How to tackle a 300,000 loan?

[Twentytwelve2]

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REPAYE pays 100% of unpaid interest for the first 3 years then 50% after that on subsidized loans while also paying 50% of the unpaid interest on your unsubsidized loans starting when you enter the program.

I checked my loan account and I have ~13,000 in interest, totaling my loan to 300,000. I am under REPAYE.

 

[iggles]

I checked my loan account and I have ~13,000 in interest, totaling my loan to 300,000. I am under REPAYE.

That's because the large bulk of your loans are unsubsidized which start accruing interest immediately upon the loan being distributed to you. REPAYE only kicked in upon graduation and after your 6 month grace period on loan repayment ended.

 

[Twentytwelve2]

That's because the large bulk of your loans are unsubsidized which start accruing interest immediately upon the loan being distributed to you. REPAYE only kicked in upon graduation and after your 6 month grace period on loan repayment ended.

Appreciate the info iggles! I will stay on REPAYE and aggressively pay my loans off. I considered refinancing but not anymore. I hope to pay it off in 4-5 years! Even sooner if I can increase cash flow somehow.

 

[Modest_anteater]

Emergency fund should be at least 6 months of expenses. So $10k-15k.


Which 3-year school is $75k by the end? Double that is the norm.

School of Pharmacy Tuition and Financial Aid - LECOM Education System
Texas AandM
In-State $7,950 USD
Out-of-State $13,350 USD
Lots of schools are ~75k

If you are paying "double 75k" you are being scammed...

 

[Dred Pirate]

School of Pharmacy Tuition and Financial Aid - LECOM Education System
Texas AandM
In-State $7,950 USD
Out-of-State $13,350 USD
Lots of schools are ~75k

If you are paying "double 75k" you are being scammed...

exactly - to many people are going to the new private schools (I made the mistake of a private school and ended up with 110k loans - I messed up - but luckily low interest rate saved me) Plus to many school flaunt dual degree programs that are a waste of money and people take too much out for living expenses. Heck - I see so many that don't work!! (getting off of grumpy old man phase)

 

[Modest_anteater]

exactly - to many people are going to the new private schools (I made the mistake of a private school and ended up with 110k loans - I messed up - but luckily low interest rate saved me) Plus to many school flaunt dual degree programs that are a waste of money and people take too much out for living expenses. Heck - I see so many that don't work!! (getting off of grumpy old man phase)

Why do people go to private schools? is it the same reason people buy designer goods? they want to create an image that they are better than others? Schools like Duqunse, TOURO , Northeast Ohio Medical University and Rosalind Franklin pharmacy school are massive ripoffs that one would have to be near brain dead to consider attending.

 

[Dred Pirate]

Why do people go to private schools? is it the same reason people buy designer goods? they want to create an image that they are better than others? Schools like Duqunse, TOURO , Northeast Ohio Medical University and Rosalind Franklin pharmacy school are massive ripoffs that one would have to be near brain dead to consider attending.

i did it because i was stupid and wanted to stay closer to my undergrad/girlfriend - considering that was about 5 gf's and 2 wives ago - not the smartest thing to to do 🙂

 

[Modest_anteater]

i did it because i was stupid and wanted to stay closer to my undergrad/girlfriend - considering that was about 5 gf's and 2 wives ago - not the smartest thing to to do 🙂

Ig the lesson is love may be ephemeral but debt is forever.

 

[Dr. Galazkiewicz]

Ig the lesson is love may be ephemeral but debt is forever.

They say that 3 inch patch is the most expensive real estate in the world.

 

[Modest_anteater]

They say that 3 inch patch is the most expensive real estate in the world.

 

[iggles]

Appreciate the info iggles! I will stay on REPAYE and aggressively pay my loans off. I considered refinancing but not anymore. I hope to pay it off in 4-5 years! Even sooner if I can increase cash flow somehow.

If you want to aggressively pay off your loans then I suggest paying them back in lump sums. Save up 6 months of payments in a high yield savings account and and pay down your loan twice a year. The reason being is that when you aggressively pay off your loans through monthly payments you aren't taking advantage of the interest subsidies. Lets say in January you make a large 20 grand payment towards your loans. That payment would more than cover any of the interest that was being generated for that month so no advantage for you there. But then lets say from Feb-July you make the bare minimum payment that's calculated by REPAYE which doesn't cover all the interest that accrues from your 300k loan while you save for your next lump sum payment. Well in those months the gov is pitching in to pay off some of your interest. Then in July make your next lump sum payment and so on. The savings account that you're using to hold your student loan payments also doubles as an emergency fund which should provide you with some peace of mind. Also remember you can write off $2500 in student loan interest from your taxes if you meet certain income requirements which you wouldn't be able to do if you were aggressively paying off your loans every month.

Being in debt isn't the end of the world for you as long as you properly manage it. Keep your emotions in check and stick to a budget. Good luck!

 

[Twentytwelve2]

If you want to aggressively pay off your loans then I suggest paying them back in lump sums. Save up 6 months of payments in a high yield savings account and and pay down your loan twice a year. The reason being is that when you aggressively pay off your loans through monthly payments you aren't taking advantage of the interest subsidies. Lets say in January you make a large 20 grand payment towards your loans. That payment would more than cover any of the interest that was being generated for that month so no advantage for you there. But then lets say from Feb-July you make the bare minimum payment that's calculated by REPAYE which doesn't cover all the interest that accrues from your 300k loan while you save for your next lump sum payment. Well in those months the gov is pitching in to pay off some of your interest. Then in July make your next lump sum payment and so on. Also remember you can write off $2500 in student loan interest from your taxes if you meet certain income requirements which you wouldn't be able to do if you were aggressively paying off your loans every month.

I read this:If your monthly payment doesn't cover the full amount of interest that accrues on your subsidized loans, the government pays the difference for the first three years
It looks like they dont pay for any of the interest that accrues if the monthly payments cover the cost of it.

 

[iggles]

I read this:If your monthly payment doesn't cover the full amount of interest that accrues on your subsidized loans, the government pays the difference for the first three years
It looks like they dont pay for any of the interest that accrues if the monthly payments cover the cost of it.

Exactly. They cover 50% of the outstanding accrued interest each month. For instance lets say your the interest payments alone are 2000 each month and your REPAYE payments are only 1000 each month. The government would pay half of the outstanding accruing interest each month ($500). Your loan balance would grow by $500 dollars that month but remember there is no interest capitalization working against you so that would remain a flat $500 instead of compounding. By keeping your payments as low as possible you increase the amount the government pays towards your interest.

 

[Twentytwelve2]

Exactly. They cover 50% of the outstanding accrued interest each month. For instance lets say your the interest payments alone are 2000 each month and your REPAYE payments are only 1000 each month. The government would pay half of the outstanding accruing interest each month ($500). Your loan balance would grow by $500 dollars that month but remember there is no interest capitalization working against you so that would remain a flat $500 instead of compounding. By keeping your payments as low as possible you increase the amount the government pays towards your interest.

Do you think it would be more in my favor if I put all my disposable income into the stock market and then accumulate it for 2-3 years, sell it off, and make a huge lump sum to my loan?

 

[Swishers]

Do you think it would be more in my favor if I put all my disposable income into the stock market and then accumulate it for 2-3 years, sell it off, and make a huge lump sum to my loan?

Which stocks would you buy? You'd be buying at the ATH (generally speaking) and betting that the stock market is going to outgrow your loan interest. I'm not saying this is a good or bad idea.

 

[Twentytwelve2]

Which stocks would you buy? You'd be buying at the ATH (generally speaking) and betting that the stock market is going to outgrow your loan interest. I'm not saying this is a good or bad idea.

I would dump them all into Apple.

 

[iggles]

I would dump them all into Apple.

If you're trying to aggressively pay off your loans like you said then I would suggest just sticking them in a high yield savings account like Ally bank which will give you 1.75% APR.

If you don't mind possibly extending the life of your loan due to a market downturn then sure put it all in apple its not going anywhere in the near future (remember to save for taxes).

Determine your risk tolerance before hand and make sure you follow through with your plan (don't switch strategies half way, start taking extra vacations because you see a large number if your portfolio, etc etc). Remember your goal is still to pay off your loan in the most efficient manner possible.

 

[Modest_anteater]

Do you think it would be more in my favor if I put all my disposable income into the stock market and then accumulate it for 2-3 years, sell it off, and make a huge lump sum to my loan?

The stock market is at a all time high due to the easy money printed in quantitative easing and going to head for a "correction" soon. So i would consider investing money in it high risk at it's given price.

 

[Dr. Galazkiewicz]

Do you think it would be more in my favor if I put all my disposable income into the stock market and then accumulate it for 2-3 years, sell it off, and make a huge lump sum to my loan?

A little late to the party, babydoll. The real gains have been made. Now the Fed will have to prop up the markets to keep tax receipts flowing. Nominally the markets may go to 1,000,000...but it might not buy you a bowl of soup at the deli at that point.

 

[BMBiology]

Do you think it would be more in my favor if I put all my disposable income into the stock market and then accumulate it for 2-3 years, sell it off, and make a huge lump sum to my loan?

That depends on how much the stock market will go up. Estimates are around 7-10% per year on average.

You might think that is more than your student loan interest rate BUT you are not calculating taxes and baking in the risks you are taking.

What if you loss your job, then what? How much is a peace of mind worth to you.


Sent from my iPhone using Tapatalk

 

[Modest_anteater]

A little late to the party, babydoll. The real gains have been made. Now the Fed will have to prop up the markets to keep tax receipts flowing. Nominally the markets may go to 1,000,000...but it might not buy you a bowl of soup at the deli at that point.

Yep time to pay the piper. You just can't print 3.7 TRILLION dollars out of thin air without some hyper inflation. Eventually what they did will come to have consequences.

 

[Dr. Galazkiewicz]

Yep time to pay the piper. You just can't print 3.7 TRILLION dollars out of thin air without some hyper inflation. Eventually what they did will come to have consequences.

The hyperinflation is in financial assets right now. Scary thing is, only a trillion of that 3.7 actually leaked out. XS reserves were 2.7 at the height in 2014.

But then you do have the SNB buying US stocks, BoJ buying stocks, ECB buying corporate debt. It's all fungible. The central banks put up a hell of a fight but it won't work. If globalization is to be reversed then the financial order of things will be greatly upset. I noticed the volume of the CNY contract was up about 50% from Monday & Tuesday's volume. The world changed Sunday night but the lame stream media didn't tell the American people. It's too bust astro-turfing the public into surrendering 2nd amendment rights. I'm hearing thru the grapevine big arrests are coming. Links to HRC.

You know what this means? End of dollar as GRC. End of the exorbitant burden.

 

[iggles]

Yep time to pay the piper. You just can't print 3.7 TRILLION dollars out of thin air without some hyper inflation. Eventually what they did will come to have consequences.

Hey if hyperinflation happens OP can pay off his/her loan a lot sooner than expected =)

 

[HandsomeVampire]

Get roommates or live at home
Prep meals
Dont buy starbucks
Dont buy new cars/toys
Pay a large portion within your means of your post-taxed paycheck to the loan every month.
You will get there

 

[Dr. Galazkiewicz]

Hey if hyperinflation happens OP can pay off his/her loan a lot sooner than expected =)

Not necessarily. After the Weimar episode, mortgages were restructured to account for the hyperinflation.

Don't worry, the Fed will do something.

 

[Momus]

Sell yourself at onlyfans, etc.

 

[VictorOfHungerGames]

Work for a non-profit hospital and do the PSLF program. Your loans will be forgiven in 10 years.

Or join the military.

 

[alpha12]

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Is this guy a scammer?

 

[Judgment Dragon]

What undergraduate and pharmacy schools did the OP attend?