Another student loan question

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nymeria.stark
Posts: 112
Joined: Wed Jul 20, 2016 9:27 am

Another student loan question

Post by nymeria.stark » Tue Jul 17, 2018 2:52 pm

Hi, all--

I've done some research on the forum on student loans, but I think it's time for me to ask for more personalized advice.

Here's the deal. I have a Federal Direct Graduate Plus student loan from the Department of Education, serviced by Nelnet. I originally borrowed $50,000 in 2008. In 2015, I was kicked off of my income-based repayment program and consolidated my loans in order to restart my payment window.

I currently owe $54,135 (due to the aforementioned income-based repayment plan that didn't cover all of the accruing interest). I'm on a graduated repayment plan, paying about $400 a month, and dreading when it goes up again in two more years. My current interest rate is at 7.625 percent. My credit, despite all of this, is at 759.

Otherwise, I feel like I'm in OK shape. I have a mortgage, but it's much less than it would cost to rent in my area. I'm getting my 401(k) match at work (4%), making car payments and everything else. (The car payments are maybe more than I'd like, but I drive a lot for work and live in a rural area, so I need an incredibly reliable car.) While I know just being able to afford a mortgage/rent and car payments makes me more solvent than many people my age, I don't have much extra each month, and this student loan is this huge weight on my chest. Without it, I'd throw much, much more at my 401(k) or an IRA, start saving for some much-needed home improvements, but I just don't have that option right now.

So. My first question is--what would you all do? How can I make this situation better and stop paying so much interest? How can I give myself some breathing room?

As for what I've done already, I've checked out Common Bond and First Republic, but they don't offer loans in my state. I tried PenFed, but they wouldn't give me a rate because I went to grad school abroad. SoFi and Laurel Road are only offering interest rates a percentage point lower than what I have (or that's what they were offering last time I checked). It feels like nothing I can do--even trying to see if I can squeeze an extra $100 out of my income--will make much of a difference in the grand scheme of things.

Please, any advice is helpful! (Unless it's, "You should have thought of this before you took out the loan." I'm aware.)

Thank you--
Just a girl, standing in front of her finances, asking them to make more sense.

JoeRetire
Posts: 1647
Joined: Tue Jan 16, 2018 2:44 pm

Re: Another student loan question

Post by JoeRetire » Tue Jul 17, 2018 2:58 pm

nymeria.stark wrote:
Tue Jul 17, 2018 2:52 pm
I currently owe $54,135 (due to the aforementioned income-based repayment plan that didn't cover all of the accruing interest). I'm on a graduated repayment plan, paying about $400 a month, and dreading when it goes up again in two more years. My current interest rate is at 7.625 percent.

Otherwise, I feel like I'm in OK shape. I have a mortgage, but it's much less than it would cost to rent in my area. I'm getting my 401(k) match at work (4%), making car payments and everything else.

I don't have much extra each month, and this student loan is this huge weight on my chest.

So. My first question is--what would you all do? How can I make this situation better and stop paying so much interest? How can I give myself some breathing room?
I would do two things:
1) Cut back on the "and everything else". Everyone has some space in the budget they could cut. Dig deep and you'll find some.
2) Get more income. Find a second job (or "side hustle" if you prefer).

KT785
Posts: 266
Joined: Fri Jul 11, 2014 2:21 pm

Re: Another student loan question

Post by KT785 » Tue Jul 17, 2018 3:06 pm

I refinanced my Law School loans through PenFed but afterwards I received several promotions from my local CU to refinance (I think rates were comparable to PenFed). You may want to see if any CU you're affiliated with has a student loan refi program; I believe my CU leverages LendKey--you may likewise want to check them out as I believe they act as a broker for multiple vendors.

https://www.lendkey.com/

delamer
Posts: 6270
Joined: Tue Feb 08, 2011 6:13 pm

Re: Another student loan question

Post by delamer » Tue Jul 17, 2018 3:12 pm

JoeRetire wrote:
Tue Jul 17, 2018 2:58 pm
nymeria.stark wrote:
Tue Jul 17, 2018 2:52 pm
I currently owe $54,135 (due to the aforementioned income-based repayment plan that didn't cover all of the accruing interest). I'm on a graduated repayment plan, paying about $400 a month, and dreading when it goes up again in two more years. My current interest rate is at 7.625 percent.

Otherwise, I feel like I'm in OK shape. I have a mortgage, but it's much less than it would cost to rent in my area. I'm getting my 401(k) match at work (4%), making car payments and everything else.

I don't have much extra each month, and this student loan is this huge weight on my chest.

So. My first question is--what would you all do? How can I make this situation better and stop paying so much interest? How can I give myself some breathing room?
I would do two things:
1) Cut back on the "and everything else". Everyone has some space in the budget they could cut. Dig deep and you'll find some.
2) Get more income. Find a second job (or "side hustle" if you prefer).
This really sums it up — in order to pay off your loans sooner, you can either increase your income or reduce your expenses or both.

If you want to post your current income and expenses, you’ll get some suggestions on how to squeeze more money out to go toward the loans.

Is your housing such that you could get a temporary roommate?

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FlyAF
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Re: Another student loan question

Post by FlyAF » Tue Jul 17, 2018 3:24 pm

1 percentage point is better than nothing. SoFi will refi the loan w/ no fees and shave off a point, that's nothing to scoff at. You're playing a long game here and each dollar counts.

When I was in your shoes, I got a 2nd job. It's not fun and you're always working, but it's the quickest way to get rid of it. You're young, you can handle it. There is no easy/simple way to get out of 50+k debt. Work, earn, pay it down.

nymeria.stark
Posts: 112
Joined: Wed Jul 20, 2016 9:27 am

Re: Another student loan question

Post by nymeria.stark » Tue Jul 17, 2018 3:38 pm

Thanks for the suggestions!

My gross annual income is $60,000. I work a more than full-time job in PR and I'm a writer, so any side hustles I pick up in my field pay a laughably small amount (seriously $75 for two weeks of work, or sometimes I'll work weeks on a pitch only to have it not get picked up anywhere). Weekends are spent doing stuff on my own around the house so I don't have to pay professionals. No possibility of a roommate, though I appreciate that suggestion!

I suppose it's not impossible to pick up a second gig, though the market is tight here--no big box stores, no fast food places, no chain retail. Waitressing or bartending would be the most likely options.

JoeRetire and Delamer, I'm curious--a lot of the "everything else" is insurance. Life insurance on myself for my spouse's sake, car insurance, flood insurance, home insurance, disability insurance--would you consider those to be necessary expenses, or luxury items? You're right that there's probably room here, though apart from that, there's not a lot.

And thanks, FlyAF--you're right that a percentage point is nothing to scoff at. Maybe I need to lower my expectations. Sounds like there's not a silver bullet here.
Just a girl, standing in front of her finances, asking them to make more sense.

nymeria.stark
Posts: 112
Joined: Wed Jul 20, 2016 9:27 am

Re: Another student loan question

Post by nymeria.stark » Tue Jul 17, 2018 3:41 pm

KT785 wrote:
Tue Jul 17, 2018 3:06 pm
I refinanced my Law School loans through PenFed but afterwards I received several promotions from my local CU to refinance (I think rates were comparable to PenFed). You may want to see if any CU you're affiliated with has a student loan refi program; I believe my CU leverages LendKey--you may likewise want to check them out as I believe they act as a broker for multiple vendors.

https://www.lendkey.com/
Thank you for the suggestion! LendKey won't work because I didn't go to a Title IV school--that was the problem with the other lenders. I'll check with my local CU, though--they might have more flexibility. Thanks!
Just a girl, standing in front of her finances, asking them to make more sense.

Nate79
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Location: Delaware

Re: Another student loan question

Post by Nate79 » Tue Jul 17, 2018 3:47 pm

Dave Ramsey. Sell the car and get a cheaper one. Claiming you need a reliable car thus require car payments is hog wash. Get intense. Take extra jobs (you and your wife, no excuses, every single penny extra matters). Cut the budget to the bone. No eating out. No vacations. Throw everything at the debt. I would stop all investing except the 401k match if you can do the other things like budget cutting and get rid of the car payment.

If you can't do those things you may need to consider selling the house and moving to a lower cost rent. That you mention "much needed home improvement" is a little scary that you are not able to afford basic home improvements.


nymeria.stark wrote:
Tue Jul 17, 2018 2:52 pm
Hi, all--

I've done some research on the forum on student loans, but I think it's time for me to ask for more personalized advice.

Here's the deal. I have a Federal Direct Graduate Plus student loan from the Department of Education, serviced by Nelnet. I originally borrowed $50,000 in 2008. In 2015, I was kicked off of my income-based repayment program and consolidated my loans in order to restart my payment window.

I currently owe $54,135 (due to the aforementioned income-based repayment plan that didn't cover all of the accruing interest). I'm on a graduated repayment plan, paying about $400 a month, and dreading when it goes up again in two more years. My current interest rate is at 7.625 percent. My credit, despite all of this, is at 759.

Otherwise, I feel like I'm in OK shape. I have a mortgage, but it's much less than it would cost to rent in my area. I'm getting my 401(k) match at work (4%), making car payments and everything else. (The car payments are maybe more than I'd like, but I drive a lot for work and live in a rural area, so I need an incredibly reliable car.) While I know just being able to afford a mortgage/rent and car payments makes me more solvent than many people my age, I don't have much extra each month, and this student loan is this huge weight on my chest. Without it, I'd throw much, much more at my 401(k) or an IRA, start saving for some much-needed home improvements, but I just don't have that option right now.

So. My first question is--what would you all do? How can I make this situation better and stop paying so much interest? How can I give myself some breathing room?

As for what I've done already, I've checked out Common Bond and First Republic, but they don't offer loans in my state. I tried PenFed, but they wouldn't give me a rate because I went to grad school abroad. SoFi and Laurel Road are only offering interest rates a percentage point lower than what I have (or that's what they were offering last time I checked). It feels like nothing I can do--even trying to see if I can squeeze an extra $100 out of my income--will make much of a difference in the grand scheme of things.

Please, any advice is helpful! (Unless it's, "You should have thought of this before you took out the loan." I'm aware.)

Thank you--

JoeRetire
Posts: 1647
Joined: Tue Jan 16, 2018 2:44 pm

Re: Another student loan question

Post by JoeRetire » Tue Jul 17, 2018 3:49 pm

nymeria.stark wrote:
Tue Jul 17, 2018 3:38 pm
Waitressing or bartending would be the most likely options.
Some waitress jobs bring in good money.
JoeRetire and Delamer, I'm curious--a lot of the "everything else" is insurance. Life insurance on myself for my spouse's sake, car insurance, flood insurance, home insurance, disability insurance--would you consider those to be necessary expenses, or luxury items? You're right that there's probably room here, though apart from that, there's not a lot.
Even a little helps. There's a fairly well known radio personality who would say something like "Rice and Beans. Beans and Rice."

Is your spouse dependent on your income? Insurance is often important, but not always necessary. Do you and your spouse co-mingle your funds and debts?

Without knowing all of your expenses, it's hard to offer solid suggestions. When my wife and I were first married, we vowed to save up for a house. We lived on one of our four incomes, never took vacations, didn't buy any furniture, never ate out, etc. Less than two years later we moved into our first house. Saving can happen.
Maybe I need to lower my expectations. Sounds like there's not a silver bullet here.
Silver bullet are rare, and usually expensive.

delamer
Posts: 6270
Joined: Tue Feb 08, 2011 6:13 pm

Re: Another student loan question

Post by delamer » Tue Jul 17, 2018 3:57 pm

nymeria.stark wrote:
Tue Jul 17, 2018 3:38 pm
Thanks for the suggestions!

My gross annual income is $60,000. I work a more than full-time job in PR and I'm a writer, so any side hustles I pick up in my field pay a laughably small amount (seriously $75 for two weeks of work, or sometimes I'll work weeks on a pitch only to have it not get picked up anywhere). Weekends are spent doing stuff on my own around the house so I don't have to pay professionals. No possibility of a roommate, though I appreciate that suggestion!

I suppose it's not impossible to pick up a second gig, though the market is tight here--no big box stores, no fast food places, no chain retail. Waitressing or bartending would be the most likely options.

JoeRetire and Delamer, I'm curious--a lot of the "everything else" is insurance. Life insurance on myself for my spouse's sake, car insurance, flood insurance, home insurance, disability insurance--would you consider those to be necessary expenses, or luxury items? You're right that there's probably room here, though apart from that, there's not a lot.

And thanks, FlyAF--you're right that a percentage point is nothing to scoff at. Maybe I need to lower my expectations. Sounds like there's not a silver bullet here.

Even expenses that can’t be eliminated can frequently be reduced, like shopping around for lower insurance rates or using coupons for groceries. So it isn’t a question of necessity or luxury, but just not paying more than you need to.

If you have a spouse, then are your finances joint or separate? Is there any help available from your spouse to pay down the student loans.

nymeria.stark
Posts: 112
Joined: Wed Jul 20, 2016 9:27 am

Re: Another student loan question

Post by nymeria.stark » Tue Jul 17, 2018 4:26 pm

Delamer and JoeRetire, thank you so much, again! I really appreciate your thoughtful responses.

Yes, we combine funds and debts (which is part of the reason I'm being so vague--not sure how much of our financial information my spouse would appreciate being on the internet). My spouse also has student loans to pay, so there's not much help there. My interest rates are about 4 percentage points higher, so they're the ones creating the most pressure right now. I'm hoping to find a solution for what feels like a problem I caused through my own mistakes/poor decisions.

Like many millennials, we are dependent on both of our incomes to pay the mortgage, so that's where the life insurance/disability insurance come in. Otherwise, I agree that could be examined.

Thank you, again. Sounds like rechecking SoFi, more closely examining our monthly expenses and throwing as much as we can toward this debt is the key--and, perhaps, waitressing. :beer <--(if you look closely, the smiley is serving that beer, not toasting ;) )
Just a girl, standing in front of her finances, asking them to make more sense.

tch_usa
Posts: 13
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Re: Another student loan question

Post by tch_usa » Wed Jul 18, 2018 10:21 am

nymeria.stark wrote:
Tue Jul 17, 2018 4:26 pm
Yes, we combine funds and debts (which is part of the reason I'm being so vague--not sure how much of our financial information my spouse would appreciate being on the internet). My spouse also has student loans to pay, so there's not much help there. My interest rates are about 4 percentage points higher, so they're the ones creating the most pressure right now. I'm hoping to find a solution for what feels like a problem I caused through my own mistakes/poor decisions.

Like many millennials, we are dependent on both of our incomes to pay the mortgage, so that's where the life insurance/disability insurance come in. Otherwise, I agree that could be examined.
Laying out some rough math:
Using a balance of 54000$ and an annual interest rate of 7.625%, your loans are accruing 11.28$ per day. Or 330$/mo vs. your 400$ payment.
Using a balance of 54000$ and a lower interest rate of 6.625%, your loans would accrue 9.81% per day. or 294$/mo. So you'd be lowering your balance by 106$/mo instead of 70$/mo, or 50% more.

If this worries you, don't get mad or angry. Just use it as more motivation to buckle down and keep throwing more at those loans. For my student loans, I found it very useful to make a spreadsheet (Excel or Google Sheets or whatever you want) and see how much different payment amounts would affect future balances and daily interest accruals.

Regarding life insurance, do you have term or whole life? General thinking is that term life is a useful tool in the right circumstances (don't pay for more coverage than you need) while whole life is wholly garbage.

You don't have to post it here, but if you and your partner sit down and can track every (or at least nearly every) dollar coming in and going out, that might help. And anything that can be trimmed should be trimmed and put towards the loans instead. You're essentially treading water on the loans right now so paying extra towards the loans is how you're going to have to get yourself out of it. Since you mentioned your payments jumping in two years, I roughly calculated how much you'll owe on January 1, 2020 based on some different assumptions:
Status quo (54000$ starting balance, 7.625% interest, 400$/mo payment): 53356.83$
Lowered rate (54000$ starting balance, 6.625% interest, 400$/mo payment): 52507.72$
Same rate, higher payment (54000$ starting balance, 7.625% interest, 650$/mo payment): 48853.87$
Lowered rate, higher payment (54000$ starting balance, 6.625% interest, 650$/mo payment): 48039.02$

Since you asked in the first post what I would do, I would essentially panic, try to examine every expense, and question what's necessary. Because I would see myself living a lifestyle that I can't afford and try to cut back wherever necessary: no more buying coffee out, no eating out, eating very cheaply at home if possible, driving minimal amounts and seeing if that can in turn help reduce car insurance rates, get a cheaper car, etc. Because without something drastically different happening, I would keep paying 400$ a month to only reduce a 54000$ debt by 30$ a month. And that would scare me.

nymeria.stark
Posts: 112
Joined: Wed Jul 20, 2016 9:27 am

Re: Another student loan question

Post by nymeria.stark » Wed Jul 18, 2018 10:34 am

Thanks so much, tch_usa. That math is incredibly helpful, and it makes such a difference to see those numbers. I'll absolutely start seeking out refinancing options, even if they don't shave multiple percentage points off the interest rate.

We have term life insurance-- we know whole life is a crock. :D Our plan is to cancel that once we have enough savings.
Since you asked in the first post what I would do, I would essentially panic, try to examine every expense, and question what's necessary.
You can't imagine how reassuring this is to hear! Yes. OK. It's scary to know the situation is this dire, but it helps solidify the idea that reducing my loan should be an absolute priority. Bonuses, any extra income, everything should get thrown at it until it's gone. And I need to buckle down and question every expense. Thank you!
Just a girl, standing in front of her finances, asking them to make more sense.

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JupiterJones
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Re: Another student loan question

Post by JupiterJones » Wed Jul 18, 2018 10:52 am

Nate79 wrote:
Tue Jul 17, 2018 3:47 pm
Dave Ramsey. Sell the car and get a cheaper one. Claiming you need a reliable car thus require car payments is hog wash.
Yup. I've driven plenty of very reliable cars in my life, and they were all A) used and B) paid for. For that matter, I know people with loans on new cars that have given them no end of trouble.

In other words, "reliable" and "so expensive that I have to borrow money to buy it" are not equivalencies.

So, OP, just imagine: If you didn't have those payments and could instead funnel that money to the student loan, how awesome would that be? Swapping your car out for the cheaper, paid-for car could make that awesomeness a reality!

As far as the term life policy, to what extent does your spouse rely on your income? In other words, if you got run over by a steamroller, would she really need that insurance payout to survive? Or could she get by okay without it? That is, would the insurance merely be the difference between "I can make it, although it will require some changes and things might be a bit tight" and "I can go on living just like I did when Mr. OP was alive"?

If the latter, then I would classify the policy as a luxury item and thus a prime candidate for 86-ing in order to pay down the loan faster.
Stay on target...

AlwaysAStudent
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Re: Another student loan question

Post by AlwaysAStudent » Wed Jul 18, 2018 11:14 am

nymeria.stark wrote:
Tue Jul 17, 2018 2:52 pm
... making car payments and everything else. (The car payments are maybe more than I'd like, but I drive a lot for work and live in a rural area, so I need an incredibly reliable car.) ...
nymeria.stark wrote:
Tue Jul 17, 2018 3:38 pm
... full-time job in PR...
You live on an island, how far is your commute (to a rural area)? If your car broke down, how long would it take you to walk to work or to get somebody to come give you a ride? If you are late to work once, will you be fired? What would happen at work if you didn't have a car, would you lose your job or would they allow you to rent one when needed? Could you ride a bike to work?

I am assuming there is not a lot of money to trade the car in and pay for one in cash, so go trade the car in and get one that has payments that are half of your current payments.

I graduated in 2006 with $30k of student loans @ 7.25%. That interest rate is a killer! I now only have $7k and plan to pay it off this year, otherwise I would be doing anything I could to lower that rate. I also made a similar salary as you for the last 12 years, bought 2 house (one in 2007 before the market crashed), and paid off 3 different car loans (2 of these were used, and 1 was from before graduation). My spouse has only made a very small minimum salary for the last 4 years but before that had a similar salary as I did.

You can pay this off, you just have to want it more than you want that car, or cable TV, or high speed internet, or to eat out, or new clothes, or to have your A/C going all year long, or to spend time writing a pitch when you could be waiting tables someplace. Once you determine what your priorities are life gets much easier.

deltaneutral83
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Re: Another student loan question

Post by deltaneutral83 » Wed Jul 18, 2018 12:35 pm

nymeria.stark wrote:
Tue Jul 17, 2018 2:52 pm
Otherwise, I feel like I'm in OK shape. I have a mortgage, but it's much less than it would cost to rent in my area. I'm getting my 401(k) match at work (4%), making car payments and everything else. (The car payments are maybe more than I'd like, but I drive a lot for work and live in a rural area, so I need an incredibly reliable car.)
Examine this statement very carefully from a psychological and behavioral standpoint. Your explanation is 100% irrelevant and is a terrible justification to your problem. BH in general can run numbers all day long and pop out spreadsheets that will make your head explode for scenarios A/B/C/D etc. etc. But if you don't master the "personal" side of personal finance, it won't matter. My take is that most BH are so methodical about money that they don't even consider psychology as part of money management, which as you can see with the responses you've gotten mostly revolve around mathematics. There are plenty of 7 figure BH that drive used Camrys or Corollas that get the job done just as much as the $30k+ new car. Make this the last time you spend a lot of money a vehicle for the foreseeable future.

PVW
Posts: 471
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Re: Another student loan question

Post by PVW » Wed Jul 18, 2018 12:48 pm

Reality check. Your income alone is about the same as the median household income in the US. Many families are living just fine on that income. If you are struggling to maintain your budget, then you are living beyond your means.

LawEgr1
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Re: Another student loan question

Post by LawEgr1 » Wed Jul 18, 2018 12:58 pm

Here is what Mr / Mrs LawEgr did. One of the two of us had substantial student loan debt, and I'll let you guess who.

Loan debt: 5-7%, ~85k or so

To be fair, the two incomes at the time started at double where you are at and have now increased to triple where you are, but only very recently.


Here is what we did wrong:

Our first mistake was buying a house. I see you did the same thing. :)
Second mistake, as a freshly united couple, was not have good communication on finances.
Third mistake, we didn't join finances
Fourth Mistake, we remodeled the recently purchased house for $35k (OUCH)

So, by the time I had my peanut student loans, her massive law loans and the silly remodel, we had over $120k in debt. I was miserable.

Here is what we did RIGHT (and what I'd recommend)

Although we bought a home, by no means did we overbuy. This was a huge win for us as our mortgage is fairly low given income then and now. (12% down to 8% gross income)
I fully acknowledged her loans were now my loans too. I knew what I was getting in to.
Acknowledged loans suck. I revamped our budget, trim costs where necessary, etc.
Acknowledged we shouldn't have bought the house.
Acknowledged we needed a come to "whatever" talk on finances. As a couple, we are two smart people with two entirely different ideas on how to manage it. We talked, and sometimes it was difficult, but we JOINED finances and became on the same page to attack the loans with great intensity. Marriage is a 100% team effort.

This meant spending almost all disposable income after retirement funding towards those loans.

2.5 years later, they're gone. We're pumped, learned a lot about each other and how to communicate effectively and are now completely on the same page financially which is fantastic.

In retrospect, we're still happy we did the remodel, but we've also been lucky. Neither one of us projected salary increases this early in our careers to be this high. That solved the income problem, and it helped tremendously. But we had a huge case of living above our means for awhile, which also hurt our relationship. Stronger for it now and live well below our means. Granted, higher income helps.

Suggest you get on the same page with the partner and decide how badly you want these gone. Someone mentioned it above - if you don't make something a priority, whatever that is for you, nothing will get done.

As for the car, we had a 2004 and a 2006. Deal with the old one. You'll be just fine.

It hurts, but it also feels so good when complete!

Good luck.

Jablean
Posts: 250
Joined: Sat Jun 02, 2018 2:38 pm

Re: Another student loan question

Post by Jablean » Wed Jul 18, 2018 1:18 pm

nymeria.stark wrote:
Tue Jul 17, 2018 2:52 pm
Hi, all--

I've done some research on the forum on student loans, but I think it's time for me to ask for more personalized advice.

Here's the deal. I have a Federal Direct Graduate Plus student loan from the Department of Education, serviced by Nelnet. I originally borrowed $50,000 in 2008. In 2015, I was kicked off of my income-based repayment program and consolidated my loans in order to restart my payment window.

I currently owe $54,135 (due to the aforementioned income-based repayment plan that didn't cover all of the accruing interest). I'm on a graduated repayment plan, paying about $400 a month, and dreading when it goes up again in two more years. My current interest rate is at 7.625 percent. My credit, despite all of this, is at 759.

Otherwise, I feel like I'm in OK shape. I have a mortgage, but it's much less than it would cost to rent in my area. I'm getting my 401(k) match at work (4%), making car payments and everything else. (The car payments are maybe more than I'd like, but I drive a lot for work and live in a rural area, so I need an incredibly reliable car.) While I know just being able to afford a mortgage/rent and car payments makes me more solvent than many people my age, I don't have much extra each month, and this student loan is this huge weight on my chest. Without it, I'd throw much, much more at my 401(k) or an IRA, start saving for some much-needed home improvements, but I just don't have that option right now.

So. My first question is--what would you all do? How can I make this situation better and stop paying so much interest? How can I give myself some breathing room?

As for what I've done already, I've checked out Common Bond and First Republic, but they don't offer loans in my state. I tried PenFed, but they wouldn't give me a rate because I went to grad school abroad. SoFi and Laurel Road are only offering interest rates a percentage point lower than what I have (or that's what they were offering last time I checked). It feels like nothing I can do--even trying to see if I can squeeze an extra $100 out of my income--will make much of a difference in the grand scheme of things.

Please, any advice is helpful! (Unless it's, "You should have thought of this before you took out the loan." I'm aware.)

Thank you--
What will your payment be going up to in two years? Will you have the car paid off by then?

Is your current interest variable on the student loan or is it locked in?

When you refinance a student loan do they charge a percentage to do it? - For example like points on a mortgage refinance or credit card transfer.

Are you paying the minimum on your mortgage? Remember that those payments may change year to year to adjust for your homeowner's insurance and taxes even when the underlying loan doesn't.

Is your spouse making enough to cover their student loans?

If you pay extra on your student loan now does that reduce any future payments?

But here's the thing - if nothing changes on your income side (for you or your spouse) you could always lower what you are putting into the 401k. It's not ideal but you won't default on the loan.

If you commingle finances with spouse then treat each outflow as a family expense, not individual also.

c1over8
Posts: 201
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Re: Another student loan question

Post by c1over8 » Wed Jul 18, 2018 1:42 pm

Have a friend or family member refer you to sofi, they don't have to be a sofi customer to do so, and you'll both get a bonus. I had a family member refer me (really I did it all myself using their infom with their permission) and refid a small amount with sofi, got a marginally lower rate and between the two of us we either got $400 or $500 in referral/new client bonuses, it has been awhile so the amounts may have changed but I'm confident they still do bonuses. The referrer gets the bigger bonus so you might want to work out with the person whether they will give you the full bonus they get, they keep it, or you split it somehow. My referrer gave it all to me.

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Meaty
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Re: Another student loan question

Post by Meaty » Wed Jul 18, 2018 1:52 pm

delamer wrote:
Tue Jul 17, 2018 3:12 pm
JoeRetire wrote:
Tue Jul 17, 2018 2:58 pm
nymeria.stark wrote:
Tue Jul 17, 2018 2:52 pm
I currently owe $54,135 (due to the aforementioned income-based repayment plan that didn't cover all of the accruing interest). I'm on a graduated repayment plan, paying about $400 a month, and dreading when it goes up again in two more years. My current interest rate is at 7.625 percent.

Otherwise, I feel like I'm in OK shape. I have a mortgage, but it's much less than it would cost to rent in my area. I'm getting my 401(k) match at work (4%), making car payments and everything else.

I don't have much extra each month, and this student loan is this huge weight on my chest.

So. My first question is--what would you all do? How can I make this situation better and stop paying so much interest? How can I give myself some breathing room?
I would do two things:
1) Cut back on the "and everything else". Everyone has some space in the budget they could cut. Dig deep and you'll find some.
2) Get more income. Find a second job (or "side hustle" if you prefer).
This really sums it up — in order to pay off your loans sooner, you can either increase your income or reduce your expenses or both.

If you want to post your current income and expenses, you’ll get some suggestions on how to squeeze more money out to go toward the loans.

Is your housing such that you could get a temporary roommate?
Another vote - get a 2nd job or 6, get on a written budget, cut your lifestyle way back, start paying the debts back smallest to largest
"Discipline equals Freedom" - Jocko Willink

nymeria.stark
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Re: Another student loan question

Post by nymeria.stark » Wed Jul 18, 2018 2:34 pm

PVW wrote:
Wed Jul 18, 2018 12:48 pm
Reality check. Your income alone is about the same as the median household income in the US. Many families are living just fine on that income. If you are struggling to maintain your budget, then you are living beyond your means.
Totally fair. I'll take a closer look at the budget this weekend. I appreciate your input.

(I will add that the cost of living where I am is...equivalent to LA. Rural does not equal cheap, in this case.)
Just a girl, standing in front of her finances, asking them to make more sense.

nymeria.stark
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Re: Another student loan question

Post by nymeria.stark » Wed Jul 18, 2018 2:34 pm

c1over8 wrote:
Wed Jul 18, 2018 1:42 pm
Have a friend or family member refer you to sofi, they don't have to be a sofi customer to do so, and you'll both get a bonus. I had a family member refer me (really I did it all myself using their infom with their permission) and refid a small amount with sofi, got a marginally lower rate and between the two of us we either got $400 or $500 in referral/new client bonuses, it has been awhile so the amounts may have changed but I'm confident they still do bonuses. The referrer gets the bigger bonus so you might want to work out with the person whether they will give you the full bonus they get, they keep it, or you split it somehow. My referrer gave it all to me.
Amazing suggestion, thank you!
Just a girl, standing in front of her finances, asking them to make more sense.

nymeria.stark
Posts: 112
Joined: Wed Jul 20, 2016 9:27 am

Re: Another student loan question

Post by nymeria.stark » Wed Jul 18, 2018 2:42 pm

Jablean wrote:
Wed Jul 18, 2018 1:18 pm
nymeria.stark wrote:
Tue Jul 17, 2018 2:52 pm
Hi, all--

I've done some research on the forum on student loans, but I think it's time for me to ask for more personalized advice.
What will your payment be going up to in two years? Will you have the car paid off by then?

Is your current interest variable on the student loan or is it locked in?

When you refinance a student loan do they charge a percentage to do it? - For example like points on a mortgage refinance or credit card transfer.

Are you paying the minimum on your mortgage? Remember that those payments may change year to year to adjust for your homeowner's insurance and taxes even when the underlying loan doesn't.

Is your spouse making enough to cover their student loans?

If you pay extra on your student loan now does that reduce any future payments?

But here's the thing - if nothing changes on your income side (for you or your spouse) you could always lower what you are putting into the 401k. It's not ideal but you won't default on the loan.

If you commingle finances with spouse then treat each outflow as a family expense, not individual also.
1) $460/month, and sadly, no. But it will be close.

2) Locked in, which is...was a blessing and a curse. I think it would have dropped around 2010, but that's an admittedly uneducated guess. It is what it is.

3) We're absolutely paying the mortgage on schedule. That, right now, is our top priority. If we had to sell, we'd end up having to pay probably $500 more a month in rent than on our mortgage.

4) Yep, those loans are the least of our worries. It's mine that probably could be improved.

5) Yep! And it goes to the principle, not the accrued interest, so that's good.

There's no real danger of defaulting on the loan, thankfully. And generally, we do treat outflows as a family expense...just, again, my spouse is more private and I was trying to do this subtly and individually. :wink:
Just a girl, standing in front of her finances, asking them to make more sense.

nymeria.stark
Posts: 112
Joined: Wed Jul 20, 2016 9:27 am

Re: Another student loan question

Post by nymeria.stark » Wed Jul 18, 2018 2:48 pm

LawEgr1 wrote:
Wed Jul 18, 2018 12:58 pm
Here is what Mr / Mrs LawEgr did. One of the two of us had substantial student loan debt, and I'll let you guess who.

...Acknowledged we needed a come to "whatever" talk on finances. As a couple, we are two smart people with two entirely different ideas on how to manage it. We talked, and sometimes it was difficult, but we JOINED finances and became on the same page to attack the loans with great intensity. Marriage is a 100% team effort.

...Suggest you get on the same page with the partner and decide how badly you want these gone. Someone mentioned it above - if you don't make something a priority, whatever that is for you, nothing will get done.

As for the car, we had a 2004 and a 2006. Deal with the old one. You'll be just fine.

It hurts, but it also feels so good when complete!

Good luck.
Thank you so much for this thoughtful response, LawEgr1. You seem to have hit on the crux of the issue. Spouse and I are two smart people with different views on how to manage finances. We do try to align our financial goals, but as others on here have pointed out, perhaps our joint priorities are a little out of whack.

I'd love more details on how you developed joint goals and priorities, if you don't mind! This is absolutely an area where we can improve.
Just a girl, standing in front of her finances, asking them to make more sense.

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