Paying off government student loans with credit card, then defaulting on card (pay, financing)
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By now, most people know that student loans don't just disappear the way an unpaid credit card does after 7 years. Has anyone ever taken care of their government student loans by paying them off with a credit card and then simply defaulting on the credit card? If so, how did it work out? I'm looking for actual cases of people who actually did this, not a debate about law and public policy.
By now, most people know that student loans don't just disappear the way an unpaid credit card does after 7 years. Has anyone ever taken care of their government student loans by paying them off with a credit card and then simply defaulting on the credit card? If so, how did it work out? I'm looking for actual cases of people who actually did this, not a debate about law and public policy.
I was using cash advances from a credit card in the '90s to make student loan payments. The total cash advances were limited to 50% of my credit limit, so that was not sustainable for very long. Then I was able to squeeze out some more student loan payments by putting necessities on my credit card until it was maxed out.
Among other points....
""Any refinancing of a qualified education loan is still considered a qualified education loan," says Mark Kantrowitz, publisher of Edvisors.com, a network of sites offering educational resources. "Thus if someone were to pay off student loans with credit cards, the credit card debt would be non-dischargeable in bankruptcy."
Among other points....
""Any refinancing of a qualified education loan is still considered a qualified education loan," says Mark Kantrowitz, publisher of Edvisors.com, a network of sites offering educational resources. "Thus if someone were to pay off student loans with credit cards, the credit card debt would be non-dischargeable in bankruptcy."
Oh really.
I did not "pay off" my student loans with credit cards, I still have a sizable student loan balance. I did not directly use credit cards to make student loan payments, I did so indirectly by taking cash advances and then using the cash to make student loan payments. Actually I probably even did that indirectly by taking advantage of the fungability of money - I used the money in my paycheck to make the student loan payments, while the cash advances allowed me to eat despite my depleted bank account.
Who is going to prevent me from discharging the (yet unpaid) credit card debt in bankruptcy?
I was using cash advances from a credit card in the '90s to make student loan payments. The total cash advances were limited to 50% of my credit limit, so that was not sustainable for very long. Then I was able to squeeze out some more student loan payments by putting necessities on my credit card until it was maxed out.
And yet, at no point did you make the decisions to use that college degree to get a good paying job.
And yet, at no point did you make the decisions to use that college degree to get a good paying job.
??? ??? ??? ??? ???
Takes two to tango, eh? I was initially rejected by the job market during the Carter recession - very little demand in the Rust Belt for liberal arts graduates at that time. By the time the Reagan Recovery caused rents to necessarily skyrocket, I was rejected by employers for lack of career-related experience.
In the absence of career-related experience, the marketable shelf life of a college degree is five years and certainly is not indefinite as some people appear to believe.
Depending on the amount of student loan debt, which is likely tens of thousands of dollars, you wouldn't have nearly that amount of credit to use to pay it all down, likely only a small percentage of it. Then you would be defaulting on both a student loan and a credit card, which would essentially wipe out your credit for a decade or so. Probably not the start you would want coming out of college as credit checks are now common among employers when considering hiring someone. So you'd have two black marks on your credit and a huge hurdle to get hired.
But as someone here already said, you could get around the rules by taking cash advances or simply transferring balances between cards.
Personally, I'd rather take a McJob and pay what I could vs. the scenario I painted above, but that's just my humble opinion.
Takes two to tango, eh? I was initially rejected by the job market during the Carter recession - very little demand in the Rust Belt for liberal arts graduates at that time. By the time the Reagan Recovery caused rents to necessarily skyrocket, I was rejected by employers for lack of career-related experience.
There's no call to blame Jimmy Carter, there's actually been very little demand for liberal arts graduates at any time since the career model of a college graduate changed from learning things like history, philosophy, and critical thinking in college and learning career skills as an apprentice to learning career skills as part of the college curriculum well over 100 years ago.
Quote:
In the absence of career-related experience, the marketable shelf life of a college degree is five years and certainly is not indefinite as some people appear to believe.
I disagree. My degree is in Finance, but I spent many years working in retail management and industrial sales before going to work in the financial services industry.
Frankly, the shelf life of a liberal arts degree is more like about five minutes unless you plan to go to work for a family business or go into business for yourself.
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