Lecteur Lesson / TAPIF Tip: Repaying Your Student Loans

If you are American and went to an American university, whether it be public or private, there is probably a good chance that you may have a few student loans to pay off.

TAPIF assistants make around 790 euros per month after taxes, and that lecteurs make approximately 1,227 euros per month after taxes. Either way, but especially for assistants, that’s not much to live on, especially if you have student loan obligations and very little in your savings account (assuming that statistically, most participants are recent college graduates). Not to mention, you are temporarily living in Europe, and the last thing you want to spend your money on is on student loan repayments.

Throughout this post, I will talk about my personal experiences and circumstances with my student loans. Next, I will give several feasible options in regards to repayment plans. Then, I will list a number of websites to use when repaying your student loans, or when transferring money from one account to another. Finally, I will state what I did as an assistante and what I am currently doing now as a lectrice in order to repay my loans. Please keep in mind that each person’s situation is unique, and my experiences are my own, and may not apply to your specific situation.

My Back Story:

I graduated from an in-state, public university. I never qualified for work-study, Sally Mae, Perkins, or subsidized federal student loans (meaning that the government pays your accruing loan interest rates while you’re in school or your loans are on deferment or forbearance). So, all of my student loans are un-subsidized and are always accruing interest (and I am responsible for paying it off.) Today, I have approximately $26,000 of student loans to repay, and I have chosen not to consolidate my two loans. All of my loans are managed under My Great Lakes, so this is where all of my background knowledge is coming from (and if anyone has any insight for other types of student loans, I would be happy to add your information to my post). Also, please keep in mind that I have not gone through a Master’s program in France, so I am not really aware of how loan deferment works for individuals going back to school full-time at an institution outside of the USA (again, any insight is welcome.)

Student Loan Repayment Plans :

1. Deferment versus Forbearance: As an assistant or a lecteur, you may or may not qualify for economic deferment- I recommend receiving a letter from Natalie Cox and submitting it to your loan provider- each situation is different! If you do not qualify for deferment, however, you should be eligible for a forbearance. Anyone can apply for a forbearance, at anytime, without having a specified reason. When your loans are on forbearance, it means that you are not required to pay them (but you CAN make payments if you want to, at any time). However, if you have any un-subsidized loans (as I do), you ARE required to eventually re-pay all of the accrued interest. During your 10-year repayment plan, the average person is allowed approximately three years of forbearance or deferment (so use the time wisely!). The most you can request at any one time is one year, but then you should be able to request another year following the completion of the first.

2. Level, Graduated, and Consolidated Repayment Plans: Great Lakes will automatically put you on a Level-based monthly repayment plan for each of your loans. This means that you will be given the same, set amount to pay each month for 10 years, until the loan is paid off. However, it is an option for you to set up a Graduated repayment plan, which means that you are given a set amount to repay every two years, for 10 years total, until the loan is paid off. The amount you will pay will be lower at first, and then will increase gradually every 24 months, under the assumption that as the years go on, you are making and saving more money and therefore are able to back more off. Typically you will pay more in interest using this method, but it IS a good and feasible option for assistants and lecteurs who will be temporarily working in France and need temporary relief. Finally, you can also consolidate your loans into one lower monthly payment, but you will most likely pay a lot more interest in the long run.

3. Income-based Repayment Plans: I am currently on an income-based repayment plan. You can do this either before or after leaving the US. What you need to do is apply online and then provide a pay stub less than 3 months old proving your monthly income, or your latest tax return. Then, your monthly payment will be calculated. If you plan to send a pay stub from Education Nationale, you will also need to provide a signed letter with the converted salary into US Dollars. Depending on what kind of money you were making in the US versus France could depend on the pay stub you choose to send. However, just make note that if you choose to send an assistant pay stub, you probably won’t receive one before November or December (as a lecteur you should be able to get the September pay stub from HR at the end of the month.)

Services for Paying off Student Loans:

As I now only work in France, all of my income is deposited into a French bank account. What complicates things even more is that Great Lakes only accepts payments from US bank accounts, so I had to figure out a way to cheaply transfer money from my French bank account to my American account every month. I have listed a few feasible options below, including methods used by both myself and other fellow expats:

1. Transferwise: This is the website I personally use to transfer money every month. It is free,  and easy to sign up (click here to get your first transfer free, via me!). Basically, you convert euros to dollars on the spot, and then register the bank details for both sides of the transfer. It only costs a couple of euros and never takes more than a week to go through!

2. XETrade: This is a website similar to Transferwise. I have a few friends who have used it, and the system and fees are similar, if not more or less exactly the same.

3. French Paypal to American Paypal: It’s kind of complicated, but I know friends who have transferred money from their French bank account to their French Paypal to their American Paypal to finally their American bank account. It takes between 7-10 days to complete the transfers, but it’s a good way to avoid bank fees.

4. BNP and Bank of America: If you have an account with Bank of America, you’re in luck, because BNP in France is the sister bank. So, if you are an assistant or lecteur, set up your bank with them and avoid paying heavy bank fees for international transfers. You should be able to send money back and forth between the two.

5. Western Union: Again, a similar system to options #1 and #2, although I have been told it costs more.

My Current and Past Situation:

I signed up for a Graduate-based repayment plan when my six-month grace period ended in September 2013. From August-December 2013, I paid approximately $200 per month, directly from my American savings account, while I was an assistante in France. However, because I wanted to spend my money on travel, and thought that I would be back working in the US post TAPIF, I applied for an 8-month forbearance on my loans, and did not make any payments from January-August 2014, and spent the vast majority of my savings on post-TAPIF travels. Unfortunately, my interest skyrocketed, and I basically gained back everything I had already paid off.

As of December 2014, I applied for an income-based repayment. I had to provide necessary paperwork (including a letter and a pay stub), but now my monthly payments correspond with my income and are extremely manageable. I make larger payments whenever I can, however.

Do you have any advice, insight, or questions to add about paying student loans while working in France (or in another country?) Leave me a comment below.

Bisous,

Dana

6 thoughts on “Lecteur Lesson / TAPIF Tip: Repaying Your Student Loans

  1. I link my tax return to my loan repayment so I can easily qualify for the income based repayment plan. I don’t need to send in any papers or fax anything because it is automatically reported by the IRS. Then because I also have unsubsidized student loans I have been accruing TONS of interest. So instead of paying the low amount that is required I massively overpay each month so that I can pay it off faster.

    -Amanda at http://teachingwanderlust.com/

Let me know what you think!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s