Advice on loan repayment

[Boatswain2PA]

I want to clarify my earlier point - accepting a less than optimal position in a hard-to fill place in exchange for stu loan repayment is, indeed, "paying your debts".

As to the student loan "disaster" that is being hyped:

 

1: Unfortunately many 18-22 year old kids DON'T understand the enormity of their debt.  Instead of going to a community college while living with mom & dad for the first two years and then going to a STATE school for their final two years while they WORK part time, many young people insist on going to the private or out-of state college for all four years while racking up enormous student loans.  Worse yet, many do this while pursuing undergraduate degrees that simply will never allow them to make enough to pay for their education (ie: $200K in stu loans repayment on a teacher salary).  

 

That being said, why is it taxpayer's responsibility to pay for that kid's stupidity?  If we keep making stupid decisions painless, we will get more stupid decisions.  

And before anyone gets upset because I said what you did was stupid, welcome to the club, I've done stupid too.  And I've done it quite well.

2: Government subsidizing student loans just exacerbated this problem by allowing students to get "more money now", and thus allowing academia to rapidly increase their tuition rates. They just love seeing students filling out their FAFSA.  

[RuralER/Ortho]

Depends on when your loans were issued. The loan forgiveness is in my promissory note.... Though my trust in the government is limited.

[Torshi]

Any advice on investing, putting money into retirement accounts, or buying a home is completely wrong. First thing is to pay off the debt. Most people don't know how to invest, retirement isn't going to help - the debt is the main concern, & buying a home or anything of that nature increases debt even more. 

 

 

Work hard, pull extra shifts, and pay it off first before anything else. 

[Jaclyne]

Hi,

 

I am new to the forum and I joined this group because I would like to offer my assistance about the Student Loan Repayment and the Public sevice Loan Forgiveness.

 

I am a Consultant through Josey Consulting Group and I am not soliciting but rather I would like to offer my consultng service which is a free consultation.

 

The Public Service Loan forgiveness can be done when you consolidate your fed student loans to which then you will be qualified to to have your loan forgiven by the PSLF.

 

You can contact me via email or call me

 

My joining this forum ss with good intention because I truly believe in helping those that could use free consultation. When you decide to consolidate your loans , then we discuss on how to proceed.

 

You can visit my linked in and you will find my post about Student Loans. I will post my information if everyone is in agreement.

 

Thank you

[Jaclyne]

OK. Based on the information you provided 190000 student loand . both income $145000 and family size 3 and you work for non profit.

 

You qualify for the revise pay as you earn and if we consolidate your estimte payment $909. Make 120 payments and remaining balance will be forgiven. Of course there will be income verification every year.

 

This is n estimate. If you want to contact let me know.

[Boatswain2PA]

OK. Based on the information you provided 190000 student loand . both income $145000 and family size 3 and you work for non profit.

 

You qualify for the revise pay as you earn and if we consolidate your estimte payment $909. Make 120 payments and remaining balance will be forgiven. Of course there will be income verification every year.

 

This is n estimate. If you want to contact let me know.

Of course, doing it this way, the OP could find themselves in a spot in 10 years where they have made 119 payments and the program is discontinued.  This means they have spent $100K, and now owe about $240,000.  

[Jaclyne]

That's a good question. The Department of ED will the be Lender on these consolidated loans.

 

In order to be qualified to have the PSLF, all outstanding student loans must be consolidated and then be put in the Income Based Payments.  The Lender will be Department of ED and the Servicer will be through the Dept of Ed.  

 

Info on Repayment Plans

 

Standard Repayment Plan THIS IS THE CURRENT STANDARD PLAN THAT EVERYONE FALLS INTO

·         10 year repayment plan, in which a borrower is to pay 1% of the total payoff amount of 120 payments

·         This is the repayment all student loans have prior to consolidating. 

·         The borrower will pay a fixed amount each month until their loan (s) are paid in full

Graduated Repayment Plan THIS IS THE CURRENT STANDARD PLAN THAT EVERYONE FALLS INTO

·         10 year repayment plan that increases every 2 years. 

·         The first 2 years of payments only cover the amount of accrued interest

Extended Standard Plan THIS IS THE CURRENT STANDARD PLAN THAT EVERYONE FALLS INTO

·         25 year repayment plan, in which a borrower is to pay 1% of the total payoff amount for 300 monhtly payments.

·         The current outstanding  balance must be greater than $30,000

·         The borrower will pay afixed amount each month until your loanss are paid in full. 

Extended Graduated Repayment Plan THIS IS THE CURRENT STANDARD PLAN THAT EVERYONE FALLS INTO

·         25 year repayment plan that increases every 2 years.

·         Outstanding balance must be greater than $30,000

·         The minimum payment amount will be at least $50 or the amount of interest accrued monthly, whichever is greater

·         This repayment plan has the highest total payout amount

 

Income Contingent Repayment Plan (ICR) THIS IS ONE OF THE NEW PROGRAM THAT IS NOW AVAILABLE

·         Monthly payment based on annual Adjusted Gross Income (AGI) | Loan Balance | Family Size | Interest Rate

·         Once a year DOE will verify the income and family size, and then adjust the monthly payment accordingly

o    If the income decreases – the  monthly payments will decrease, extending the life of the loan

o    Change in family size will also affect the size of themonthly payments.  The more family members a borrower has, the lower the payments will be

·         The payments are spread over a term of up to 25 years (300 monthly payments)

o    After the 300^th monthly payment, the remaining balance will be forgiven.

 

Revised Pay As you Earn (this is the program that we have been offering because its what most of the borrower’s benefit to)

·         The payments are 10% of your discretionary income. 

·         Information used to calculate your discretionary income will be based on Annual Adjusted Gross Income (AGI) and Family Size.

·         The borrower must be experiencing 

[sillycibin]

I have a huge amount of student loans and I've thought about the PSLF program.  Essentially to make it viable for people like us making the salaries that we do is that you have to maximize your 401k and HSA contributions.  Those get to deduct first before determining your AGI which determines your payment amount.  My "scheme" is to cut my hours back to low 30's, make $75k a year, then sock away $18k to the 401k, $3k to the HSA, and $5k to a traditional IRA.  So that drops my AGI after $26k in contributions to $49k and my estimated payment is about $400 a month.

[Jaclyne]

OK.   I have attached 2 scenarios and used the Repayment Calculator that is available at Student Finance Aid website.  

 

I've removed some of the repayment plan because I only want to show the one that would be of benefit.  The calculation I used is based on PSLF, 120 months of payments and the remaining balance would be what could be requested to be forgiven (remember, you have to follow the requirements in order to be fully eligible for the PSFL), to which I will post for everyone to just review and ask me any question.

 

Let me know of your thoughts.

 

Remember, this is just a sample that I used.  If anyone wanted me to run some figures, send me a message and I will tell you.

 

As I have indicated, if you consider in consolidating, you can do this yourself by visiting the Student Aid Government site, but if you would rather hire someone to do the consolidation process, I can help you with that.

 

Good day everyone.

 

Jaclyne

 

 

[Boatswain2PA]

I have a huge amount of student loans and I've thought about the PSLF program.  Essentially to make it viable for people like us making the salaries that we do is that you have to maximize your 401k and HSA contributions.  Those get to deduct first before determining your AGI which determines your payment amount.  My "scheme" is to cut my hours back to low 30's, make $75k a year, then sock away $18k to the 401k, $3k to the HSA, and $5k to a traditional IRA.  So that drops my AGI after $26k in contributions to $49k and my estimated payment is about $400 a month.

 

So for ten years you will be limited in your income to how much this government program tells you that you can make, and take the enormous risk that in 9.5 years the government changes the program and you no longer qualify....and now instead of a 200K student loan you have a 350K student loan debt.  

 

I'm not telling you what to do, but you should at least consider that risk.

 

Alternative is to work 60 hours a week, make $150K a year, live on rice & beans, and you can have a $200K student loan PAID OFF in 4 years, then you will have freedom to work where you want and when you want.  

 

Freedom isn't free, but there's nothing that tastes as sweet.

[theredcliche]

..... live on rice & beans, and you can have a $200K student loan PAID OFF in 4 years, then you will have freedom to work where you want and when you want.  

 

Freedom isn't free, but there's nothing that tastes as sweet.

somebody looks like a Dave Ramsey fan.... :) good advice, though.