View Full Version : Student Loans and Long Distance Hiking
TippyTumbles
12-11-2011, 20:15
So I'm looking to thru-hike in most likely 2014. I graduate in May 2013, and hope to work and plod away at paying off all those loans while also saving for the trail for not quite a year before hitting the trail... but then what to do about paying off loans while on the trail? I don't have a car payment and hopefully not any other bills to worry about while hiking, so it's really just the loans I'll have to worry about as far as outside expenses go.
So I guess my question is... those of you who have thru-hiked with student loans hanging over your head, do you save before hand so you can continue making the minimum monthly payment while on trail? Are there loopholes for getting loans deferred for 6 months or so? Any other advice would be appreciated!
Thanks!
bmwsmity
12-11-2011, 20:54
A friend of mine had hers deferred for "financial hardship" when she did a student teaching gig in Chile for 6 months. Most student loan banks are pretty easy-going about deferments as long as you don't exceed the cumulative number of max months you can defer over the life of the loan.
Go to the US Marine Corps recruiting office, sign up for the six month delayed entry program. Mail a coy of your enlistment papers to the student loan place and apply for a military deferment.
I'm pretty sure you can autopay while you're on the trail. You set up a monthly amount for your loans and it automatically takes money from your account and pays them for you. Also talking to the loan people often works, they're usually willing to give you slack in most cases. They're surprisingly understanding in my experience.
ChinMusic
12-12-2011, 10:50
Go to the US Marine Corps recruiting office, sign up for the six month delayed entry program. Mail a coy of your enlistment papers to the student loan place and apply for a military deferment.
Excellent.
Hardship for a walking vacation? Pallleeeeeze.
silverscuba22
12-12-2011, 11:44
tippy, it is easy to set up an auto pay while on the trail. Most students loans have a 3 to 6 month period after you graduate (at least mine did) before you are required to pay.
You can defer your loans for 6 months, usually with no issue. This can typically only be done once without question, in addition to the standard 6 month deferment right after college, and the loan companies really don't mind at all because it makes them more $$$ in the end. At least, that's how it was 5-10 years ago. Loan companies know how much money college students make right out of college, so this is typically nothing new to them.
That said, if things have changed and the loan company doesn't want to give you a second deferment, ask them to defer your 6 month deferment till the following year. It's worth asking.
My guess though is that it won't be a problem. It's pretty standard that they give a second deferment, since it makes them more money. Getting a third deferment though is a lot less easy.
Odd Man Out
12-12-2011, 12:28
tippy, it is easy to set up an auto pay while on the trail. Most students loans have a 3 to 6 month period after you graduate (at least mine did) before you are required to pay.
Correct on both counts. I should know as I have just had my kids graduate from college and I am paying their loans (autopay, 6 months til first payment due).
skinewmexico
12-12-2011, 18:14
It's criminal that you can't work your way thru college without loans any more.
ChinMusic
12-12-2011, 18:18
It's criminal that you can't work your way thru college without loans any more.
Both my kids are guilty, except for the "work" part.......
blackbird04217
12-12-2011, 21:28
DO NOT DEFER YOUR LOANS if you can at all help it.
DO NOT DEFER YOUR LOANS if you can at all help it.
DO NOT DEFER YOUR LOANS if you can at all help it.
DO NOT DEFER YOUR LOANS if you can at all help it.
DO NOT DEFER YOUR LOANS if you can at all help it.
Honestly, save up enough and auto pay at the VERY least the minimal amount, better for a bit extra. Deferring your loans is useful for the bank to make back a whole lot more money than initially. For me it would have cost nearly $5000 extra [long term] to defer my loans. That said, it would probably be worth doing so if it were the only way to fund your adventure. I just feel too many people are being "defer them" without pointing out the fact that deferring it costs a lot longer in the long term due to the interest that continues to accrue.
CornerCreek27
12-13-2011, 01:16
i agree with blackbird, any deferment on my loans would have resulted in higher amounts of interest in the end. I payed my loans out hard for the first year out of school and now have been saving to make the $50 minimum payment while i'll be on the trail
blackbird04217
12-14-2011, 01:13
I sure do envy YOUR minimum payment!
As already mentioned you can definitely set up an automatic payment via your loanholder's website. Although almost ready to retire I still have grad school loans that I'm paying. This is partially because I got a forebearance on them a few times. Mine are directly through the government and I was able to pay a lesser sum for up to a year at a time. If you can pay the minimum amount I also suggest doing that since no extra interest will accrue. I'll be doing that the same year as you, 2014 when I'll be back on the AT attempting a thruhike.
blackbird04217
12-14-2011, 14:45
On the topic of setting up automatic payments; in my experiences, this _can_ lower your interest rate, in my case it lowered it by 0.25% and saves me thousands in the long run. Just make sure the money is in the bank when it grabs it, no problems.
MuddyWaters
12-14-2011, 23:11
Pay off your student loans with credit cards.
Declare bankruptcy and go hike debt free.
bmwsmity
12-15-2011, 08:30
Well of course, long term deferment is a bad idea, because the interest you would be paying for each month gets tacked onto the end of the loan.
Of course, you're still able to pay on the loan during deferment, so you could set up auto bill pay with your bank and pay the interest alone for each month you'll be away (the bank just sends the money to the loan company)... This would be the most prudent option IMO, but I doubt six months of interest is going to be financially devastating ;)
MuddyWaters
12-15-2011, 10:00
It's criminal that you can't work your way thru college without loans any more.
Actually, it is.
College costs skyrocketed 10x over the past 20 yrs because banks began lending to anybody with a pulse. They did it because they got legislation passed that student loans DO NOT get discharged in bankruptcy. So it is RISK FREE lending for them, which made money too easily available. Colleges jacked their tuition and fees, paid teachers extravagant salaries, built unneeded facilities.
And the students who were foolish enough to borrow more than they can pay back, will never be able to pay it back, or afford to be able to save any money. Education majors graduating with $150,000 debt is absurd. I have a friend , PhD chemist, both he and his wife, together their student loans are $250,000. They barely get by.
It was predatory lending, pure and simple, that created the problem. Just like the housing problems, etc.
ChinMusic
12-15-2011, 10:52
Actually, it is.
College costs skyrocketed 10x over the past 20 yrs because banks began lending to anybody with a pulse. They did it because they got legislation passed that student loans DO NOT get discharged in bankruptcy. So it is RISK FREE lending for them, which made money too easily available. Colleges jacked their tuition and fees, paid teachers extravagant salaries, built unneeded facilities.
And the students who were foolish enough to borrow more than they can pay back, will never be able to pay it back, or afford to be able to save any money. Education majors graduating with $150,000 debt is absurd. I have a friend , PhD chemist, both he and his wife, together their student loans are $250,000. They barely get by.
This.
Been saying this for years and years. The more you subsidize the more you inflate. It is EXACTLY like the housing bubble. This one is gonna be ugly too.
BoiledPeanut
12-15-2011, 11:52
Pay off your student loans with credit cards.
Declare bankruptcy and go hike debt free.
"I am intrigued by your ideas and would like to subscribe to your newsletter" Homer Simpson
Odd Man Out
12-15-2011, 13:04
College costs skyrocketed 10x over the past 20 yrs because banks began lending to anybody with a pulse. They did it because they got legislation passed that student loans DO NOT get discharged in bankruptcy. So it is RISK FREE lending for them, which made money too easily available. Colleges jacked their tuition and fees, paid teachers extravagant salaries, built unneeded facilities.
You muddied the waters a bit by not telling the whole story. I'm not saying that the student debt crisis isn't a problem. But a major contributing factor to the increase in the cost of education is the decline in taxpayer support.
At our local University, tuition has gone up about 2x in 10 years (8% per year) - more than inflation, but not nearly at the 10X/20 years (17% per year) suggested above. But in those ten years, the the cost of educating a student only went up at a rate of about 4% per year (hardly "extravagant", i my opinion). So what accounts for the increase in tuition? Mostly it was due to the fact that in that time, state funding for our "state" university has dropped from 38% of our total budget to 17% of our total budget.
The reality is that very few students EVER paid for their whole college education by working their way through college (although many would like to think so).
Most students who go to private schools have some (even most) of the cost of their education paid by financial aid funded from the schools endowment. (note, I do not count academic scholarships as financial aid here as scholarships are earned).
Most students go to public school, and NONE of them pay for everything. Even if they don't get financial aid, they benefit from the fact that the base cost of their education was discounted due to support the school gets from from taxpayers.
Actually, it is.
College costs skyrocketed 10x over the past 20 yrs because banks began lending to anybody with a pulse. They did it because they got legislation passed that student loans DO NOT get discharged in bankruptcy. So it is RISK FREE lending for them, which made money too easily available. Colleges jacked their tuition and fees, paid teachers extravagant salaries, built unneeded facilities.
And the students who were foolish enough to borrow more than they can pay back, will never be able to pay it back, or afford to be able to save any money. Education majors graduating with $150,000 debt is absurd. I have a friend , PhD chemist, both he and his wife, together their student loans are $250,000. They barely get by.
It was predatory lending, pure and simple, that created the problem. Just like the housing problems, etc. Thank your congress that was bought and paid for buy business interests. Better yet, vote them out.
the student loan bubble is going to pop in a few years, i saw a rerport that now close to 25% of thepeople pay back students loans are at least 1 payment behind, and it could get really bad, becuase most of these kids had loans co-signed, so its still mom and pops on the hook.
Only thing i disagree with you on is the "predatory lending" there are "cheaper" was to go to college, that 95% kids just dont want to do them. community college is a MUCH cheaper way to go, live at home for a few more years, go to a near by 4 year and live at home, work ( while i understand some do, most college students do not, most of the ones that do work just enough to buy their beer lol) parents need to be smart enough to explain to there kids about students loans and how they will have to repay them, and i think THATS the big problem. its coming to a point that anytime someone cant pay off a loan it was "predatory lending" when in reality it was a bad choice by the person taking out the loan to start with, your a school teacher making 50k a year ? yea you should buy a 300k house. what you are living paycheck to paycheck? maybe you shouldnt buy that 50k car. PEOPLE need to be smarter.
Alligator
12-15-2011, 14:13
The OP was more interested in how to make payments on the loans. The issue of taking out student loans is a bit of thread drift-not a big issue but please keep the politics out of it.
Thank you.
Yeah, it's no big deal deferring loans, but keep in mind that the interest is still building up, so you pay more in the long run. It's best have enough in the bank to continue paying the loans while hiking. Really, the best option is to pay off your loans and then hike so you don't have to worry about it :) I paid off $20,000 in student loans in my first 2 years out of college by living poor as a church mouse. But now I'm debt free and was able to hike without money worries.
Just sayin'.
double d
02-14-2012, 09:17
Its a good question regarding student loans and a long distance hike. I would suggest to make basic monthly payments, such as $25-50 a month, just so you will not have capitalized interest each month during your hike (interest added to interest of a loan).
Not Sunshine
02-14-2012, 11:17
Just be careful that your loan is still through the government. You typically do get a grace period after graduation if it's through the government. If you already consolidated with a private bank, my experience is you DO NOT get that grace period. The month after you graduate, you're next payment is due - whether you get a statement or not. Late fees add up quickly. Good luck on your hike. SOBO, then, yes?? Start in May/June, end in fall?
You could try the old fashioned way ....start your career, pay off your debts, save up, then go on the hike with a clear conscience and without the specter of a looming debt hanging over your head when you’re done. Your young and have your whole life in front of you, try not to start it in a downward spiral.
trippclark
02-14-2012, 13:49
>>>> edit <<<<<
trippclark
02-14-2012, 13:51
It's criminal that you can't work your way thru college without loans any more.
And it is also not true.
Feral Bill
02-14-2012, 14:06
And it is also not true.
Its not true for everybody, but many, if not most, need loans. And yes, its a good idea to minimize debts and pay off loans ASAP.
blackbird04217
02-14-2012, 14:10
You could try the old fashioned way ....start your career, pay off your debts, save up, then go on the hike with a clear conscience and without the specter of a looming debt hanging over your head when you’re done. Your young and have your whole life in front of you, try not to start it in a downward spiral.
Or you could just get a job, keep a savings account, and when it holds enough money to make payments for a year FOR you, as well as other hiking costs, go. This is what I did. No reason to wait until your retired or 20 years in the future when the loans are paid off. And with a minimum of $50mo, it shouldn't take TOO long to save. (My minimum was $570mo when I went for my hike). I 'simply' saved $6000 to cover the loans, and determined that untouchable while hiking.
That said, failing the ability to save up to pay your loans, BFI's point is better in the long term than deferring them.