At first glance, it seems like a no-brainer; all of our credit card debt is held at ridiculously high interest rates, and the expensive payments keep us living paycheck to paycheck and make it impossible to save. The student loan interest rate is fixed, there are income-based repayment plans, and they offer generous forbearance options (at least compared to the credit card companies). The only downside to this plan that I can see is that student loan debt cannot be discharged in bankruptcy. The credit card debt is our only debt (other than my student loans from undergrad), we don't have kids or a house, and I don't see us declaring bankruptcy anytime soon. I know this is just borrowing from Peter to pay Paul and won't solve our long-term financial issues, but when Peter offers great terms and Paul takes 1/3 of your money every month, it's hard to resist.
What else am I not considering? Have you done this and did it work out? I acknowledge that this might be against the precise letter of the law of my student loan terms, but for argument's sake let's assume I'm ethically OK with using my loan funds for slightly off-label purposes as long as the funds are still used responsibly (no lavish spring break trips or coke binges).
Bonus question - how does an RA/TA stipend generally count against expected family contribution for financial aid purposes? I'm assuming it doesn't affect this year's aid offer, but that all that taxable income will increase my EFC next year - please let me know if that isn't how it worked for you.
posted by anonymous to work & money (11 answers total) 3 users marked this as a favorite?
Source: http://ask.metafilter.com/245700/Using-student-loans-to-pay-credit-card-debt-grad-school-edition
fisker karma super tuesday states shepard fairey is snooki pregnant snooki pregnant gbc hedy lamarr
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.