do you understand student loan repayment?

posted 3 years ago in Money
Post # 3
Member
3199 posts
Sugar bee
  • Wedding: October 2013

@amandasouthcarolina:  you should call and ask your loan servicer if your student loans are ever forgiven after a period of time (bury it in other questions). i highly doubt it – i know people in their 50’s still paying back their student loans.

the best way to go about paying back your student loans (assuming they aren’t forgiven after a certain amount of time) is to 1) consolidate if it will give you a lower interest rate and then 2) pay as much as you can every month, starting with the ones with the highest interest rate.

Post # 4
Member
3199 posts
Sugar bee
  • Wedding: October 2013

regarding IBR, you can stay on that and just pay extra every month. IBR just sets your minimum monthly payment.

Post # 5
Member
1549 posts
Bumble bee
  • Wedding: June 2013

How much do you owe and what is the interest rate?

 

Post # 6
Member
11740 posts
Sugar Beekeeper
  • Wedding: November 1999

It depends.  DH’s loans will be forgiven at 25 years.  If I dragged mine out for 25 years though, I’d pay probably triple what I should have because of the interest charges.  Your best bet is to call your loan company and ask them.

Post # 7
Member
11668 posts
Sugar Beekeeper
  • Wedding: November 1999

@amandasouthcarolina:  I believe, based on memory when I was researching repayment options, that it depends on your income in the years to come.  If you continue to make X amount that keeps you qualified for ICR, then after 25 years they  are forgiven.  However, I believe that say in 10 years you are making too much money to qualify for ICR, then you would be expected to continue paying in full because you no longer qualify under ICR.  

I could be wrong, again this is all from memory.  I’d contact your loan servicer and ask for clarification.  It’s always best to pay as much as you can towards the principal balance.  I believe ICR you are only paying for interest, so basically your loan amount never actually goes down.

Post # 9
Member
1549 posts
Bumble bee
  • Wedding: June 2013

Income based and Income contingent are VERY different – only one of them will forgive you after 25 years.

But think about it – unless you are a bum and you work a very low paying job for the next 25 years never getting a raise – you are going to be paying 10 times what they will forgive in just interest over the years. Because your payment goes up as you get a raise. Its not worth it in the long run – most people dont bother to actually do the math of what they are paying total and just think about the monthly payments and they end up paying tens or hundreds of thousands in interest… Get those things paid off asap… don’t keep it on income contingent for any longer then a few years. Trust me in 25 years – all they are “forgiving” is interest they charged you – you’ve already paid ALOT more then the principle.

Post # 11
Member
1549 posts
Bumble bee
  • Wedding: June 2013

So you owe 121k…. if  you take 25 years to pay that off you are paying 240k over the course of the years…. Thats DOUBLE what you owe…. trust me it will destroy you if you don’t get rid of it ASAP. Its a mortgage payment. Its not fun having 2 mortgage payments – you can get half the size of house because you have to worry about paying the huge payment on your student loans. Focus on getting rid of yours first since its lower.

I owe 109k -i’m not far behind you. Its hard but you gotta just make a budget and throw every extra dollar at it you can each month. Think about how free (and rich) you will be without that payment every month!

Post # 12
Member
9949 posts
Buzzing Beekeeper
  • Wedding: June 2013

@amandasouthcarolina:  I am a public services employee (public school), so if I enroll in an income-based repayment plan for my federal loans, the remainder will be forgiven after 10 years.  What kind of loans do you have?  Are they public or private?  It is unlikely your private loans would be forgiven.

Post # 15
Member
1018 posts
Bumble bee

@amandasouthcarolina:  Do NOT wait for them to be forgiven. That should be something that happens in extreme cases much like you wouldn’t just file bankruptcy on a whim. Pay off as much as you can as fast as you can and you will have many many years debt free 🙂

Post # 16
Member
1327 posts
Bumble bee

These figures blow my mind!!!  Big hugs, positive thoughts, and good luck to all of you neighbours in the States!

I graduated with just over $30K (which was bad enough!) and am down to just over $13K.  I really, really want to pay it off before I get engaged (or before I get married, at the latest) because I really don’t want to bring debt into my marriage, especially since SO has no debt. 

I’ve been living at home to save more money, but I’m desperate to move out, so repayment has slowed down.  I’ve prioritized my sanity over debt repayment.  Haven’t gone on vacation in over a year and I haven’t made any big purchases – it’s rather depressing but I know it’s important! Gotta keep the eye on the prize.

@amandasouthcarolina:  Throw every bit of extra money you have into debt repayment and get it paid off ASAP, girl!  You’re going to be progressing and making more money as the years go by, so don’t wait for your loans to be forgiven! 🙂 

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