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23 yr old teacher with $50,000 debt

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    23 yr old teacher with $50,000 debt

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    Last edited by itaalia186; 02-01-2010, 07:22 PM.

    #2
    As long as you are living with your parents, take advantage of your reduced expenses. Continue saving for the Emergency Fund, then save up for the car but only buy the car when you need it (no need to spend the money if your current car is still running ok). At that point, seriously hit your student loans. It's been a while since I've had them ( ), but I know that I had several separate loans. I would apply the extra principle to the loan with the highest rate and apply all the money to that loan. Pay the minimums on the other loans. If you attack them in much the same way that you would credit card debt, this will help lower your monthly student loan payments when you actually do move into your own place.

    Also, you could also get a part time job to help accelerate the process. Perhaps you could tutor?

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      #3
      I have 12 separate loans right now but I have almost paid off one of the smaller ones ($4000). I'm trying to pay off the smaller loans with highest rates first. I have thought about second jobs but most of my experience is with kids and I don't want to burn out at my main job by spending too much time with kids. I'm considering waitressing, retail, or something. However I make the most money working with kids.

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        #4
        I thought I remembered hearing about a program where teachers who worked for x years in the public school system could get their student loans forgiven. Maybe that is only in certain states though.

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          #5
          I would wait until the current 'student loan' bills in Congress settle out to see if you can consolidate them into one low-cost loan - also, as mentioned above, there is a program where you work in a special area (I say special because it usually involves an Indian Reservation or inner city along with other possibilities that you need to research) you might be able to get your loans forgiven.

          The reason I suggest waiting is that some of the loan originators will mess with your loan (like demanding immediate full payment then tacking on fees).

          Best of luck - teachers shape our futures.
          I YQ YQ R

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            #6
            Teacher loan forgiveness does exist, but it's a doozie trying to get it. Here's some info:

            Student Aid on the Web

            You have to work in a high needs area such as math, science, special education or in an under performing school, I believe.

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              #7
              Originally posted by itaalia186 View Post
              I just graduated college this past May and now have student loans to pay off in the amount of $50,000. I am a teacher so my salary is significantly less than this annually. (Only after graduating did I realize that its not a good idea to accrue more loans than you will make your first year working full time!) In any case I have always been good with money and have no car loans and NO credit cards. I have only ever used a debit card. I am looking for suggestions and ideas on how I can try to pay this down as quickly as possible. I live with my parents for now and pay them a small amount in rent. My other bills are few for the time being but I'm hoping to move out soon which will raise my expenses greatly. Right now I'm trying to put $1500 a month on my debt and $500 in savings. (So far I have put $3000 on my loans.)
              I have $1700 in savings right now and my goal is about $2500 for an emergency fund. Once I have that I will start saving for a car as mine is very old and probably wont run long. My goal for that is about $4-6,000. Once I have done these things I REALLY want to move out on my own but at that time I will have to greatly reduce the amount I'm putting on my student loans and will probably only be able to pay a couple hundred over my minimum payment if that. I know this probably seems like nothing to those of you who have kids and mortgages and all but I am hoping by starting young I won't end up getting married and starting a family already in a significant amount of debt. I want this gone before I start having kids!!!! Any suggestions would be greatly appreciated.
              (I just started reading Dave Ramsey's book and I'm trying to apply some of his principals)
              I have an engineering degree, graduated in 1997 with about 90k in debt, and my starting salary was 39k. And I did not live at home either...

              Do not let the 50k being more than your salary scare you. $3000 in 2 months on a 50k debt is impressive... you could cool off the extra payments if you wanted to move out sooner.

              Having debt like education debt is OK. Took me 8 years to pay off my debt (standard terms are 10 years of payments).

              Comment


                #8
                The way you write, it appears you have $2,000 a month in extra income. $1,700 in savings, and $47,000 on student loans. You have a goal of $2,500 in savings. If you continue to put the $500 a month into savings, now for your Emergency Fund, and then once that is done towards a used car, by the end of the year, you will have enough for the used car, and still have paid off an additional $15,000+ in student loans. While that still leaves you in the ballpark of $30,000 in student loans, you will have paid off 40% of them in a year, and acquired a more reliable vehicle. If you can stick out living with Mom and Dad until you're 25 and pick up a side job, you could realistically pay off all of your student loans over the course of the next two years, even with the interest. I think a lot for you right now is the sticker shock of seeing $50,000 as a number that you owe, and not on a mortgage. It is a lot of money, but you obviously have a plan which makes it much more manageable.

                If you are paying interest on your student loans, you might shop around to banks for a low interest rate and take out a big consolidation loan to pay off the student loans with interest, but on a lower rate.

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                  #9
                  Originally posted by itaalia186 View Post
                  (Only after graduating did I realize that its not a good idea to accrue more loans than you will make your first year working full time!)
                  Not sure where you got that idea but there would be few college graduates these days if it were the case.

                  Based on what you've written you are in really good shape.

                  I'm sure you've pulled out a calculator and determined that if you put $1500 a month on a $47,000 debt will be gone in about 32 months. I would work very hard to maintain that payment rate. Yes, sure the interest rate is probably low but you owe it so get rid of it.

                  Try to find an extra job or two that would cover the expenses you'd have if you moved out of your parents home. Put the move off at least a year if you could.

                  Good job. Keep it up.

                  Leo

                  Comment


                    #10
                    Originally posted by GrimJack View Post
                    The reason I suggest waiting is that some of the loan originators will mess with your loan (like demanding immediate full payment then tacking on fees).
                    Do they ever! My DIL who is a chiropractor, just got notice that her her student loan payment has been increased to $3,000 a month! She makes decent money and my son makes good money as a manager at AT&T, but really... this is ludicrous! And they won't even work with them on it.

                    Do EVERYTHING you can to get these loans paid down. There are many options for second jobs, or working online.

                    Dee

                    Comment


                      #11
                      Originally posted by Snippa View Post
                      Do they ever! My DIL who is a chiropractor, just got notice that her her student loan payment has been increased to $3,000 a month! She makes decent money and my son makes good money as a manager at AT&T, but really... this is ludicrous! And they won't even work with them on it.

                      Do EVERYTHING you can to get these loans paid down. There are many options for second jobs, or working online.

                      Dee
                      You're kidding, that's crazy! Is it only private loan companies that can do this? Most of our student loans are with Sallie Mae or Direct Loan (federal govt), but if they ever called in our markers all at once we'd be screwed! We have over $70K total.

                      Comment


                        #12
                        Originally posted by itaalia186 View Post
                        I just graduated college this past May and now have student loans to pay off in the amount of $50,000. I am a teacher so my salary is significantly less than this annually. (Only after graduating did I realize that its not a good idea to accrue more loans than you will make your first year working full time!) In any case I have always been good with money and have no car loans and NO credit cards. I have only ever used a debit card. I am looking for suggestions and ideas on how I can try to pay this down as quickly as possible. I live with my parents for now and pay them a small amount in rent. My other bills are few for the time being but I'm hoping to move out soon which will raise my expenses greatly. Right now I'm trying to put $1500 a month on my debt and $500 in savings. (So far I have put $3000 on my loans.)
                        I have $1700 in savings right now and my goal is about $2500 for an emergency fund. Once I have that I will start saving for a car as mine is very old and probably wont run long. My goal for that is about $4-6,000. Once I have done these things I REALLY want to move out on my own but at that time I will have to greatly reduce the amount I'm putting on my student loans and will probably only be able to pay a couple hundred over my minimum payment if that. I know this probably seems like nothing to those of you who have kids and mortgages and all but I am hoping by starting young I won't end up getting married and starting a family already in a significant amount of debt. I want this gone before I start having kids!!!! Any suggestions would be greatly appreciated.
                        (I just started reading Dave Ramsey's book and I'm trying to apply some of his principals)
                        You are young, You hav a lot of time to pay off your debt. So don't worry too much about it. Just don't take more loan or make big purchases like car or a house until you've paid at least 70% of your loan.

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                          #13
                          I know it is too much difficult for you to adjust in such a small salary and you just cannot help it. I'll suggest you take Tuition at home or you might go into private coaching after school this will help you to clear your debt as early as possible.

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