[Ursu]

Student Loans: Looking for some sound advice, I owe $73,000 in student loans, I’ve paid off $75,000 in the last 10 years. I am currently on deferment because I started a Master’s program last year but didn’t complete it. The interest started accruing again last year, so I have been making monthly payments of $900/month, but it seems it’s all going to the interest.

I don’t currently qualify for PSLF, but might in the future.

My question is, do I pick the repayment plan with the lower amount per month $800-$1050 and then double the payments to pay it off sooner, or do I choose the SAVE plan, based on my income, the estimated monthly payment would be $1700.

I really want to knock the loan off fast, but I’m not sure what the best strategy is.

I would have to stop saving money in order to accomplish this.

Thoughts?

[Angela]

I’ve heard that with the save plan if you pay the minimum and they write off an amount of interest, then you make a separate payment it all or almost all goes straight to principal because that interest was wiped out. Not saying this is ethical or advised, but do your research.

I think the only other way to get an interest rate reduction is if your loan servicer has a discount for autopay. Otherwise interest rates are set at the time you take out the loan. You can do a refinance if you can find a better interest rate, but going private may lose access to certain federal programs or protections.

[Christopher]

Lower payments ensure you never get out of debt. Paying as much as possible is the fastest way to get rid of it.

Paying less than interest ensures the balance continues to grow.

[Denise]

Depends on your philosophy. After 20-25 years of payments, if you have federal loans, your debt is forgiven. Therefore, if you have already paid for 10 years, then you either pay it off or don’t and make lower payments and let them forgive the rest.

Up to you.

[Golden]

SAVE plan. Pay minimum. Interest won’t accrue. Loan forgiveness. If you qualify, go for it. You didn’t make the rules, you’re just following the rules.

[Author]

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