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Thread: Managing student loan debt

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    #1

    Managing student loan debt

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    How did you decide which repayment plan to use? Do you pay more than the minimum? Did you consolidate?

    Mine are going to be due starting next month and I am still deciding how to approach it

    DH wants to pay them off ASAP no matter how difficult it would make our ability to save for a new car for me/have extra spending money. But he has an irrational fear of debt. I feel like it's not worth it to pay them off SO quickly, especially since I could be investing the $$ in my IRA and getting a higher return on interest.

    Any advice?
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    #2
    I had leftover scholarship money when I graduated, so I paid of a big chunk that way, which put my minimum payment at $0 for the next five or so years. So now, I pay whatever is leftover after paying off my credit card each month (I strictly use credit and pay it off completely each month).

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    #3


    My school loan payments are more a month than our mortgage. I literally work to pay nothing but my school loans
    Put on your big girl panties and deal with it like a boss.

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    #4
    Is your IRA return greater than the interest on the loans? I just applied for the IBR repayment plan.


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    #5
    I did not consolidate. I try to pay $2000-$3000/mo. (I'm in school currently, so I have no minimum payment, but I did the same thing while my loans were in repayment, which was 4x-6x my minimums.)

    If you feel you'll get better return in other investments, that may be the case. The majority of my debt is wrapped up in loans around 7.3% interest, which is pretty hefty.

    My personal rule is to keep about $3000-$3500 in savings and everything else goes toward my loans. My car is fine and I'm $80K in debt. I just want to get rid of it asap.
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    #6
    Quote Originally Posted by HazeGray View Post
    I had leftover scholarship money when I graduated, so I paid of a big chunk that way, which put my minimum payment at $0 for the next five or so years. So now, I pay whatever is leftover after paying off my credit card each month (I strictly use credit and pay it off completely each month).
    So if you pay off a big chunk at once there's no minimum payment for a while?
    Quote Originally Posted by *Bazinga* View Post


    My school loan payments are more a month than our mortgage. I literally work to pay nothing but my school loans
    Did you pick an income based plan or anything? Or the public service forgiveness program? I wanted to do that but I really don't think it's going to take me more than 10 years to pay them off...
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    #7
    Quote Originally Posted by KissTheRain View Post
    Is your IRA return greater than the interest on the loans? I just applied for the IBR repayment plan.
    My dad manages my IRA and I have about a 20% annual return. My student loans are at 6.8% currently. I don't think DH & I would qualify for IRB....
    Quote Originally Posted by Brianna Banana View Post
    I did not consolidate. I try to pay $2000-$3000/mo. (I'm in school currently, so I have no minimum payment, but I did the same thing while my loans were in repayment, which was 4x-6x my minimums.)

    If you feel you'll get better return in other investments, that may be the case. The majority of my debt is wrapped up in loans around 7.3% interest, which is pretty hefty.

    My personal rule is to keep about $3000-$3500 in savings and everything else goes toward my loans. My car is fine and I'm $80K in debt. I just want to get rid of it asap.
    DH & I have about 1 years worth of living expenses in savings. He wants to take enough out so that we have 6-8 months worth left, and pay down a huge chunk of my loans right away.
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    #8
    Quote Originally Posted by rocket_lizz View Post
    So if you pay off a big chunk at once there's no minimum payment for a while?
    Right. If your monthly payment is, say, $600, but you pay $1000 this month, it puts that extra $400 toward next month. So if you pay off a huge chunk, you won't have payments for however many months you paid off.
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    #9
    Quote Originally Posted by Brianna Banana View Post
    Right. If your monthly payment is, say, $600, but you pay $1000 this month, it puts that extra $400 toward next month. So if you pay off a huge chunk, you won't have payments for however many months you paid off.
    That's awesome! I thought it would just reduce your monthly payment accordingly, not actually delay it.
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    #10
    Have you been paying interest on your loans? If not, I would make a payment the day before consolidation (or a few days before, depending on when it processes/hits the account) to cover all accrued interest.

    The thing I hate most is paying interest on my interest. Your interest is going to capitalize if not paid off, which was a very disappointing thing for me, as I had 7 years of interest at ~7.3% accrued.

    Immediately after your loans mature, I'd make a lump sum payment, and then continue to pay as you are comfortable.
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