The Student Loan Debt Forum | The College Investor

Student Loans => Navigating Repayment => Topic started by: Nlk on October 11, 2017, 08:10:06 am

Title: Switch payment plan after so long?
Post by: Nlk on October 11, 2017, 08:10:06 am
My husband and I both started repaying student loan debt of about 40K each in 2003.

At some point along the way we each consolidated our several debts and each pay about $200/month. From 80K, we have $18500 left between the two of us (at age 40.)

Our loans recently switched to Navient, and they have a handy tool that shows a few repayment plans we can choose to switch too. There's a 2-yr plan that allows us to lower the monthly payment to $75 (interest only basically) for 2 yrs, then up to $200 for the balance of the loan. (I couldn't tell if it was $75 total, or $75 for each of us.)

I was also reading that there are  forgiveness plans that would forgive the loan after a certain amount of time but it doesn't seem like any of those apply to us as we've already been paying on the loan for 14 years, and have about 5-7 yrs left.  I was wondering if we should just stick with what we're doing. The $400 monthly payment is painful but we've been doing it for 14 years. At the same time we are at a point financially that feels like a pinch point. (I've been unable to work the past several years due to medical issues and then a child to care for, and for the 1st time we've been taking out credit cards to help pay for major expenses, and pulling money out of retirement accounts,  because we have no cushion at the moment. Our financial situation should improve steadily over the next few yrs. Thoughts on how to decide if we should just stay the course? No matter what repayment options I selected, it said we'd pay more over time if we switched, but it didn't say how much more. So I don't know if it was pennies, hundreds, or more.
Title: Re: Switch payment plan after so long?
Post by: Nlk on October 11, 2017, 08:13:35 am
 A follow up thought  - should we consolidate our loans together -  I think we can do that because we're married.  The loans are at a low percent, so maybe we could put them on a long repayment plan. And then hope to reach the twenty-year cut off for forgiveness for It? Do they take the 14 years we've already been paying on them into consideration ?
Title: Re: Switch payment plan after so long?
Post by: TheCollegeInvestor on October 11, 2017, 09:25:47 am
Hi Nik, a few things:

1. No, you can't consolidate your loans together. They used to offer spousal consolidation, and it was terrible. So many who did it regretted it years later because of the lack of repayment options.

2. Never pull money out of a retirement account. Look at other options.

3. With #2, if you can't make it because of your loan payment, switch to the lower payment now, and then boost it back up when it's more affordable. Your future retirement will thank you.

4. If you're going to be debt free in 2-3 years, I wouldn't change plans - you basically hit the reset button on forgiveness if you do. It doesn't take into consideration your past 14 years - it will be 20 years from when you start the qualifying repayment plan.