should definitely try to sue for lost wages. It's unclear why he isn't working. Could be downsizing of the force vs disciplinary action. I don't want to assume anything on that.

2. Sell the Mercedes if you can. I assume you were hit in that car. Get the insurance money if the car was totaled, but a Civic and throw the money at the debt.

3. Go to forebearance on your loans ASAP. Your interest will build but you really need to find a job first. If you haven't picked a repayment plan, pick the graduated one so you can reduce your current payments and save an emergency fund. Overpay the minimums on the graduated payments as much as you can once a job is secured.

4. GET A JOB. GET A JOB. GET A JOB. TSA is always hiring screeners. Better than nothing. My friend the former trooper is a security guard at a university. Is that a possible line of work?

Good luck. I hope this guy has learned his lesson about future earnings and current spending.

I agree with previous posters that we need more info on the employment situation - is he getting disability or a settlement from the drunk driver? Is he unable to work or just unable to work in his previous capacity?

Other than that - I think the OP needs to adjust his expectations. Yes, funding a ROTH is the "right" money move, but not for everyone and certainly not for him. He needs to pay down the debt first.

If I were him, I would: sell everything I own except basic clothing and furniture (mattress on the floor, a few boxes or set of drawers, patio furniture), move in with a relative or friend for free or as cheap as possible, eat in every meal (pb&j, tuna, rice and beans), sell my car and buy a bike, get every job available to me and throw all money $ at the debt.

I know he stated that he wants options that won't "completely deteriorate" his quality of life - but I don't see how that can be done. His life in college was enjoying this money, his life now is paying it back. Hard lesson to learn and I wish him the best of luck!

If you continue to work in the public sector, you may be able to get some portion of the Federal loans forgiven:

https://www.finaid.org/loans/publicservice.phtml
https://www.ibrinfo.org/what.vp.html
https://www.equaljusticeworks.org/files/studentloan_checklist_6-19.pdf

These are new programs, and my impression is that not all of the kinks have been worked out yet, but the idea is that after 10 years of payments (which can be based on income ie. less than even the interest due), any unpaid remaining Federal debt is forgiven.

You have to be very careful that you qualify, and I think one issue yet to be resolved is that the forgiven loan amount in year 10 can be counted as income (and taxed!), but this could be VERY worthwhile for someone in your situation.

If you continue to work in the public sector, you may be able to get some portion of the Federal loans forgiven:

https://www.finaid.org/loans/publicservice.phtml
https://www.ibrinfo.org/what.vp.html
https://www.equaljusticeworks.org/files/studentloan_checklist_6-19.pdf

These are new programs, and my impression is that not all of the kinks have been worked out yet, but the idea is that after 10 years of payments (which can be based on income ie. less than even the interest due), any unpaid remaining Federal debt is forgiven.

You have to be very careful that you qualify, and I think one issue yet to be resolved is that the forgiven loan amount in year 10 can be counted as income (and taxed!), but this could be VERY worthwhile for someone in your situation.

Kevin said: "I believe that you read it wrong. He lost his job because he was arrested for DUI- not the victim of same."

I don't think so. The original post says: " I lost my job due to a drunk driver hitting me" So someone was drunk and hit him. He did not say that he was arrested for a DUI.

Jim

Readjust your lifestyle to bare essentials. If mommy and daddy can tolerate you as a roomate, take them up. Find a job, any job. Don't be too proud to take simple work even for a college grad. Sell your expensive car. Pray you still have health insurance from your old job. You are young and can survive this. Don't save for retirement, buy a house, or invest. You do not have this luxury. Pay off this debt and live very simply. The other poster's ideas are great as well.

I agree with starting your roth now. if the programs listed above fall through, you won't have a chance to catch up on retirement savings. Retirement's not going away just because you have loans now. Retirement savings is a "debt" you owe yourself. It needs to be paid, too. I can see it not being paid while the credit cards are being dispatched; that's short term. But the student loans will take too long to pay off. I mean, what are you supposed to do? Start saving for retirement at 54 when the loans are paid off?

If you are permanently disabled, your student loans will be dismissed. Please explain why you lost your job due to an accident so that alternatives can be worked out.

While i agree that you should cut back, i tried to cut out 100% of luxuries and couldn't do it. I was told i would crack, but i was determined to succeed and i was going to prove them wrong. Also, I felt I didn't "deserve" to have a life. I wanted to punish myself for making such stupid mistakes. Complete deprivation was my way of trying to show everyone that i was responsible after all. Ha! I cracked and ended up spending more money than I would have if I had just allowed myself some blow money. paying back the money is all well and good, but if your payments are for 30 years like mine, you can't put off life that long. It isn't reasonable. Even Dave Ramsey allows for blow money in the budget. This is a life-long project and a balance needs to be struck for success. We've made more progress in 2 years while allowing ourselves spending money than we did in 5 years of deprivation.

Also, you can use your degree to start a side business. Do something in your field with low startup costs. What's your degree in? What hobbies do you like to do? Did your parents give you lessons when you were a kid? Piano teachers make $20/hour. Give wind surfing lessons, etc. You won't work that many hours, but you'll have fun and not work yourself to death (2 hours teaching wind surfing @ $20/ hour vs. 8 hours or so at minimum wage somewhere). I would have 2 jobs to start with. You can't work that much overtime on a long term basis. your body will give out.

I can't fathom $265K in student loans. How can you incur a debt that large, if the max was $30K per year? The OP is 23, so he can't have spent 8 years in school...what are we missing from this story?

That said, even at a low 6% rate, he'd have to pay back $1325 just in interest charges, every single month! (At 8%, it's closer to $1800/month.)

He's basically mortgaged his future, with no house to show for it.

At 6%, payback in 30 years: $1600/month
At 8%, payback in 30 years: $1944/month

I think that's more than my net pay during my first job out of college in 2004.

At the rate these loans are accruing interest, funding the Roth IRA should be his last priority.

He would've had a problem even if he didn't lose his job.

https://www.finaid.org/calculators/scripts/loanpayments.cgi

Loan Calculator

Loan Balance: $265,000.00
Adjusted Loan Balance: $265,000.00
Loan Interest Rate: 8.00%
Loan Fees: 0.00%
Loan Term: 30 years

Monthly Loan Payment: $1,944.48
Number of Payments: 360

Cumulative Payments: $700,007.02
Total Interest Paid: $435,007.02

Note: The monthly loan payment was calculated at 359 payments of $1,944.48 plus a final payment of $1,938.70.

It is estimated that you will need an annual salary of at least $233,337.60 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 1.1. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $155,558.40, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.7.

Jim- you are correct. My bad.

Hi - here's a way out. You don't have to repay a dime, can travel the world, and meet and date very, very pretty girls. How? I will tell you, but most can't fathom it. So, let's look at some facts. At 6%, $265,000 is increasing by about $19,000 per year. Even if you get a job paying $50,000, about half of that, after taxes, will only cover the interest. Essentially, you're scr*wed. With the high cost of living in the US and inflation baked into the cake, you'll have one heck of a time even making a dent in that mountain of debt. Unless you find a generous bankrupcy judge, convince a psychologist that you've gone bananas (and therefore should be excused from this burdon), be like debt kid, or go on Oprah, you face a lifelong slog trying to pay all that off. In fact, your youth -- and you're only young once -- is in jeopardy! However, you can still enjoy your youth if you move abroad and work there. All you need is a BA in anything to teach English in many countries, and in a few, you can earn decent money. You would have to set yourself up in business there (or else don't report your wages) because although living overseas allows you to claim an $80,000 foreign earned income exclusion, it is the adjusted gross income that the government will be looking at when they determine your payment -- AFTER you consolidate your loans with a US Dept of Education consolidation loan (DirectLoan) and choose the 'income contingent' repayment plan. Then, you claim that you earned below the poverty line (easy to do for your first few years) and your payment is zero. Your credit isn't ruined and you appear to be 'paying on time'. After 25 years, the loan is forgiven and you don't have to pay a dime all that time if you earn below a certain amount. What if you start a business and start to earn way more than that? Put the business in someone else's name (like your new wife's name) and make yourself an employee on paper. If the dollar falls in value against foreign currencies (which it may) and if there is hyper-inflation in the USA in the near future (which there may be), both of these conditions can work in your favor, as the former would make it easier to build an IRA in the USA, and the latter would reduce the magnitude of the debt relative to the value of everything else. It would also ruin savers, but that's another story. Can you leave the USA and live for the next 25 years abroad until that loan is forgiven? If you can, you can easily save enough money to retire on -- at 48 -- when you finally return. Otherwise, it's poverty that will destroy your sense of well-being and weaken you physically with stress and hypertention from all the worry of carrying $265,000 in debt at age 23.

Up there in my earlier post that should be 7%, not 6%. At 6, it's only increasing by about $15K per year. At 7%, that monster amount is racking up $50 per DAY every day in interest. That side job flipping burgers -- you'd have to flip a cow a day just to run in place!

This story sounds like a hoax. Was any of it verified?

I'm with RobF.... sounds like somebody is laughing at us.

RobF/Paul --

Nope, no way to verify...

Definitely a hoax, FMF, if I am a betting man. Just because someone emailed it to you doesn't make it not a hoax. No kid could get those type of loans without a co-signer.

This is some crazy ****. How the hell can you rack up 250+ K debt going for a four year college degree.

So assuming this is legit, I don't have much advice for you (no education loans here) but I can imagine the stress and regret you're feeling. Hang in there, it's only money. The TSA suggestion above is good if you're an ex-trooper, and you do need to get a job squared a way asap.

Two blogs which are written from the perspective of people with gigantic non-mortgage debts are debtkid.com and Make Love Not Debt; the latter had six figures in school loans at one point. I think you need to get busy finding work rather than reading, but they might help with regard to some approaches and lessons learned.

That is by far the worst story I have ever heard. Reform your habits...read "It's your money or your life." Move in with the parents, drive a beater, take the bus or ride your bike...take any job you can find, multiple jobs actually. I wouldn't keep track of any of your classmates. Their lifestyle is not attainable to you for some time until you work yourself out of this mess.

I definitely feel the pain of having student loan debt, since I'm currently in the process of paying off $56,000. You know what I did? I sucked it up and moved home with my parents so that I could cut all of my costs. I will have $40,000 paid off in one year's time. That's right -- $40,000! I thought I'd be paying on these loans for 10 years or more, but I will have them paid off in a year and a half. Best decision I ever made.

Since the person who emailed this in said they used the loans to live a lavish lifestyle that they couldn't afford, it is now time to pay the piper. They need to live like they are on welfare and put every single dime to paying off their loans. It is possible to cut your debt down to a reasonable amount in a relatively short time period.

FMF and All Posters:

I am the above mentioned ex-Trooper and I appreciate the comments given by those who have taken the time to read the entire story. To answer someone's questions, I had a co-signer (my grandmother). I don't know how the debt racked up so much, but it did. All I can do now is deal with it, be responsible and learn from my mistakes. Contrary to popular belief, this is not a hoax. Believe me, I wish such was the case. I'd be a much happier man. But it isn't.

As far as my accident, I was on duty and I was hit in my patrol car. Worker's Comp is going to give me 66 2/3% of my paycheck, so I have something coming in. I also have a personal injury suit pending with an estimated 150,000-300,000 award coming my way. This is my ONLY hope for getting rid of the student debt. The drunk driver was a doctor and very rich. In a weird sort of way, getting hit by the drunk was a curse and a blessing. I have back injuries that will heal, but they're going to take some time.

I have cut back on my living substantially and believe me when I say I have learned my lesson. I know some people won't believe this story, and I don't blame them. It is such a bad lesson to learn and I made such boneheaded moves that even I can't believe my current predicament.

I thank all those who gave me advice and believe me when I say I'm grateful that there are people who understand my situation.

I was wrongfully terminated....and I'm working on a legal solution with my team as we speak. I see myself being a trooper in the future, so there is light at the end of the tunnel.

Any other questions, please feel free to ask. I will monitor this frequently.

Again, thanks to those who have commented. Please--don't judge me. I made a mistake and I'm paying for it. I'm not a bad person, I just made poor decisions.

I take responsibility for them. I always will.

Be safe all, and have a good night.

Whatever you do, don't get involved with the settlement lenders who will advance part of your PI settlement. Any good PI attorney will tell you these are bad news, but I wanted to throw that out there. Also don't forget the legal fees that will be coming out of your settlement, since most PI attorneys work off contingent fee agreements...might be has high as 40%. Oh, and subrogation...if you've had Worker's Comp pay any medical bills, usually they are paid back out of the PI settlement.

To Trooper_86:

OK, you're 23 and starting out with a huge debt. I don't think funding a ROTH is a priority. You have a moral obligation to protect your co-signer - your grandmother. Can she afford the financial bite if the lenders go after her? And they will. You have 40 years to work on retirement, she doesn't. Make sure you understand the terms of the loan(s) completely. Are they all the same? Are they true student loans? Can you go into deferment or forbearance while you are working on your legal and medical problems? Probably not. Can they be combined into one low interest loan?

This part is going to sound like "abandon all hope", but you seem to feel entitled yet. Not many doctors are as rich as it seems due to the cost of practice insurance and other factors. It is possible that you won't see much of any judgement for a long time. Or it will be in a very long annuity.

You have financial, physical and mental fitness to work on. It sounds like the physical/health part has good prospects. For the financial, the best part would be to live well below your means. Move home if you can. If not, find someplace tiny and cheap near public transit if possible. Sell as much as possible. Cancel the cable. Do the internet and get books and movies at the library. Use message boards like this one for ideas: https://boards.fool.com/Messages.asp?bid=100158. Keep it simple.

You also need to create plans B and C. What if you don't get your job back? You were on probation and probably made a mistake in judgement. What if you do and can't work on patrol (no overtime)? What will you do with your business degree and your academy training? Are you interested in fraud investigation?

Here in Michigan we had an officer get killed by a drunk when he turned his lights off at 3 am and then pulled across the 3 southbound lanes to get to the northbound side. The drunk was going over 90 and never saw him. He was acquitted.

All these questions are simply ideas of issues you might need to look at. You're right, this might have been a good wake-up call. Getting through the financial issues will be painful. Good luck to you.

Lauren

Good points about the PI settlement money. Too many people look at it as free money. It's rarely that good. Big settlements get appealed for years. The lawyers are the only ones who make out.

30K x 4 (or even 6) =|= 265

I find it really hard to believe anyone would be allowed to take out that much for undergrad, unless it was something like nursing of pharmacy, which take longer, but lead to actual jobs.

Trooper --

You may want to address how you were able to borrow so much in the first place. There seems to be some skepticism around being able to get that much in loans.

I thought $265K seemed extreme, but if you look at the total expenses for a private college, they can be as much as $80K or more per year. If the college has that as the total budgeted expenses, it is possible a private lender might accept that. He had a co-signer.

To everyone that brings up the calculation of 30*4, you get loans per semester, not per school year. You could also manage to get loans for a summer session, resulting in not just 8, but up to 12 semesters worth, though the 8 without summer sessions is obviously enough.

Annual tuition was $44K, loans had to be for living expenses as well.

While its hard to see how $30k a year could somehow add up to >$250k it could happen. First of all he did refer to "most" of the loan debt being private loans. So it sounds like he's got some other loan debt in there too. Possibly just the federal stafford loans.

Fees on private loans can be as much as 10%. So now $30k a year is $33k a year. Interest on private loans is often in the 10-15% range. Plus, unlike federal loans, that interest accumulates while you are in school. 10-15% interest adds up fast. Say he was in school for 5 calendar years (common) and he took out $30k a year. With a 10% fee and 15% interest accumulation that would leave a balance of $220k at the end of the 5 years.

Yes private student loans do suck.

Or its possible he was/is in forebearance or deferment. Which would just let the interest pile up even more.

The interest on some of these loans start from day 1. I can see where this could add a large amount to the loan by the time he's out of school and starting to pay them back

There is no way around it. Unless you could somehow get considered as a permanent and total disability (means you cannot get a replacement job in any field) then your loans could be forgiven.

Otherwise I don't really see the point in funding your retirement at this stage unless you are getting some form of employer match. If you think about it any of the money you are putting in there is money which you could have used to pay off your 10-15% rate loan. So its pretty much a wash. I'd feel much safer paying down your debt now at agressive savings, then making up for it afterwards.

Trick is see what you can comprimise to live frugal. For a LONG time. Try to find a career where salaries can improve and you can achieve higher ranks.

Most important is to stay motivated and dedicated to payoff.

I'd aim for around 40-50% of your after-tax salary to go towards repayment.

Just to clear things up, 99 percent of my loans were private loans and I borrowed the max from several different institutions. If the max was 150K from one, I went to another and started working on their max (250K). Stupid, but the truth nonetheless.

I was terminated because I was on probation--no reason was given. I was not at fault for the accident and the investigation revealed the drunk was 100 percent at fault. I was in a construction zone stationary with my lights on!

Worker's comp is owed to me and I will not have to pay that back. I was on duty. I am entitled to these benefits regardless.

Even if I make out with 150K, that's 150K I can use to substantially decrease 265K in loans to about 115K which is wayyyy more manageable than 265K.

I am living way below my means, have a rooming situation, and even have a small emergency savings account already accumulated. My credit card debt is almost down to zero. There's hope.

I have to believe that.

"I borrowed the max from several different institutions"

OK mystery solved. Its like piling up credit card debt by maxing out 20 different cards.

Your worker's comp should be tax free -- so it's like getting your full salary.

Congrats on making progress! I imagine it will feel incredible when it is all paid off! How much are the lawyers going to eat into your 150k settlement?

We started with 55k in student loans and started by consolidating them - I don't know what fixed rates you would be offered but its a good option if its lower than the variable rate you are dealing with. Some public service jobs offer some student loan forgiveness programs. Albeit the ones I looked into maxed out at 5k. I would beans and rice your budget but give yourself at least $10 a month for frivolous expenses so that you don't give up on your goal.

I would also set some intermediate goals or tackle one of the smaller balances and aim to eliminate it after all your minimums are paid so that you can feel like you are accomplishing something along the way.

Draw a picture on graph paper where each square represents $x that you color in as you pay stuff off. If you can make mulitple payments a month I would as only paying once a month kills the motivation.

If making side income won't eliminate your disability income I would check out the work at home message boards. Maybe sign up with one of the companies that let you take phone call reservations from home. My SIL makes 10k a year 20 hours a week doing this.

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