I will be graduating in May with 193800 (only med school debt, includes current accrued interest and principal.) These are primarily unsubsidized federal loans at an average interest rate of 6.3%. My household (2ppl, married) income is 85K. FYI, we have maxed out retirement investments, have a 6 month emergency fund, etc.
Due to my high debt burden, I qualify for Income driven repayment plans although I have the means and desire to have my loans paid off in 10 years. (I am not interested in PSLF.) Based on the studentloan.gov website, my montly payment for the standard 10y plan is: 2109/month. Based on this years income, my PAYE monthly payment is: 509/month. (I understand this will change over time.) However, regardless of what I choose, I will make payments of ~22o0/month.
According to my COM financial advisor, interest does not capitalize if you choose an income driven plan. Thus because I qualify, she suggested that I choose PAYE, but actually make the higher monthly payments. While it makes sense to me that with this plan I would save some money in the end, I would really love to see some numbers. So...
How often is interest capitalized for federal unsubsidized direct loans? How can I estimate total amount paid at the end of the 10 years for each plan (standard and PAYE) if I make monthly payments of 2200? How much would I save? Would the paperwork be worth the savings?
So far I have not found a spreadsheet to help me estimate, and I fear I am not savvy enough to make my own. My head starts to spin with all of this stuff!
If anyone could please help me, I would greatly appreciate it!
Due to my high debt burden, I qualify for Income driven repayment plans although I have the means and desire to have my loans paid off in 10 years. (I am not interested in PSLF.) Based on the studentloan.gov website, my montly payment for the standard 10y plan is: 2109/month. Based on this years income, my PAYE monthly payment is: 509/month. (I understand this will change over time.) However, regardless of what I choose, I will make payments of ~22o0/month.
According to my COM financial advisor, interest does not capitalize if you choose an income driven plan. Thus because I qualify, she suggested that I choose PAYE, but actually make the higher monthly payments. While it makes sense to me that with this plan I would save some money in the end, I would really love to see some numbers. So...
How often is interest capitalized for federal unsubsidized direct loans? How can I estimate total amount paid at the end of the 10 years for each plan (standard and PAYE) if I make monthly payments of 2200? How much would I save? Would the paperwork be worth the savings?
So far I have not found a spreadsheet to help me estimate, and I fear I am not savvy enough to make my own. My head starts to spin with all of this stuff!
If anyone could please help me, I would greatly appreciate it!
