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Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 10:22 pm
by ThurstonHowell
Hi there,
I've applied for the 11-12 cycle and am beginning to look into loans/financing my education.
Is it possible to pay off my 3K credit card debt with student loans? Will the student loans carry a lower interest rate than my credit cards (10 - 18%, variable)?
Thanks!
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 10:29 pm
by BeenDidThat
ThurstonHowell wrote:Hi there,
I've applied for the 11-12 cycle and am beginning to look into loans/financing my education.
Is it possible to pay off my 3K credit card debt with student loans? Will the student loans carry a lower interest rate than my credit cards (10 - 18%, variable)?
Thanks!
I don't believe it's legal.
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 10:29 pm
by 071816
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Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 10:30 pm
by NoleinNY
chimp wrote:--ImageRemoved--
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 10:33 pm
by JustE
Anything's possible. However, it's not legal.
Can't give you much more advice than that.
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 10:41 pm
by Ty Webb
JustE wrote: Anything's possible. However, it's not legal.
Can't give you much more advice than that.
Well you guys would make shitty lawyers.
OP: It's true that using federal student loans to pay off other debt is not legal. But if you have $3k in money/savings/whatever, there's nothing stopping you from using that money to pay off your debt and using federal cost of living allowances to replenish your savings.
And yes, the rate on student loans is lower. Credit cards are unsecured bullshit, though. Student loans are secured...with your life.
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 10:53 pm
by JustE
Ty Webb wrote:JustE wrote: Anything's possible. However, it's not legal.
Can't give you much more advice than that.
Well you guys would make shitty lawyers.
OP: It's true that using federal student loans to pay off other debt is not legal. But if you have $3k in money/savings/whatever, there's nothing stopping you from using that money to pay off your debt and using federal cost of living allowances to replenish your savings.
And yes, the rate on student loans is lower. Credit cards are unsecured bullshit, though. Student loans are secured...with your life.
Shitty lawyers, eh? Thanks. I'll keep that in mind.
Great advice.
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 10:58 pm
by ThurstonHowell
But wouldn't spending that 3K COL cut deeply into my living expenses? How much does the gov typically provide for COL?
What about private education loans -- do they carry a lower rate than credit cards typically charge? Can I simply request an additional 3K in private loans and use that extra for the credit card?
Thanks!
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 11:00 pm
by joemoviebuff
Get another credit card with a 0% introductory rate on balance transfers, transfer the balance, and work for the year before school to pay it off.
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 11:05 pm
by JustE
joemoviebuff wrote:Get another credit card with a 0% introductory rate on balance transfers, transfer the balance, and work for the year before school to pay it off.
Finally, an answer that doesn't involve using student loans.
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 11:06 pm
by bk1
ThurstonHowell wrote:How much does the gov typically provide for COL?
CoL depends on the school. Look at a school's fin aid website and you will see how much they allot for CoL. At some schools it is a lot higher than necessary, depending on how you choose to live.
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 11:12 pm
by Geist13
OP, I live in a metro area that has, I think 5 million (to give an idea of COL). My school allows between 12-13K for 12 months. This includes books, rent, food, everything. 3K immediately out of that is a lot. Now, I could still make that amount of money work over the course of 12 months, cause I'm a stingy bastard. You however are already 3K in the hole, so I'm guessing you wouldn't be able to stretch 10K out over an entire year.
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 11:31 pm
by FlanAl
wait if you can't pay off your credit card then how do you use a credit card in law school? do you have to wait to pay it off until you get an SA and make money? Pretty confused since it seems like paying for books etc. with like an amazon credit card to get points or whatever and then paying that card off with your loans doesn't seem illegal. Is this only for pre-existing debt?
Re: Using student loans to pay credit card debt
Posted: Tue Dec 13, 2011 11:43 pm
by cinephile
ThurstonHowell wrote:But wouldn't spending that 3K COL cut deeply into my living expenses? How much does the gov typically provide for COL?
We get 20k a year. I thought I wouldn't spend the full 10k this semester, but I was wrong. Hopefully next semester will be different.
Re: Using student loans to pay credit card debt
Posted: Wed Dec 14, 2011 7:47 am
by JustE
FlanAl wrote:wait if you can't pay off your credit card then how do you use a credit card in law school? do you have to wait to pay it off until you get an SA and make money? Pretty confused since it seems like paying for books etc. with like an amazon credit card to get points or whatever and then paying that card off with your loans doesn't seem illegal. Is this only for pre-existing debt?
It's fine to pay off a credit card with edu loan money, as long as the card purchases were for educational expenses. If you created the card balance before school, then you can't (legally).
Bottom line, no one is really going to know either way. I'm sure people do this all the time and get by just fine. However, I think it's a bad idea to drop $3k as soon as you get it. Unless you're good at sticking to a budget and know you can survive on what's left, I'd pay this off some other way.
Re: Using student loans to pay credit card debt
Posted: Tue Jul 02, 2013 7:02 pm
by MPLaw-yerr
A little late to the party, but did you ever think about paying off your credit card debt w/
zero interest credit cards? If you have decent enough credit you can transfer your balance to a card that has no interest during the intro period on balance transfers.
Just a thought. Oh, and it's totally legal. (And encouraged.)
Re: Using student loans to pay credit card debt
Posted: Tue Jul 02, 2013 7:10 pm
by superbloom
MPLaw-yerr wrote:A little late to the party, but did you ever think about paying off your credit card debt w/ zero interest credit cards? If you have decent enough credit you can transfer your balance to a card that has no interest during the intro period on balance transfers.
Just a thought. Oh, and it's totally legal. (And encouraged.)
Someone beat you to it by two years.
