I got my student loan debt reduction information back today! I applied for it about 3 weeks ago and I phoned today to find out the status of it and I got approved! They reduced the amount by over $4000!! YAYYYYY!! I only owe a remaining $718 on it. If I had that full amount I would probably pay it all off in one lump sum. In fact, I'm thinking if I do come across some extra money over the next while I might put it towards my loan.

Another good thing (and this is where the question comes in) is that they reduced the payments by $44 down to $25. While I'm thrilled they did that it's going to be over 2 years before it's paid off completely like that. I'm considering asking them to raise the payment amount to at least $50 maybe even back up to the $64 it was which would have it paid off in full in less than a year.

I figure I've been managing that amount up until now so I could manage it for another year. I guess I'm in doubt a little simply because I worry that if I raise it then something happens that I have problems making that payment then I'll be stuck...but I guess I could always ask them to lower the payment again?

What would you do if it was you?

By Vicki on Thursday, March 2, 2006 - 03:15 pm:

I would leave it as is and if you can afford to, send extra in every month. Or start putting the "extra" into a savings account to build up a little reserve. The interest rate has got to be pretty low, and with that amount, it isn't going to amount to much anyway.

By Juli4 on Thursday, March 2, 2006 - 03:16 pm:

Don't ask them to make the payment higher just pay the higher amount. I mean they will accept it. They are not going to turn down your money. Then you don't have the headache of changing the payment. And if one month you can't make the higher payment then you don't have to.

By Missbookworm on Thursday, March 2, 2006 - 03:21 pm:

I was kinda thinking about it that way. I have to phone them and ask if I make a higher payment one month how I submit it to them because my payment comes directly out of my account every month. I think putting the extra into savings is what I'm going to do Vicki that way I have some money to fall back on if I need it. Then if I have a big chunk in a few months or whatever to pay on it then I can do that.

By Ginny~moderator on Thursday, March 2, 2006 - 03:34 pm:

Catherin, even if you get a big chunk, the interest rate is probably pretty low and won't amount to a hill of beans. Put your extra money in savings. It is very hard for a single parent to build up any savings, and it is so important to have an emergency fund if/when you need it. I know ING pays a pretty good rate of interest (much better than most banks I know of), is FDIC insured, and you can get your money transferred to your bank in the U.S. in 2 business days. I assume they will accept Canadian depositors. Check the website - ING Direct.

By Ginny~moderator on Thursday, March 2, 2006 - 03:36 pm:

And I wouldn't rock the boat by asking them to raise the payment amount or about what happens if you make a larger payment one month. You don't want anyone to wonder if you were really entitled to the reduction, if it was based on need / circumstances.

By Reds9298 on Thursday, March 2, 2006 - 04:52 pm:

Leave it as is and pay extra on it when you want to. That's what I have done with mine.

By Pamt on Thursday, March 2, 2006 - 05:19 pm:

Great news! And ditto the others---keep the payment the same, but pretend it's $50/month and you'll have it paid off in no time!

By Missbookworm on Thursday, March 2, 2006 - 05:33 pm:

This is really good advice I'm going to leave it as it is and work on sorting out some of the smaller things I owe money on with the "extra" money I'll now have.

Ginny I sure wish I could have a bank account to save money in. I can't Being that I'm on income assistance right now if I put any money into a savings account and they find out about it they'll make me live off it and of course if I don't tell them about it, it's considered fraud. The best I can do is keep money at home somewhere if I have anything extra to put away.