180k student loans. Don’t regret the actual principal but I do regret thinking I’d stay in academia and therefore would get PSLF. I didn’t treat them like an emergency and a gigantic portion of that balance is interest.
Can’t change that now. I’m trying to figure out the best path forward. I can throw $2500 a month at it and then send extra on a fairly regular basis. I’m calculating I’ll have it wiped out in 8 years, hopefully closer to 5.
I’m currently in SAVE forbearance. I no longer expect any type of forgiveness. Is there any point to moving to IBR (with a minimum payment of $1800, I’d still pay $2500) vs just staying in SAVE? I won’t get done by 2028 when it disappears, not sure what happens then.
Edit – 2 loans, same interest rate (5.375)
SAVE vs IBR – does it matter for me?
byu/BillHicksWasRight78 inStudentLoans
Posted by BillHicksWasRight78
4 Comments
You should switch to IBR now. Since you have the means to cover the IBR payment, there isn’t any benefit in staying in the SAVE forbearance. SAVE plan was terminated and will sunset on July 1, 2028, don’t wait until the last minute to switch plans. IBR, on the other hand, was passed by congress so by switching plans now, you are locked in a secure plan and avoid future administrative chaos.
If your goal is forgiveness, making payments during forbearance is a bad idea. They do not count towards forgiveness. If you want to make qualifying payments you would have to switch to another IDR plan. But if your goal is paying the loans off over time then making payments during forbearance and targeting the loan with the highest interest rate first is a good idea. Because you technically have no minimum payment due during forbearance, your entire voluntary payment can go towards your loan with the highest interest rate.
Stay on SAVE. Make payments on the loan with the highest interest rate.
I was in a similar position (see my post history) and I switched a month ago to the PAYE plan – highly recommend it. Your monthly payment should definitely be less than the $2500 you can afford and then can make extra payments on top of that. The other. benefit is the autopay feature which decreased all my loans’s interest rate by 0.25% which will save you hundreds if not thousands