Me again (and thank you all so much for the feedback and sharing).
《《EDIT I have 176K now growing. People commenting to "just pay it" seem to not get that I need a plan, and I need to also save while I can. My goal is to survive! And not be broke at 85! thanks》》
I am 52. Only have 2 years clocked toward forgiveness on humongous grad school federal loans. I finally have a job making real money. But that means even IBR monthly payments would be sky high (almost close to the cap). This is my time to save. Who knows if I will still make this kind of money in 1 or 3 or X years. I could go to zero.
I have an idea for what plan to choose but I need outside help to check myself. I got myself into this mess never asking anyone anything, so this time I need help. Is this crazy?
My idea is to choose a standard payment plan but not a 10 year. I would choose the 25 year graduated extended one. The first 4 years- maybe even longer- would have monthly payments lower than RAP or IBR would be on day 1 if I chose those in July. Then, as the payments increase too much (they go up every 2 years, but not much), or if my circumstances/job/salary etc change for the worse, I would switch to an IBR plan.
But the thing is, all the years spent on the extended graduated standard plan wouldn't count toward forgiveness. So for example, i could be 58 starting a 25 or 30 year trek to forgiveness.
Also can I be sure I will be allowed to keep changing plans? Or will I be stuck?
So the question is… is it dumb to just plan on dying while still inside the 25 or 30 years hike to the finish line? I mean… I'd avoid a tax bomb right? And always have managed to spend as little as possible and still be in good standing? Hey, who knows, maybe I'd actually even pay it off! Should life allow and I just keep paying on the original the term based plan.
Isn't this kinda using my age for good? (Finally! Something good about being in debt so old!)
Is this dumb? Please tell me if I am being stupid to consider this.
Thank you!!!!!
Can I forget about trying for forgiveness?
byu/thewalkingcure inStudentLoans
Posted by thewalkingcure
4 Comments
You’re going to be tired of paying the loans by year 7.
Leave them on the ten year plan on autopay and forget about it.
They know where you live and they will get the money out. Just pay off your obligations.
Edit. Said as someone who did this. And it sucked paying.
I would just pay off your loans rather than having them morbidly hanging over your head in a “these will die with me” way.
It sounds like you’re ok with paying these indefinitely so if you’re not concerned with paying them off or potential forgiveness, then your plan is fine for saving for/enjoying retirement more compared to getting rid of the loans.
When you run the numbers, is there any benefit to going on RAP as far the interest/principal subsidy compared to the extended plan? Again, if the plan is never pay off or have forgiveness, then there’s a chance it won’t matter if the balance balloons but I would still model out the different scenarios and how it interacts with your retirement as well.
Keep in mind that the more you put into a 401k for that retirement, the lower your AGI and thus, the lower payment on an IDR. Make sure you’re playing with those numbers accurately and max out your tax-advantaged accounts as aggressively as possible.