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  • Grad Student Loan Plan

    Hey All,

    I have been going back and forth on the best way to start and finalize a payment plan for repaying my graduate school student loans. I have about $200,000 overall in graduate student loans, which have been all consolidated into one large loan with a federal/government average interest rate of 6.8%. I have been essentially just putting all of my extra paycheck money after cost of living into a savings account over the last year. I will have approx. $40,000 when the federal loan repayment starts in January 2022.

    My plan is to pay this large chunk through FedLoans (my student loan servicing provider) and then refinancing at the lowest rate possible through a private loan servicer. Possibly 5 or 10 year loan to keep the interest rate the lowest possible. Currently living with my fiancé who is being nice enough to let me pay for only utilities, as she has no student loans and letting me just pay/save the max $ amount each month to pay off the loan as fast as possible. I would like to be debt free in 3-5 years.

    Does anyone have an opinion if this is a good option or my best plan for action? Is there anything/something else I should look for that I am unaware about? I am not going for PSLF, as I work for a contracting company, which will not qualify currently under the requirements. Although, the hospital is a non-for profit organization. I appreciate any insight and advice and open to any discussion!

    Thanks,
    Ryan

  • #2
    Definitely private refinance if you're not working at a PSLF eligible job. Receive quotes in December/January and pull the trigger prior to interest resuming in February.

    Use the 40k as a lump sum payment (assuming you have a rainy day fund) prior to refinancing and start paying those down aggressively.

    If you end up locking in a 5 year rate, you can look to do variable over fixed as they offer lower introductory rates. But. if you're planning to pay them off in more than 5 years, just stick to fixed.
    Helping student loan borrowers manage their student loans. StudentLoanAdvice.com. [email protected]

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    • #3
      Thank you for the advice.

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