05/25/2013 01:29 pm ET Updated Dec 06, 2017

First Baby On the Way But Student Loans Are Making It Tough

Huffington Post Reader Question

My wife and I are digital artists. We both currently work and are a two income household. We have to do this to handle her student loans.

We currently have a baby on the way and in a few months my wife will give birth to our first born and will need to stop working and become a house mother to raise our child while I continue to work.

This becomes an issue because of her student loans. She went to the art institute and has all her loans with Sallie Mae. The majority are federal loans and theres a good amount of private loans as well, totaling over $50,000.

We know now that the Sallie Mae, Art Institute situation was a huge Goldman Sachs scam, regardless we still owe the money.

This will mean I will have to take over her student loan payments, and with one income, the $700 a month just to stay afloat on the interest, is really difficult to pay, and will never pay off the principle, so im basically a slave to my wifes student loans.

Is there anyway to get out of this we aren't aware of?

The currently plan is to try and consolidate the federal loans away from Sallie Mae because they are evil and unwilling to help, and try to save up to pay the private loans with then, an impossible task im sure.

But ive also learned recently of a law suit agaist them specifically with the Sallie Mae, Art Institute configuration, is there any chance of the loans for that to be forgiven?

Any help or guidance would be great as the baby is coming soon, and we are at a loss, as we are pretty sure these student loans will drown us.

I would like to keep a line of communication open as im sure i will have a lot of questions about the situation. Please help my family survive Sallie Mae.


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First off, congratulations on being a new father. Let the joy and bills begin.

I'm not exactly sure which Art Institute case you are referring to, there have actually been a lot of them and at least in federal court they appear to be against some of the individual operations and I don't know where you live.

Well the good news is while you have some private student loan debt you do have federal loans. That's good news because the federal loans offer some reduced payment solutions. You can find out about all of those here.

Just made sure you don't fall victim of one of the many student loan assistance companies that are popping up. They advertise they can help lower your student loan payments but what they really do is charge you for something you can do yourself for free.

In my opinion, the strategy that makes most sense in dealing with student loans today is if what is holding you back from making the regular payments is other debt, then file a chapter 7 bankruptcy, discharge your other debt without any tax liability and make the regular student loan payments. If you have no other debt to clear and the payments are a problem, then look at the reduced student loan payment options. However, if those are still unaffordable then investigate a chapter 13 bankruptcy to keep you out of collections and more penalties. It won't discharge the debt but it will legally give you a payment plan you can afford if the lenders refuse to.

You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.

As it stands right now, being able to get yourself in a position where you can make your regular student loan payments is better is because and student loan debt later forgiven under a reduced payment program will be potentially taxable. The debt will grow and the taxes owed could be huge later in life.

My hope is Congress will change the laws regarding student loans and bankruptcy. Up until 2005 private student loans were able to be discharged in bankruptcy. Now that they are not it only seems like an incentive to lend to anyone with a pulse since they can't be discharged.

At some point there needs to be a balance between the cost of college and the benefit. This is going to sound strange to some but I'm now of the opinion that blindly assuming everyone should go to college is no longer viable. Maybe some people should not go to college.

Nowhere in the college process is there any mechanism to talk people out of taking on student loans. It's in the best interest of the school to fill seats and society still continues to blindly believe a college education is the universal path to success.

Anyway, I'll get off of my soapbox now.

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