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Author Topic: Navigating the Best Repayment Plan  (Read 122 times)

brefern20

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Navigating the Best Repayment Plan
« on: February 20, 2019, 08:47:37 AM »
Hey there  :)

I'm looking for the best repayment strategy to pay off my student loans in a stress-free manner over a period of time. I'm not the type to lose sleep over paying off my student debt in the quickest amount of time. I would say I'd like to focus on a strategy that allows me to live comfortably, and gives me a plan of attack I can stick to. Thus far, I have paid my IBR payments on time, but would like to make sure this is the best course of action. I'm well aware that I can be forgiven after 25 years if I pay consistently, but I'd like to cut this time in half.

Here are the specifics: I am 27 years old/Married/ 130k in debt/all federal loans (12 in total)/highest interest is 7.21% at 27k/lowest interest 3.4% at 4k/if were to consolidate all loans the interest would be 6.25%/My IBR payment is 179$ based on my previous 55k income/My new income is 80k and plan to make 120k within 3 years/I have 25k in assets (401k/investments/savings).

WWYD, factoring in refinancing/IBR/consolidation/snowball method/avalanche method and all that jazz.

TheCollegeInvestor

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Re: Navigating the Best Repayment Plan
« Reply #1 on: February 20, 2019, 09:48:26 AM »
The absolute best thing is to pay what you can afford and never miss a payment. I definitely wouldn't consolidate. If you told me you were on the standard 10 year plan and were paying more than the minimum comfortably, I'd say refinance and keep doing what you're doing. Especially since you're looking to be debt free in 12 years anyway.

However, as it stands with your income at $80k, you're not even projected to get loan forgiveness, as the loan will be totally paid off before 25 years (you can use this tool to play with yourself: https://studentloans.gov/myDirectLoan/repaymentEstimator.action#view-repayment-plans).

So, anyway, back to it - there's no magic bullet. Just pay as much as you possibility can as extra principal payments on your loans. That's how you'll do it. Honestly, you could probably do it in 5 years or less if you really tried. Pay until it hurts.

Do you have any shot at PSLF? Does your wife have income? Does she have loans too? Do you have kids?


brefern20

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Re: Navigating the Best Repayment Plan
« Reply #2 on: February 20, 2019, 10:19:33 AM »
Thanks for the quick reply it really helps!

1. I'm not really sure if I have a chance at PSLF? I went to law school for one semester and left, proceeded to get a Masters and now work in advertising as a writer.

2. I'm a woman haha, my husband doesn't have US income this year because he is foreign, but luckily, has no loans nor debt.

3. Kid free, dog friendly.



TheCollegeInvestor

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Re: Navigating the Best Repayment Plan
« Reply #3 on: February 25, 2019, 05:37:50 PM »
1. I'm not really sure if I have a chance at PSLF? I went to law school for one semester and left, proceeded to get a Masters and now work in advertising as a writer.

Remember, PSLF is not about your degree, but about your employer. If your employer is a non-profit, you can qualify. It doesn't sounds like you do right now, but that could change in the future.

2. I'm a woman haha, my husband doesn't have US income this year because he is foreign, but luckily, has no loans nor debt.

Great!

3. Kid free, dog friendly.

If this might change, it could lower your loan payment (since it's based on family size), but once again, in the future.