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The State of Student Loans

Friends -

Over the past 6 months or so I’ve became submerged in the lore surrounding student loans. Yeah you read that right. Lore.

You wouldn’t believe the expanse that exists over in that realm. It’s like the Mariana Trench. Deep stuff. So today’s reading may be a little dense, but I promise it’s worth your while.

If you’d had the fortune (more like misfortune) of taking out a student loan and dealing with a Public or Private Servicer in the last few years, let’s talk about what your options may be below.

⏳TL;DR - Private loan bad. Federal Loan Decent. No Loan Best. Loans are Complicated. Contact Andrew for loan assistance.

Let’s get into it!

If you have Private Loans…..

Oof. Yeah. Let me be straight and say there aren’t a lot of good choices here. No forgiveness for these guys. Private loans aren’t afforded any of the benefits Public Loans are. No different repayment options besides the one you get initially. No subsidized interest rates.

Recommendation #1: Check your interest rate out. Is it adjustable or fixed? You can find this information out by heading to your loan servicer’s website and finding the terms of the loan. Some loan servicer’s will adjust rates on loans every month for certain adjustable loans. Otherwise, your loan is a fixed-rate loan - which is directly related to the federal funds rate at the time you enter the loan. Which has been increasing by lot lately…. (Inflation and such)

Recommendation #2: Check your loan term. Your monthly payment may be low, but that loan term may be 20 years (for real, they offer these). The longer the loan term, the more interest you will pay. The interest rate will likely be higher too. I don’t you want a payment hanging around for eons like that. That me leads in to the final thought here.

It’s not a good time for refinancing - unless you have a sky high interest rate that’s adjustable. Recommendation #3: Shop around for fixed rates at multiple loan servicers. Look for the lowest rates, best bonuses, and for a monthly payment that’s the highest you can afford.

At the end of the day, you want to pay the least interest and pay it off as fast as possible.

If you have Public Loans….

Alright cool! Now we can do something here. Let me ask you a quick question - Do you work for the government? Or a Non-Profit? (Most hospitals are non-profits!) More info on this…

Unless you live under a rock, you know that payments on all federal loans are paused until the Supreme Court makes their decision on Loan forgiveness. I could talk all day about the intricacies here, but that’s the jist. If you have under $10,000 in loans or $20,000 in loans and received a Pell Grant, you may get all that forgiven. Keyword is may there.

Okay, Supreme Court aside, what are your options?

PSLF - If you work for the government or a non-profit, you can get your federal loans forgiven in 120 months by making a payment based on one of repayment plans below. Future doctors, nurses, surgeons, this is the way.

Repayment Plans - There are 4 different options right now, beside the standard 10-year repayment. PAYE, REPAYE, ICR, and IBR. To keep it simple, these options basically take a % of your income, and charge you that each month for a specific term, then the remaining amount is forgiven.

I won’t go into it here, but each of these plans come with so much detail. Like marriage, tax filing status, and whether or not you live in a community property state Confused yet? Let me know if you want me to delve into this more, I’d be more than happy to! Or - contact me and let’s talk about best strategies here.

If you have no loans…

Well, good for you. Enjoy the student-debt free lifestyle! I guess today’s info might’ve been overwhelming. However, if you ever consider college is in your future or for someone you know, keep this information in mind.

Hopefully I’ve planted the seed of awareness in your mind today. What you don’t know here can hurt you if you let it.

My personal thoughts on student loans -

• Use Savings First If You Can

• Use Public Loans/Aid/Grants Next

• Use Private Loans as a last resort

• Aim for maximum forgiveness

• Your job may determine if loans are forgiven.

• Don’t default. Your wages will be garnished.

Interested in some further reading? I really like studentloanplanner.com and their blog. Many helpful tips and tricks in there, so go check it out.

Also, I am excited to announce the addition of comments to website version of the newsletter - Go ahead and click the link below if you want get in on a discussion. I’ll see you there.

Stay Frosty My Friends,

Andrew

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