I need financial advice!
Okay, here is my story. I have about 60k in student loan debt becuase I got my BA from a private university (big mistake #1). 20k of that is federal loans, which is not the problem. 40k is in private loans (big mistake #2), which are becoming the problem. The company the private loans are through are terrible. Part of the problem is that I can only get in-school deferrment while I'm paying the interest off first (I would like to go back for a masters, am working in social work and making little money). The private loan company has been sending me payment schedules for the last 4 years, since I graduated. They all said I would be paying the interest only until 2008, then my payments would start going up very steeply (at the end of the loan, they are almost $800/month). Well, I had always planned to go back to school before 2008 and hopefully make more money to make the loan payments. So, here's the problem; I received another loan repayment schedule this month that says my payments go up (and am done with interest) next year, oct. 06. I call them and they basically say "too bad, we were wrong for the last 4 years, your payments go higher next year".
So, now, I am basically screwed, starting next year I will have $500/month in loan payments (which I can possibly pay but will just keep going higher), I can't ever go back to school unless I plan on working full time to keep making the payments, and nobody will refinance/consolidate the 40k because I have no assests. I think I can declare bankruptcy on the 40k because it is a private loan, not federal, but I hate to ruin my credit when I have no other debt but this. I feel totally stuck. Anyone have any advice? Should I go for bankruptcy, or just do what I can to try and pay the loan (at least till I can get it down and maybe try to reconsolidate later)? Basically, if I were able to pay it off on time it would be paid off in 2014, although I think I end up homeless if I try to make the payments. :(
any advice from you financial wizards would be appreciated.