Hey all. Sorry if this has been discussed already. I’ve always been on an IDR plan, SAVE most recently, and surrendered to doing the 20/25 year repayment (I have some time with PSLF but that wasn’t mentally sustainable for me with my field of work). Now that things are so uncertain, and my interest is going up $1000 a month, I’m debating trying to pay off some of the lower amount, higher interest loans just to have less loans that can accrue interest. I also don’t want to just throw money into the wind given how much will still be accruing (my grand total student debt is $249k 😅). Part of me is thinking don’t do anything, save my money, and just move forward with monthly repayments for a very long time since I can’t get ahead of this amount. (I’m also aware of the tax bomb, will prepare for that). Any suggestions, approaches, insights etc would be greatly appreciated.
Interest accruing $1000/month
byu/outside_the_net inStudentLoans
Posted by outside_the_net
4 Comments
Depends how much you make
If your total student loan debt is $249k and you’re aiming for forgiveness, then it makes no sense to make extra payments even if your balance is growing. That money will be forgiven in the end anyway. Put the money into a HYSA to build up an emergency fund and save for the eventual tax bomb. You can use this calculator to estimate the tax bomb amount: https://thecollegeinvestor.com/61018/student-loan-tax-bomb-calculator-and-estimator/?srsltid=AfmBOoqwxv1MefOUqoqJc69ZRfkPYxQ40EaYOeY5sID7n5q8BVLD7U5V
Following. I will have the same amount
How much do you make? In what field?
Why is a PSLF-eligible job less mentally sustainable than extending your required payments by 10-20 years on a regular IDR plan?
Interest accrual should not be of much importance if you are truly confident in your ability to make X amount of qualifying payments. But you need a clear plan.