My mother has received a significant amount of money from an inheritance trust. She would like to help me pay off some of my student loan debt.
What would be the best way for her to go about doing this? Would she be able to pay the loan companies directly without having to give the money to me? Her concern is any taxes that she would have to pay due to giving me the money directly as a gift.
Would I need to pay taxes on the money? What if it is given to the loan company directly?
Any advice would be greatly appreciated. BTW, we live in California.
Wed Feb 20, 2013 5:13 pm
oldguy Senior Member
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Your mother can gift $14,000 (in 2013) to you w/o taxes or forms. And $14,000 each year thereafter. Or she can gift any amount up to $5.1 million by filing Form 709 and using up a portion of her $5.1M Estate Tax exclusion. So there will be no tax - and depending on the amount or if you string it out over a few yrs, no forms to submit.
Giving it to the loan company directly doesn't change things - she can do it either way - both are for the benefit of you.
What a great thing for you mom to do - what is your degree in?
Wed Feb 20, 2013 5:41 pm
ViktoriaS New Poster
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I am in serious debt from private student loans. I had no education on the interest rates and the lenders were giving out loans like candy back in 2006. It reminds me of the mortgage scam/crisis. How do they expect people to survive. It is utterly ridicilus how greedy the lender are with people. They do not offer any type of help towards repayment. That is the only way people will be able to be approve for things because having these loans will never provide perfect credit because most can never make on-time payments. Its absolutely insane.
Mon Feb 25, 2013 7:33 am
oldguy Senior Member
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quote: I had no education on the interest rates and the lenders were giving out loans like candy back in 2006.
Wow - you say that you signed up for high-cost loans because you didn't know any better -- but your answer is to stick other people with payday loans? Is that your way of "getting even" with society? Again - wow!
Mon Feb 25, 2013 1:13 pm
littleroc02us Moderator
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I'm still shocked to this day that the Gov't (or us) backs federally insured loans to people who don't have incomes. What a joke!
I worked really hard to pay back my student loans and I'm very proud of that, so I don't blame the lenders they just are in the business of giving out loans. They didn't force me to sign the papers.
Risk comes from not knowing what you're doing. (Warren Buffet)
Mon Feb 25, 2013 2:13 pm
coaster Senior Advisor
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quote:Originally posted by littleroc02us They didn't force me to sign the papers.
No, but I think much too often these lenders are making loans without adequate disclosure of what the consequences might be, and they're doing so because they're not required by law to educate the borrower, and these are just kids taking out the loans; at that age future consequences of current actions don't factor in very heavily to decisions that may have adverse future consequences. And so, they take out the loans, with a bright outlook on the future: "oh, it'll work out somehow"
~Tim~
Mon Feb 25, 2013 5:31 pm
littleroc02us Moderator
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I understand but when I borrowed for my student loans I knew how much I was borrowing, what my interest rate was (George Bush Senior back in the day allowed me to borrow at a fixed rate of 2.5%) and what the relative salary outcome would be once I graduated. Plus I had educated parents to walk me through my decisions.... I think a lot of students and parents although educated somehow believe that borrowing for colleges is the one time in life where the amount doesn't seem to matter. I'm going to make sure when my children apply for college they can tell me what exactly they want to do for a career, how they feel picking this certain college will benefit them and what are the expected income levels. Most people just think that college=a good paying job. That's called being Naive.
Risk comes from not knowing what you're doing. (Warren Buffet)
Mon Feb 25, 2013 7:46 pm
coaster Senior Advisor
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~Tim~
Mon Feb 25, 2013 10:29 pm
slasher Contributing Member
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I hate when people say well you signed the papers so that makes it okay that these lenders can charge disgusting rates on their loans. I am pay 10% on all my loans and I don't have a useless liberal arts degree. I try so hard to crush the principal but its a slow process and I pay way more than the minimum.
For people who haven't been able to have an amazing salaried position right out of high school such as myself I really feel for them. I had no choice but to take out loans and I had no choice but to agree to those rates.
When you think of the general well being of society this is complete nonsense and the next big bubble will be the student loans bubble. Which I welcome if it takes down Sallie Mae the biggest bastards of the industry.
Sun Mar 03, 2013 4:34 pm
coaster Senior Advisor
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I agree. Write your legislators; they are responsible. The lenders only do what they can legally do. If the law allows them to screw the students, then it is the legislators who wrote and passed the law, and the President who signed it, who are ultimately responsible. Write them exactly what you wrote here. And at the next election, vote for someone else.
~Tim~
Sun Mar 03, 2013 6:30 pm
slasher Contributing Member
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quote:Originally posted by coaster I agree. Write your legislators; they are responsible. The lenders only do what they can legally do. If the law allows them to screw the students, then it is the legislators who wrote and passed the law, and the President who signed it, who are ultimately responsible. Write them exactly what you wrote here. And at the next election, vote for someone else.
Unfortunately, I had worked as an intern for many years in a Senators office and I know exactly what happens to such letters. Basically, your complaint will be summarized handed to the senator and then filed. 99% of the time nothing gets done about it and the person responding back to your complaint would be an intern who is following a script. I have also seen the lobbys in full action and its disgusting how one company with many different subsidiaries of the same parent company are all lobbying subverting campaign finance ETHICS.
Overall I have given up on the US Government...Which is why I changed my focus onto finance.
Mon Mar 04, 2013 12:14 am
coaster Senior Advisor
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Google SOPA and you'll discover that if enough people act (ie real people, real voters, and not lobbyists), and act forcefully enough, legislators do actually listen. This government is the only one you've got. It's going to affect you whether you choose to ignore it or whether you choose to engage it. Choosing to ignore it will only result in some very nasty surprise somewhere down the road .... exactly like what happened with student loans.
~Tim~
Mon Mar 04, 2013 6:27 am
mikesmithm2 Member
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Higher education entails availing student loans and these are not clubbed as ... The planning of a achievable repayment schedule should be the primary ... Request family members to give you gifts as cash instead of kind for ...
Mon Mar 04, 2013 10:06 am
marionsawyer Member
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The relationship between student loan debt and bankruptcy is a complex one. Sadly in many cases today, these loans are becoming one of the highest causes of bankruptcy in college-attending Americans.
