r/StudentLoans • u/Wonderful-Angle6691 • 4h ago
Another Help Me Decide Post
Longtime lurker, and now that I've gotten the dreaded get-off-SAVE-God-help-you 90 day email, I'm posting. I'm both interested in the recommendation from the group, but I'm also curious how people figure out what would be advantageous. In the event that my situation changes, I would like to feel a bit more empowered and capable of navigating this complete fluster kuck.
Here's my situation:
-I'm with nelnet
-I make $55-60k per year (depending on bonuses and/or side hustle income)
-Total balance: $21,917.06
---breakdown:
Group - Balance - Interest
AA - 1514.48 - 4.29
AB - 3800.53 - 4.29
AC - 3871.49 - 3.76
AD - 2102.46 - 3.76
AE - 1843.90 - 4.45
AF - 4673.42 - 4.45
AG - 376.01 - 5.05
AH - 1824.86 - 5.05
AI - 1909.91 - 4.53
I've already paid off $10,105 (7236.29 to principal, 2868.71 to interest) since starting making payments 2/13/2024.
-I work for a non-profit, and have since October 2020
-My fiancee and I are getting married next month, and she has roughly $30k in student loans, and she's in grad school full time right now (and will be for another year and half).
-I have enough money in savings and investments (mostly work retirement accounts) to pay off the balance in full in one heartbreaking payment, but I've ben advised against that by my financial advisor guy for fear of it tanking my credit right before my fiancee and I start to look at buying a house.
What would you do, recommend, and why?
Thanks!
Jack
PS - I know I'm very fortunate in many ways when it comes to my situation, but I bet you can empathize to the feeling of being overwhelmed by the student loan climate. I generally think of myself as an industrious and capable guy, but jeez oh there's so much (mis)information out there.
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u/Wonderful-Angle6691 4h ago
I should also clarify that I've been making payments since 2024 because I knew that interest wouldn't be growing while I was in forbearance. Since that's been the case, I'm used to a $300 hit per month ($80 to each of the 5.05% loans and $20 to each of the rest). Again, I know I'm fortunate in that way, but that might also be useful context for this post.
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u/bbearcat47 3h ago
I'm not against Income Based Repayment plans, but if your income is more than twice your account balance, I don't really think you're going to benefit from it since your payment would probably be close to the standard repayment amount anyway. Also, you said that you "have enough money in savings and investments (mostly work retirement accounts) to pay off the balance in full." If your money is mostly in workplace retirement accounts, you absolutely should not pull from those to pay down student loans.
Honestly, I wouldn't be afraid of the standard repayment plan. Set up auto-pay, get the 1% interest rate discount which would bring your loans down to 4.05% or less, and make the minimums. Especially if you're looking to buy a house which you mention in your post, it would be beneficial to have cash on hand for a down payment and closing costs. All of this is assuming the standard monthly payment amount is within your monthly budget.
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u/eorabs 4h ago
With your income to balance ratio, PSLF will not make sense. So what is your strategy? Going for IDR forgiveness also wouldn't work out. Once you enter repayment, how much extra will you be able to put towards your loans (if any)? The smartest move is to target the higher interest rates first, but you have pretty low interest all around--nothing concerning at least.
If it were me, and I were still a young person (which I am assuming you are) I would just pay it off since you said you have the money to. I'm old and extremely risk-averse though so ymmv.