Pharmacist - student loans

[sdpcat]

Advertisement - Members don't see this ad

Hello everyone. What's the way to tackle this? Consolidate? Use DRB? Right now all my loans are on fedloan. Any input and experience would be GREATLY GREATLY appreciated.

 

[radio frequency]

What is your balance and your rate? When did you graduate? How long have you actually been trying to pay these off and how much progress have you made? Do you budget your money down to every dollar?

I've paid off 95% of my loans since graduation a year and a half ago. Refinancing to get a lower rate is a great idea, but making a plan and following a tight budget was the biggest help.

 

[owlegrad]

I used PAYE the first year because you can use the income from the previous year (when you were a poor intern) to get low payments. Then pay extra - more of the money goes to principle and you have some flexibility in your cashflow. The key of course is being disciplined enough to actually make the extra payments.

The next year I used DRB to get a much lower rate. I have about 2.5 more years and I will be free of the student loans altogether.

 

[radio frequency]

I used PAYE the first year because you can use the income from the previous year (when you were a poor intern) to get low payments. Then pay extra - more of the money goes to principle and you have some flexibility in your cashflow. The key of course is being disciplined enough to actually make the extra payments.

The next year I used DRB to get a much lower rate. I have about 2.5 more years and I will be free of the student loans altogether.

I don't think this actually works the way you think it does. PAYE allows for lower payments, but the interest is capitalizing on the same amount of money (or more if you only make the artificially lower payments). This doesn't save you money. Refinancing may though!

 

[owlegrad]

I don't think this actually works the way you think it does. PAYE allows for lower payments, but the interest is capitalizing on the same amount of money (or more if you only make the artificially lower payments). This doesn't save you money. Refinancing may though!

Yeah, you are right of course. I could have sworn there was some advantage to using PAYE besides just having the option of a lower payment, but perhaps not. It wasn't that long ago but I can't seem to recall.

 

[Monsterdaddy]

The interest in all income based repayment plans are not capitalized until you leave the plan. Not much difference over a year or two but significant over several years and affects final amount of loan forgiveness. Also irrelevant if your low payments actually cover all interest accrued each year.

 

[Redtwogreen]

A few factors to consider here-- i.e. the balance of your student loans, your annual income, whether you plan to continue earning that income in the future (are you at a job you love? hate?) etc. We have $600k of student loan debt (I did dental school, wife did law school). We are currently signed up for REPAYE and are making aggressive payments to hopefully get it paid off in 5 years. We blog about it, so if you are curious about our deets you can check out what we are doing here: http://www.redtwogreen.com/rethinking-our-repayment-plan/

 

[waiter]

REPAYE is very generous and the way to go, in my opinion. There was a nice piece in the WSJ pointing out that Obama rolled this out to get votes from millenials. Again it's a very generous program with taxed debt forgiveness at the end of the rainbow.

 

[Student Loan Planner]

Be careful not just to check one lender bc of their affiliate agreement with a professional organization. One guy I worked with had a 4.8% variable rate 15 year. I helped him find a 3.04% variable 10 year rate, so moral of the story shop around.

In terms of debt to income ratio, if it's above 1.5 then you might want to use the govt repayment plans like REPAYE as others have mentioned. Below that just refinance and pay it down as long as you work at a private for profit institution. Don't forget about PSLF. I just finished an article on Pharmacy school debt for my blog which might help too