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  • I've made some bad decisions...

    So I've made some bad decisions.

    Initial loans were 300K. 30 K was 9.25% and I paid that off ASAP. The rest is at 6.25%

    That was 7 years ago. Since then I've faithfully payed off these loans at about 3k monthly. I'm down to about 90k. I'm starting to stall financially as my family grows and now I'm getting desperate to save better. I've now come to realize I misunderstood how certain things like PAYE works. I'm making 130k annually and I should have used this option long ago. Going forward I'm trying to figure out how best to proceed. PAYE monthly would cost me only 800 bucks per month saving me 2200 monthly. If I start using this option would it take into account the 7 years of payments I've already put in? If it doesn't then it won't make sense for me financially. Are there better options for me? I held off refi based on some bad (terrible) advice but now this COVID thing is working for me a bit....should I continue paying???....wait until the no interest thing expires and refi then??? Thanks in advance for any thoughts.


  • #2
    Your loans must be federal and consolidated. YES Standard payments should count. You could switch to PAYE fill out employee verification form on Fedloan and see how many payment credits they give you. Federal loans will be switching to a new loan servicer, so I would call/work on this now before end of year.

    as long as you worked for a "non profit" and your loans qualify you should be ok to go forward for PSLF.

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    • #3
      I assume OP isn't going for PSLF given they don't mention it.

      No reason not to see what offers you get refinancing. Then keep throwing 3k a month or whatever you think you can afford. Then the question is how you rank tax advantaged accounts vs. throwing all u can at loans. Different strokes for different folks there.

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      • #4
        Have you considered making more money?

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        • #5
          I just read this npr story today, sounds like good changes are coming that might benefit you OP. If your 7 years of payments qualify, it would definitely make sense to switch and do the lower monthly amount for 3 more years and have it all forgiven.

          https://www.npr.org/2021/10/01/10418...nhfHe1xMMx0neE

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          • #6
            Originally posted by abds View Post
            Have you considered making more money?
            You don't have a debt problem, you have an income problem. What you've done is actually really impressive on that income.

            Can you tell us a little more about your career plans and maybe we can make some suggestions to get that income up. That $90K would be a much smaller problem with a $200K+ income.
            Helping those who wear the white coat get a fair shake on Wall Street since 2011

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            • #7
              Hold off refinancing. PSLF reform is coming. Previous federal loams that didn't count towards pslf may be now counted.

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              • #8
                Originally posted by resident_1 View Post
                Hold off refinancing. PSLF reform is coming. Previous federal loams that didn't count towards pslf may be now counted.
                Citation please?

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                • #9
                  Originally posted by Hank View Post

                  Citation please?
                  Here is the NPR story: https://www.npr.org/2021/10/01/10418...forgiveness-pr
                  "According to the source familiar with the Education Department's plans, the agency will offer a temporary opportunity for anyone working in public service to get prior loan payments counted toward PSLF — even if those payments were going toward disqualified FFEL loans.

                  And the department is not just expanding the rules around loan type. Borrowers will also receive credit for payments made in the wrong repayment plan, regardless of whether the payment was made on time.

                  To qualify for this do-over, borrowers will need to apply for PSLF before Oct. 31, 2022.
                  "

                  Comment


                  • #10
                    Originally posted by BadWithMoney View Post
                    So I've made some bad decisions.

                    Initial loans were 300K. 30 K was 9.25% and I paid that off ASAP. The rest is at 6.25%

                    That was 7 years ago. Since then I've faithfully payed off these loans at about 3k monthly. I'm down to about 90k. I'm starting to stall financially as my family grows and now I'm getting desperate to save better. I've now come to realize I misunderstood how certain things like PAYE works. I'm making 130k annually and I should have used this option long ago. Going forward I'm trying to figure out how best to proceed. PAYE monthly would cost me only 800 bucks per month saving me 2200 monthly. If I start using this option would it take into account the 7 years of payments I've already put in? If it doesn't then it won't make sense for me financially. Are there better options for me? I held off refi based on some bad (terrible) advice but now this COVID thing is working for me a bit....should I continue paying???....wait until the no interest thing expires and refi then??? Thanks in advance for any thoughts.
                    What type of loans do you have and what payment plan have you been on? You may have been making qualifying payments all along. But if that's not the case, legislation might be coming out soon which could be beneficial to you and only require you 3 more years until loan forgiveness.

                    Current PSLF qualifying payment plans
                    • REPAYE
                    • PAYE
                    • IBR
                    • ICR

                    Current PSLF eligible loans
                    • Direct stafford (unsub/sub)
                    • Direct consolidated (unsub/sub)
                    Helping student loan borrowers manage their student loans. StudentLoanAdvice.com. [email protected]

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                    • #11
                      Originally posted by resident_1 View Post

                      Here is the NPR story: https://www.npr.org/2021/10/01/10418...forgiveness-pr
                      "According to the source familiar with the Education Department's plans, the agency will offer a temporary opportunity for anyone working in public service to get prior loan payments counted toward PSLF — even if those payments were going toward disqualified FFEL loans.

                      And the department is not just expanding the rules around loan type. Borrowers will also receive credit for payments made in the wrong repayment plan, regardless of whether the payment was made on time.

                      To qualify for this do-over, borrowers will need to apply for PSLF before Oct. 31, 2022.
                      "
                      This is crazy, I wonder who and how broad this would be. What if you were but arent currently, etc...just residency/fellowship and a couple years at a hospital gives me almost 10 years....depending on all the other junk.

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