Deferring student loans - possible unethical loophole?

[The_Architect]

Hey, just wanted to throw this out there about something I was recently thinking about and wanted to see what the experts had to say.

A little background info is that I am paying about $750-$800 a month on my wife's student loans (she finished with about $ 85,000 in debt) and it ticks me off that we pay so much per month. I would prefer to pay $300 a month and still be paying them at age 90 because of the tax deduction and the fact that they go away when you die and nobody else is responsible for them.

Correct me if I'm wrong but when you are an active student you are allowed to defer your loans for a year, correct? So, theoretically if someone(the wife) were to enroll in one 3 credit class per year she would earn a 1 year deferment. So, if this is correct someone could just take a random class every year and defer their loans forever!?!?

Now, I realize how unethical this is but it is still intriguing...

What say you CF?

 

[AIT]

You have to be enrolled full-time. IIRC, that's at least 9 or 12 credit hours. Sorry, nice try.

 

[Wesley]

Guess your wife needs to get a job...just kidding.

Thought the interest rate on student loans was fairly low. If she went onto to graduate school, payback on loans could have been steeper. I know someone trying to pay back $160k.

 

[The_Architect]

The rates are cheap, we pay ~5%. She has a job

 

[jmb]

You have to be enrolled full-time. IIRC, that's at least 9 or 12 credit hours. Sorry, nice try.

I don't think this is accurate, but I know there is some minimum threshold of coursework required.

 

[CloneAggie]

You have to be enrolled full-time. IIRC, that's at least 9 or 12 credit hours. Sorry, nice try.

I believe you only have to be enrolled part time, but it may depend on who the loan is through or how old the loan is (it is this way for federal loans). Also, if the loans were unsubsidized, then interest will continue to accrue on them. I'm still deferring some loans from my undergrad at ISU from 1997 (going back to school a couple times).

 

[4VR4CY]

I was PT Grad school (6 credits) last year and mine were deferred. What payment plan is she on? You could do extended and pay less....

 

[cyco2000]

From my understanding, you can defer the loans now, but interest still accrues.

We had a guy in our office do that with his loans after he got a job, and the lady said he could do that indefinitely. He wanted to get a nice car, and couldn't afford car payments and school loan payments. Nice plan.

 

[mplscyclone]

You have to be enrolled at least half time to defer student loans... For most schools that means 6 credits

 

[matmann22]

From my understanding, you can defer the loans now, but interest still accrues.

We had a guy in our office do that with his loans after he got a job, and the lady said he could do that indefinitely. He wanted to get a nice car, and couldn't afford car payments and school loan payments. Nice plan.

'Nice' plan if you want to be in debt or bankrupt all your life...

 

[CyGuy33]

Try having the Dr.'s student loans, it's not fun.

 

[The_Architect]

I was PT Grad school (6 credits) last year and mine were deferred. What payment plan is she on? You could do extended and pay less....

I think off the top of my head its a graduated plan which is why it seems to keep going up. The thing is that we can afford the payments, but I'd rather be putting more money into non tax defer able debt(credit cards, cars, etc). Looking into alternative payment plans is on my list of things to-do.

 

[ClonedOne]

Another problem that might depend on the loan but mine did not reset each time you start school. I dropped out for a year so I used up my deferment time on one of my loans and when I graduated I had to start paying on it right away.

 

[AIT]

I believe you only have to be enrolled part time, but it may depend on who the loan is through or how old the loan is (it is this way for federal loans). Also, if the loans were unsubsidized, then interest will continue to accrue on them. I'm still deferring some loans from my undergrad at ISU from 1997 (going back to school a couple times).

My mistake. I thought it was a higher threshold than that. For six credit hours, it's almost worth it to keep deferring them indefinitely.

 

[The_Architect]

My mistake. I thought it was a higher threshold than that. For six credit hours, it's almost worth it to keep deferring them indefinitely.

I agree although I don't think my conscience would let me do it.

 

[ajk4st8]

7 years private school.

4 Wartburg undergrad
3 St. Ambrose graduate

My parents paid for a lot of it and I still have a sickening amount.

 

[Phaedrus]

"The debtor is slave to the lender". By buying into a lifetime of debt, you are volunteering to be a slave.

Think about it. You now have to work your butt off the rest of your life, so you can have "things" that you will eventually come to hate.

Each and every one of the dollars you make for income will become worth less and less the more years go by, and the older you get.

My opinion? Start working your butt off and pay back the debt. You'll feel better, later. The plan you describe is a sure fire way to lose with money.

 

[4VR4CY]

My parents paid none of mine and I have undergrad and 1 year of grad... now going on my 2nd year of grad. This year they are not giving me any subsidized loans. So, I just e-mailed financial aid to see if a "life change" would change my financial aid. Now, I just have to print everything out and get it sent in.

I also am wondering if unsubsidized loans would be a good thing to take out and pay off my Iowa Student Loans? I'm not a huge fan of Iowa Student Loan, but needed them as an undergraduate (parents made too much $ for a lot of fed loans). So, if anyone knows the answer to that question, let me know!!!!!!!

 

[The_Architect]

"The debtor is slave to the lender". By buying into a lifetime of debt, you are volunteering to be a slave.

Think about it. You now have to work your butt off the rest of your life, so you can have "things" that you will eventually come to hate.

Each and every one of the dollars you make for income will become worth less and less the more years go by, and the older you get.

My opinion? Start working your butt off and pay back the debt. You'll feel better, later. The plan you describe is a sure fire way to lose with money.

Normally I would completely agree but...

The whole idea is that paying such a small amount on those the tradeoff is worth it because they disapear when you die and nobody else is responsible for them...

 

[Irresponsible]

Now, I realize how unethical this is but it is still intriguing...

What say you CF?

If you are going to steal money from me (and other taxpayers), at least have the courtesy to not tell us about it.

I understand the point of the thread, but since you admit it's unethical, why are you pursuing it further?