Student Loans - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

AFireInside · 01-08-2009, 01:33 AM

Well, with the elimination of my credit card or the majority of my credit card debt next week, it looks like I may be in a position to really start putting more than the minimum amount of money on my student loans.

I have two, (Alberta, and Federal), the federal is in the range of about 20,000, and the Alberta is in less than 1000 (I'm sure I can eliminate that within a couple months as well) with the Alberta loan gone, and the credit card gone, I could probably put another 100 - 200 on the federal loan. *Note: I think interest on federal student loans is about 6% right now.

Just curious on how people here have payed down their loans.

Some say its best to pay the minimum on student loans, and put extra money in an RRSP or possibly the new tax free savings account. From what I understand the interest paid on a student loan is tax deductible, (up to a point I'm sure), so this is why some say pay the minimum, and get the tax credits. To be honest I don't know a whole lot about any of this, so I'm just curious, what people here think the best option is. I feel like just getting rid of this student loan because I hate having it over my head. Of course I realize this is most likely not the best course of action overall.

I've been out of school for about a year and a half, so I believe I still have a lot of tax credits from when was going to school that I will be able to claim for this year, so I expect a rather large tax return (which I was planning on just putting on my student loans).

Any opinions?

I'm thinking a good plan would be to put savings in an RRSP and take the tax return each year and put it on the student loans? Problem is that that whole time I accrue interest on the fed student loan.

Should also note, I'm thinking RRSP may be better as well, because the gf and I are looking to buy a house within the next couple years. (The RRSP can be pulled out without being taxed for a first time home buyer. Of course this has to be repayed within a certain time frame as well.)

RougeUnderoos · 01-08-2009, 02:41 AM

I was able to apply for a "loan remission" about 5 years ago.

It's all kind of foggy to me now, but far as I remember, the only qualifications were that I had to have received my degree and had been paying my federal loans faithfully for two years.

I filled out a couple forms, sent them off, and then a month later I received a letter saying "we've taken six grand off your loans, and your new balance is X". That was about 20% of the total at the time, so it was a hell of a deal.

No explanation, no nothing. They lopped off 6 g's. I don't know why and I don't care.

That "program" might not exist anymore but it's worth looking into.

AFireInside · 01-08-2009, 02:45 AM

I think these days, you need to make below a certain amount per month. Unfortunately the amount they've chosen is pretty much impossible to live off of in this city..

Nancy · 01-08-2009, 07:23 AM

Did they have Loan Remission in Alberta? They had this in BC, but not in Saskatchewan. In my day, there was no remission program on the federal portion of loans.

COGENT · 01-08-2009, 08:38 AM

After I got my degree the government sent me letter informing me that they have forgiven nearly 40% of my student loan! I wonder if they are doing this now rather than the loan remission program?

This was 2.5 years ago.

Ronald Pagan · 01-08-2009, 08:48 AM

http://www.getrichslowly.org/blog/20...out-of-debt-2/

ok, ok,....I get it · 01-08-2009, 09:17 AM

Quote:

Originally Posted by AFireInside

Just curious on how people here have payed down their loans.

working like a new canadian

cKy · 01-08-2009, 09:25 AM

I never paid my student loans (both Fed and Prov) for years and they went to collections. The collections guy from Total Credit Recovery was awesome, and wasnt pushy or anything. He is the nicest professional person I have dealt with when it came to collection companies.

I dont know how it works if your loans havent been sent to collections, but he told me that you only need to pay what works for you. There is no set minimum or maximum.

I finally paid off my $30,000 (ish) loans in under 7 years after ignoring them for 2 years (Brutal interest on that).

My word of advice, stick with a payment plan that wont screw you, and is more then the interest, it's all you can really do. Plus all your income tax and GST checks goto them anyways :P

vanisleflamesfan · 01-08-2009, 09:27 AM

I am a few years ahead of where you are, but I had a similar situation (although with a larger student loan debt).

You already mentioned paying off credit cards first, that is a no-brainer.

I found that it helped to make a spreadsheet with all of the individual loans layed out with prinicple, monthly interest and payments. This way, you can run several scenarios quickly as to how to pay it off most effectively. I actually had four student loan accounts because I am old and had loans under the old system and the new system so it was, perhaps, a bit more confusing for me than for you with only two, but nonetheless... You may find it is best to pay off the smallest one first (assuming that the rates of interest are similar) and then roll that payment onto the next one (the debt snowball technique that someone already posted).

The big thing is the tax credits. Yes the money you pay is tax deductible, and yes, you should have some tuition credit left over. So pay as much as you can now, to maximize the tax rebates and then slap these down on the debt. Don't worry so much about RRSP contibutions right now because getting out of debt quicker will be more beneficial in the long run, as long as you still have those two tax shields (tuition and loan payments).

mykalberta · 01-08-2009, 09:42 AM

+1 to vanisleflamesfan

I had 4 loans as well (2*RBC, 1*AB, 1*CDN)

My Canada student loan is the only one I have left, its too bad they are the absolute worse to deal with. They take money out early, take money out late, one month they took 4 payments out.

I only have 2K left on that one so it will be paid off in April/May. Then (apart from mortgage) I will be debt free

cSpooge · 01-08-2009, 10:23 AM

Quote:

Originally Posted by cKy

I never paid my student loans (both Fed and Prov) for years and they went to collections. The collections guy from Total Credit Recovery was awesome, and wasnt pushy or anything. He is the nicest professional person I have dealt with when it came to collection companies.

I dont know how it works if your loans havent been sent to collections, but he told me that you only need to pay what works for you. There is no set minimum or maximum.

I finally paid off my $30,000 (ish) loans in under 7 years after ignoring them for 2 years (Brutal interest on that).

My word of advice, stick with a payment plan that wont screw you, and is more then the interest, it's all you can really do. Plus all your income tax and GST checks goto them anyways :P

this only happens if you are not making minimum payments with CSL. If you're making payments then won't sent a trigger to CRA for this to happen.

Stillman16 · 01-08-2009, 10:33 AM

Quote:

Originally Posted by mykalberta

+1 to vanisleflamesfan

I had 4 loans as well (2*RBC, 1*AB, 1*CDN)

My Canada student loan is the only one I have left, its too bad they are the absolute worse to deal with. They take money out early, take money out late, one month they took 4 payments out.

I only have 2K left on that one so it will be paid off in April/May. Then (apart from mortgage) I will be debt free

I had the same loan set up (4). I didn't give the loan holders access to my account, instead I just paid the loans myself each month with the account numbers they told me to pay to (used internet banking).

CaptainCrunch · 01-08-2009, 10:47 AM

I had half of my loan forgiven when I went to negotiate it after I graduated before I had to start making payments, but that was back in the early 90's. I paid that thing off in two years, literally starving myself to do it just so I wouldn't carry a debt.

AFireInside · 01-08-2009, 10:12 PM

I think I'm going to just pay it down as fast as humanly possible.
I don't think there is any kind of loan forgiveness these days... The only way to get part of your loan taken off (at least the federal portion) is to apply and receive relief something like 5 times. This means you have to be making no money. I think the last time I checked if you make more than 1700 gross per month you don't apply for relief.

Shazam · 01-08-2009, 11:50 PM

I got loan remission from the provincial gov't right after I graduated. No application, no nothing. I just got a letter saying that they lopped off 30% of my principal.

Klein bought my vote forever with that.

FireFly · 01-09-2009, 12:00 AM

Quote:

Originally Posted by Shazam

I got loan remission from the provincial gov't right after I graduated. No application, no nothing. I just got a letter saying that they lopped off 30% of my principal.

Klein bought my vote forever with that.

Same here. They wiped out my Alberta loan, (all but $250 I think) and just left me with the federal loan.

AFireInside · 01-09-2009, 07:09 AM

Quote:

Originally Posted by Shazam

I got loan remission from the provincial gov't right after I graduated. No application, no nothing. I just got a letter saying that they lopped off 30% of my principal.

Klein bought my vote forever with that.

Yeah I should have said that Alberta was great, the majority of my loan got cut off. Much more than 30% if remember correctly.

Federal gov't did not take off a single cent.

peter12 · 01-09-2009, 09:48 AM

My only crowning achievement as a young person has been to finish my undergrad with no student debt whatsoever.

Ronald Pagan · 01-09-2009, 09:57 AM

12 heroin beers in one night trumps that.

Ozy_Flame · 01-09-2009, 09:57 AM

Quote:

Originally Posted by peter12

My only crowning achievement as a young person has been to finish my undergrad with no student debt whatsoever.

Me too! What a relief.