Deferring Your Student Loans

July 18, 2012 — 1 Comment

Be ashamed to die until you have won some victory for humanity

-Horace Mann

If you’ve gone for an undergraduate or graduate degree in the past decade, or know someone who has, I’m sure you’re well aware of the staggering cost of a degree. American student loan debt now exceeds credit card debt (NPR).

Student debt vs. credit card and car loan debt

The cost of college has been the subject of debate; billionaire Peter Theil has launched a foundation to pay students to forgo a four year degree, while Seth Godin has written a manifesto on how to change school.

I have a number of thoughts on the course of education, but the subject of this post is to explain why I’ve started a petition against Citi Bank.

Citi is the second largest student loan originator in the country, and they do not offer the chance to defer loans for the Fulbright or Peace Corp programs. As a Fulbrighter I’ve had to start the process of applying for loan deferrals with the banks and government agencies who lent me money to go to college. I’ve spent quite some time on the phone with H.E.S.A.A. and MyFedLoad to determine the appropriate forms to file (for Stafford loans click here), when I got on the phone with a Citi Bank representative I was told that they don’t offer deferment for the Peace Corp or Fulbright – and pretty much said I was out of luck. My loan through Citi is at 10%, and I’m not asking that the interest stops accruing while I’m abroad – just to extend the grace period of the loan.

I’m really fortunate, Fordham is one of the most expensive colleges around and I’m graduating with about $50k in debt. I owe a little over $12,000 to Citi (which started as a $10,000 loan my sophomore year), and I’ll pay that off when I sell my car. If i didn’t have this option available my payments would be about $150 a month on this loan, which is about 15% of my Fulbright Stipend. I have to thank my supportive family for helping me to get through college, but if it wasn’t for them I’m not sure I could take this grant. If I had more loans through Citi, and couldn’t pay them off before my grant starts, I’d be in a tough place.

That is why I’m asking you to sign this petition to urge Citi to change their restrictive policy.

UPDATE: in 2010 Discover Financial purchased the Citi Student Loan Corporation.