How did (or ARE you) paying off your student loans?

[Frugal]

Would like to hear from those in my situation. Have been out of school a while now, but still have lingering student loans from the gov't. I owe less than $20,000, and more than $10,000.

How would you deal with this, in a situation where your spouse works, but you were laid off in the fall and still unable to find work?

Thanks for any suggestions.

p.s. I paid the debt down as aggressively as I could before I got married, but I have mostly had one-two part-time jobs at a time, instead of one solid and steady full-time job. Have tried doing everything I can to skimp and put money towards the principal balance while they are in deferment. Still not seeing the principal move much, and right now I cannot afford to make any payments on them, since they are in an unemployment deferment that I will have to renew in the late spring/early summer.

[littleroc02us]

What other debt do you have and what is your status for finding another job? What is your budget, etc???

[creditcardfree]

I would suggest looking at ways to trim your expenses, so that extra funds can go to the loan. Even if you send in $5 it is less you repay later and less you pay interest on. It all adds up.

Can you pet or house sit, walk dogs, get a newspaper route, mow lawns, babysit, or some other service you might be good at?

[jpg7n16]

Originally Posted by Frugal

Would like to hear from those in my situation. Have been out of school a while now, but still have lingering student loans from the gov't. I owe less than $20,000, and more than $10,000.

How would you deal with this, in a situation where your spouse works, but you were laid off in the fall and still unable to find work?

Hearing this, the only thing that matters is that you are out of work - so you should pay the minimums and keep as much as you can in cash for daily living until you find steady employment again. I don't know if you'd qualify for deferrment, since your spouse has an income, but you could check.

Then your priority is: find job. Until that happens, you pay the minimums and keep money in cash.

Once you find job, then take the money you've saved up in cash and pay off the highest interest rate first. Snowball and attack the debt from highest rate to lowest.


What am I personally doing? I paid off all my student loans over 5%, and I'm intentionally paying the minimums on my 2.2% student loan. Whatever money I could have used to pay extra on my loan, I am instead investing in a liquid brokerage account (not an IRA - the Roth is in addition to this brokerage account). Still decently liquid in the event of an emergency, but earning much more than the 2%.

[BMEPhDinCO]

If you are out of work, the loans shouldn't be something you want to think about, beyond minimum payments if necessary. I would probably pay the interest at least, but don't worry about the principle until you get a steady job.

For myself, I paid everything off except my loans at 3.5% and those went into deferment when I went back to school.

You could also consider applying for the income based payment plan - I believe after 25 years the loans are gone and they have to work with what you can afford now.

But since you said you already paid off some of them, just go slow on the rest.

[Frugal]

Well, even though my loans were in deferment, I proceeded to pay off a large fraction of the student loans, even though a lot remains. I put about $1,000-2,000 towards it after being suddenly laid off, and this was a mistake. The fact is, I hate debt in any form, and can't stand to see the balance just sit there, so sometimes I just make a payment, even if I don't have to.

The only other debt we have is our mortgage, which we recently (last six months) obtained. It is not the largest mortgage you would ever see, certainly, because we saved and put EVERYTHING towards a huge down payment (again, right before I got laid off!).

Working full-time does not look like it will happen for me...although I still look, and apply. Would settle for part-time right now. I still save everything I can to try to pay down my student loans.

Even when they are in deferment, I can tell you it gives a certain sense of satisfaction to see the principal driven down, bit by bit, dollar by dollar, before interest begins accruing again.

Thanks all for your advice...still curious to hear of more peoples' experience.

p.s. And yes, I already paid off the loans with highest interest. I did this first, which was smart. Once the interest begins accruing again, it will be at about 4.6-5.5%, maybe a little less. I paid off the 6.8% interest rate student loans, and the one Perkins loan I had which I hated! They did help me get my BA diploma...the use it is now in the job market!

[littleroc02us]

When my wife and I got married I was working on paying off school loans and that was all I had left. It was like 25k. We had 18k in a money market fund doing nothing so we took that out and paid most of the loan off. Then we worked our butt off and finished it within the year. Now we have no debt besides our mortgage.

[Frugal]

Thanks, that is my goal to do, pay it off in two years, since I have about double what you had left. I don't have a money market account to pay it down with, or really any resources right now, since I was laid off. I will pay if off eventually, though. Know there are many, even some reading this, probably in my situation.

[StepRightUp]

Misread posts and tried to delete my reply.

[Shewillbemine]

I asked for (and was given) a massive raise my 5th year into my career. I brought up my $17,000 student loan as part of my reason for needing a raise and my boss paid it off in one check.

[greenskeeper]

When I graduated I threw everything I had at the loan by sending in extra principal every month. Of course at the time I had no car payment, no credit card debt, no mortgage.

After paying off the student loan I promptly purchased my first house....and the cycle begins!

[CCCFree]

What ever you do do not pay off you student loans, or try and consolidate all your debt by using a credit card.

[khosta]

I graduated a couple of years ago and I have about $10,000 in student loans.... I wish I were able to pay them off aggressively - I can only pay the minimum right now. Try and find some sort of part time job and take that money to pay your loans... anything is better than nothing!

[walker.kenny]

Have you thought of taking up any online jobs like tutoring etc? There are lots of online jobs like data entry that you can do in your spare time.