Hi Jared King,

Our gurus have offered you a great amount of information. If you're still searching for more answers, you should definitely check out our student loan consolidation guide. Good luck!

Hi JaredKing,

Mark's specific guidance on your student loan options is excellent, and I don't have anything substantive to add.

There is one other related factor you might consider: your marital status might substantially affect your take-home pay.

Here's an example. If you marry your fianc between now and December 31, then for income tax purposes you will be considered married by the IRS for all of 2008. In a situation like yours, where the spouse-to-be isn't working and the you will have one or more children as dependents, that can have a MAJOR effect on your tax liability.

First, you can quickly see how much your brackets will change using Kaye Thomas's helpful chart. And note that you'll have three personal exemptions instead of one (you, yourself and daughter), further improving your situation.

Moreover, once married with a child, you may qualify for a significant Earned Income Tax Credit. The IRS has the details here. The bottom line is that you my receive up to $2,917 in a fully refundable tax credit this year alone. And that's on top of the benefits of being in a lower bracket and having more exemptions to begin with. Altogether, you could be looking at an increase of after-tax income of as much as $500 or more, which should go a long way towards helping you make those loan payments.

Please understand, I'm not advising you to base your decision to marry or not around your tax or loan situation! In addition, you will of course need to consider all tax consequences of filing as a married couple before proceeding. Those disclaimers aside, I did want to stress that since you have already decided you wish to marry, the substantial effect that the timing of this decision could have on your finances is worth keeping in mind.

Congrats on your engagement, and good luck with your loan issues!

Federal loans cannot be consolidated with private student loans, so the best case scenario is two loans. But you're not really asking about consolidating loans, since a consolidation loan will still have the same loan balance. (Also, a private consolidation loan will only yield a lower interest rate when the borrower or cosigner has a significantly improved credit score.)

What you need is a reduction in the total monthly loan payment. Consolidating the private student loans will not necessarily accomplish this, as most private student loans start off with a 20 or 25 year loan term.

Please note that while increasing the loan term will decrease the monthly loan payment, it also increases the total interest paid over the life of the loan. But it sounds like you don't have much of a choice -- it's either that, or default on one or more of your loans. A forbearance is not a permanent solution (and if you are not paying at least the interest, it is making the situation worse).

Some practical advice:
1. If your federal loans total more than $15,000, consolidate them at loanconsolidation.ed.gov and pick either extended repayment or income contingent repayment, whichever results in a lower monthly payment. If the loan balance is not more than this, it won't make much of a difference if you consolidate or not.

2. If any of your private student loans have a loan term of 15 or 20 years, call the lender and ask them to increase the loan term to 25 years. This will reduce the monthly loan payment slightly.

3. It sounds like you've already applied to several lenders for private consolidation. There are only 7 lenders that still offer these loans; you can find a list on the Private Consolidation Loan page on FinAid. You could also try talking to your local hometown bank about an unsecured loan to pay off the three private student loans, but that might not provide much relief.

After you have done #1 and #2, calculate the total of the monthly loan payments on all your loans and compare this with your income and other expenses. You are then going to have to make some hard choices, cutting out any expense that is not an absolute necessity (e.g., food, shelter, medical care are necessities). If this still isn't enough, you may end up defaulting on one or more of the private student loans.

Note that it is very difficult to discharge student loans in bankruptcy. An undue hardship petition requires that you not only be unable to repay the loans and maintain a minimal standard of living, but that this situation has to persist for most of the life of the loan.

Another possibility would be to ask your fiance to get a job to help with the loan payments.

Unfortunately, there aren't any really good solutions. You are in a difficult situation.

Good luck.