what to do with my money?

**siggy_freud** · 03-22-2013, 05:18 AM

Well, the be frank no one forced you to take out 190k in student loans. That was a decision on your part, and now you have to face the consequences of that. The government is making back what they're due. You signed a paper before getting the loan detailing all of this information. FWIW, if it's a government loan you shouldn't be accruing more interest than you're paying off. You ARE paying on principle, just not very much right now.

190k seems like a lot for chiropractic school, especially given the projected salary of the average professional in that field.

I believe if you're married it's going to look at the joint debt to income ratio, rather than just hers or yours.

Honestly I'd still try and aggressively pay down your student loans. They're the only thing you can't get away from in terms of debt.

**feh** · 03-22-2013, 06:14 AM

Focus on paying off the student loans. IMO, you shouldn't be thinking about buying a house with that much debt hanging over your head.

**jpg7n16** · 03-22-2013, 06:36 AM

Originally posted by today View Post

Hello! I am new here, and I have a big question.

I am 2 years out of graduating from chiropractic school. I have 190K student debt at 6.8% interest. This is essentially a mortgage. I currently own a practice that netted 45k last year. This year I hope to net 55-60K. So, I know for sure I cannot pay off this loan on that income

Well, not in a single year no, but over time you certainly can pay it off.

My question is this. Do I pay 2,000 per month and live in poverty for 10 years, which will leave me at age 42 with no house, no retirement? I would rather keep paying the minimum amount and save up for a house. But will i be able to get a home loan? Should I try to buy a house with cash? My debt to income ration is a joke, should I hold off on getting married? My spouse makes 40K with NO DEBT. So we could put the home loan in her name. Is it different if we are married?

Why do you act like owning a home is the be all and end all of life? You are not in a financial position to buy a home right now. If you can't support the debt you have, how will you support more? And if you're gettng married you SHARE your financial situation, so she wouldn't be in a position to get a home either. Maybe the bank would let her, but it's not a good position to be in.

What should I do with my money?

Make a realistic budget to get an EF set aside and then aggressively pay down your debts.

I have have 40K saved towards a house.

Wait a sec, you said you were barely able to scrape by paying the min -- how were you able to build up $40k in cash??

You're not as broke as you claim. If you can save $40k towards a home, you can certainly pay down on your debts.

I dont want to just hand it to my student loan interest, it would be a drop in the bucket, and then I would have nothing!

Ummm, I'm not sure how math intensive chiropractic school is, but $40k/$190k = 21%. Which I don't care who you are, that's much more than "a drop in the bucket"

You should figure out how much you would need to cover your expenses for 4-5 months and keep that in cash, the rest of your "house" savings, I'd pay towards your SL debt.

Why does the government get to make money off of me the rest of my life? I pay taxes!

See Siggy's post.

Did you not consider the cost of the school versus what you would realistically expect to earn with your degree BEFORE you went to school?? Do you not know that you paid your college expenses by borrowing money from the government??

What does the fact that you pay taxes have to do with paying back the money you borrowed?

"Why should I have to pay on my mortgage for the rest of my life? I pay taxes too!" -- ummm because you borrowed the money to buy a house and have to pay back what you borrow?

From: http://dictionary.reference.com/browse/loan?s=t

loan
2. noun something lent or furnished on condition of being returned, especially a sum of money lent at interest: a $1000 loan at 10 percent interest.

**today** · 03-22-2013, 08:39 AM

I dont think you guys understand my question...

I dont think you guys understand my question...

I currently pay rent of 900/month. So if I owned a house at least this money would be going towards something I own. IT ABSOLUTELY MAKES SENSe FOR ME TO TRY AND BUY A HOUSE!!! Why should I continue to pay rent?

Second, You say I have to face the consequences. WHAT CONSEQUENCES? As far as I can see there are no consequences to NOT paying off your student debt. However, there are very serious consequences to not having any money to buy a house.

Third, I am indeed paying interest. The original loan was 165000. but in two years it has gone to 190000. I just fail to see why I should pay any more than the IBR minimum. The loan disappears if I die, and they told me the whole loan is forgiven in 20 years if I continue making minimum payments.

Thank you to the person who gave me a vague pseudo answer on what happens if I get married. Seems noone on here has any better ideas than I do. Creative answers like "pay it back" "its your own fault" can please be kept to yourself. The gov is making money off of me. I add more to my community than 99% of people. My business employs people. My business gives to charities.

A little surprised in the lack of creative ideas I am getting back on here. Guess I will continue to shove money under the mattress.

**feh** · 03-22-2013, 08:51 AM

Originally posted by today View Post

I dont think you guys understand my question...

I currently pay rent of 900/month. So if I owned a house at least this money would be going towards something I own. IT ABSOLUTELY MAKES SENSe FOR ME TO TRY AND BUY A HOUSE!!! Why should I continue to pay rent?

Second, You say I have to face the consequences. WHAT CONSEQUENCES? As far as I can see there are no consequences to NOT paying off your student debt. However, there are very serious consequences to not having any money to buy a house.

Third, I am indeed paying interest. The original loan was 165000. but in two years it has gone to 190000. I just fail to see why I should pay any more than the IBR minimum. The loan disappears if I die, and they told me the whole loan is forgiven in 20 years if I continue making minimum payments.

Thank you to the person who gave me a vague pseudo answer on what happens if I get married. Seems noone on here has any better ideas than I do. Creative answers like "pay it back" "its your own fault" can please be kept to yourself. The gov is making money off of me. I add more to my community than 99% of people. My business employs people. My business gives to charities.

A little surprised in the lack of creative ideas I am getting back on here. Guess I will continue to shove money under the mattress.

If you don't feel morally responsible to pay your debts, then don't expect to get much help. Just about everybody here takes that kind of thing seriously.

If you choose not to repay it, do you know who you're stiffing? All of us. And your neighbors. And your family.

**BMEPhDinCO** · 03-22-2013, 09:00 AM

If your practice brings in $50k NET every year- live off your GF/Fiance/Wife for 4 years and your loan is gone - sure it's tough but it's fast.

Not sure what kind of creative answer you are looking for - perhaps you could volunteer for medical care in a third world country, some of those programs pay off student loans in exchange for 3-5 years of work.

Otherwise, just buckle down, pay the loans, don't worry about the house right now. It is NOT the most important thing and $900 a month rent isn't the end of the world. Concequences of not paying loans include a trashed credit report - that leads to no house, no CC, no car, no rental ability, etc...

**phantom** · 03-22-2013, 09:33 AM

In my opinion, income based repayment and eventual student loan forgiveness should only be used by people who are completely unable to actually repay their debt. While your debt is certainly going to be difficult to repay, it doesn't seem impossible, so I don't think you should go that route.

But, even without my moral objection, I would still be leery of the idea. The trouble is that you're relying on special laws regarding student loans rather than something that is written into the terms of your loans. These laws could change at any time. In recent years, they have been changing to make things easier on borrowers like yourself, but there's nothing stopping them from changing in the other direction at some time before you hit the forgiveness point. If you continue to make payments that don't even touch the principal, you could find yourself in a much bigger mess than you are right now, should the laws change. That isn't something I would want to gamble on. Even if the laws don't change, you're still betting that your income will stay low enough for you to continue to qualify for the income based repayment and the forgiveness. As long as you own your own business, I suppose you can control your income to a large degree. But, I still don't like the idea of betting against earning more money.

**parafly** · 03-22-2013, 09:35 AM

Originally posted by today View Post

The original loan was 165000. but in two years it has gone to 190000.

This doesn't make any sense. It's simply not how loan terms and payments work. When you make your monthly payment on your student loan, a certain percentage goes toward interest and a certain percentage goes toward principal. At this point in your loan term, the principal should be decreasing slowly, but it certainly should not be increasing.

To answer your question, my advise is to pay down your student loan aggressively, and do not take on more debt for a house until you are in a much better financial position. It may not be creative or what you want to hear, but it's the financially sound thing to do.

**today** · 03-22-2013, 10:19 AM

...

Parafly. Thats how it is. IBR doesnt touch principle. I just flush my money every month. $350 per month payment flushed into interest. No principle. I will never be debt free.

I thought when I took this debt that it would be like $400 per month for a couple years... not $2000 pre month for ten years. Or 1200 per month for 30 years!!!! They should have known not to give me that kind of money. Thats the gov's fault.

THanks for everyone on here. I will try to increase the amount paid so at least my loan grows at a less fast pace. But I really dont see the point of putting anything more towards it. But I will, just in case for some reason laws change like phantom was saying.

I truly feel no moral obligation to pay anything more than the principle. Which I am sure they will drage out of me over the next 20-50 years.

Thanks all! Except the person who said that me not paying the loans back quickly is damaging my friends and family... what a load of crud. Have you not been watching the news? I am in better finances than our nation. And my friends and family are far better off for me NOT paying back every shred of income I earn. So you sir can shut the f up.

Go Heels in the tourney!

**parafly** · 03-22-2013, 10:32 AM

Originally posted by today View Post

Parafly. Thats how it is. IBR doesnt touch principle. I just flush my money every month. $350 per month payment flushed into interest. No principle. I will never be debt free.

I was unfamiliar with IBR so I looked it up. Here's what I found:

In some situations, your reduced payment under IBR may not cover the interest on your loans. If so, the government will pay that interest on your Subsidized Stafford Loans for your first three years in IBR. After three years and for other loan types, the interest will be added to the total amount you owe.

If you do not have Subsidized Stafford loans, you are correct, and your principal may increase under IBR if you are not paying enough to cover the full interest.

I thought when I took this debt that it would be like $400 per month for a couple years

Unfortunately, this was a very poor analysis and assumption on your part. $400 per month for two years is only $9600. Why would you think that this would cover a $165,000 debt?

**jpg7n16** · 03-22-2013, 10:55 AM

Originally posted by today View Post

I dont think you guys understand my question...

I currently pay rent of 900/month. So if I owned a house at least this money would be going towards something I own. IT ABSOLUTELY MAKES SENSe FOR ME TO TRY AND BUY A HOUSE!!! Why should I continue to pay rent?

Right now your money goes to pay rent. Benefiting the landlord.

If you buy a house by means of a mortgage, your money goes to a bank to pay interest on the money you borrowed to buy the home. It's not benefiting you, it's benefiting the BANK.

So either way, you lose the money. Congrats.

Second, You say I have to face the consequences. WHAT CONSEQUENCES? As far as I can see there are no consequences to NOT paying off your student debt. However, there are very serious consequences to not having any money to buy a house.

If you borrow money, you should pay it back. The "consequence" of borrowing money to pay for tuition, is that you have to pay back the money you borrowed.

It's not the government out to get you, it's paying back what you borrowed from the government.

Thank you to the person who gave me a vague pseudo answer on what happens if I get married. Seems noone on here has any better ideas than I do. Creative answers like "pay it back" "its your own fault" can please be kept to yourself.

This isn't a complicated question. It's actually really easy. Trim your budget, make larger payments. That's the way out of debt.

There's no magic here. Work on paying back what you owe.

Again, if you were able to build up $40k, then you are able to pay more than the min.

I feel like I'm talking to this guy right now: http://www.youtube.com/watch?v=HtVs7J_wq28

The gov is making money off of me. I add more to my community than 99% of people. My business employs people. My business gives to charities.

Who cares what you do for your community? That has nothing to do with paying back a loan.

Student loans are not a gift. College is not a charity program. Stop whining about the government.

Did you borrow the money to pay for your tuition or did you not? Since you graduated, you have received the education you paid for. You can't return your education, and you have to pay your debts. It's not complicated.

If anyone else borrowed $190k (for a house, a business, school, etc.), wouldn't you expect them to pay it back? Then why not you?

A little surprised in the lack of creative ideas I am getting back on here. Guess I will continue to shove money under the mattress.

Best of luck to you.

You just don't want to pay back what you borrowed, and so I have no respect for you. Good luck figuring things out on your own.

**today** · 03-22-2013, 11:06 AM

Originally posted by parafly View Post

Why would you think that this would cover a $165,000 debt?

It is extremely hard to communicate with the federal government. I truly have no idea what kind of loans I have. I know they were consolidated by my school into direct loans at one point. I was focused for four years on dissection of humans, adjusting the spine manually so as not to hurt anyone, and learning to read xrays. The lending was all taken care of by the fin aid office. They just billed the tuition and the govt paid. I got a small amount to help with rent. But, contrary to how it seems here, I dont usually give two cruds about this debt. Trust me, now I am very familiar with how student loans are a scam. But they also are the reason why my life is very full and happy. THe last thing I want to do though is dump money into some imaginary interest hole. Especially when I see how the govt spends their money. I was just wondering if anyone on here had any ideas for me. Im just going to buy a house with cash and a small loan from the owner. No mortgage. Maybe I wont get social security payments when Im old. Maybe my loans will be forgiven. Maybe my practice will take off and these loans will become very easy to pay off. I really hope that happens. Either way, there seems to be no consequences for my friends or family, other than every so often I think about it and it bugs me a bit to the point that it distracts me from filing insurance claims. LOL We really do live in a great nation.

**WellKeptWallet** · 03-22-2013, 02:33 PM

Pay Off Your Student Loan

According to Salary.com, the average Chiropractor makes about $150,000 per year. That being the case, once your business picks up you will be able to pay off your debt fairly quickly. I know it can be challenging to have a long term perspective, but it seems like you will be able to pay off your student loans and buy a house in the next 5 years.

**kork13** · 03-22-2013, 03:03 PM

Originally posted by BMEPhDinCO View Post

If your practice brings in $50k NET every year- live off your GF/Fiance/Wife for 4 years and your loan is gone - sure it's tough but it's fast.

I think that's your best option. If you can both live off of the one income, you can focus a huge portion of your own income toward your student loans. Yes -- $40k/yr is not alot to live off of. But entire families with kids get by on less. And once your loans are paid off (after just a few years), you will have incredible flexibility -- if you can keep your expenses low after the payoff, you can save up the money VERY quickly for a healthy downpayment on whatever house you may desire, save up for retirement, and reach all the rest of your goals. If you resign yourself to being saddled with these loans for the rest of your life, how will you ever actually get ahead? The debts are large, but in spite of them, you can manage them with the right attitude.

Also, I would strongly recommend reducing your debt load with some of your cash savings. Keep a decent amount as an emergency fund ($20k-$25k), but you can use the rest to reduce your debt load. Doing so will only speed up your loan payoff.

what to do with my money?