Hello Blinders, Been meaning to post here for the longest time but haven't gotten around to doing so until now. Would welcome any help that the community could provide! I have about $230K in student loan debt that I incurred between 2016 and 2020 while I was doing my MBA. Without going into much detail, I didn't originally mean to take out so much, but I encoutered a very draining and rough period in my personal life outside of school/work that deprived me of my finances for one year during that time. Thus, i had no choice but to use take the easy way out and max out on my FAFSA loans. Another rub is that I am much older than most people who have taken on student loan debt in the past 10 years. I am currently age 52 as I did my MBA late in my career. I attended a top-ranked program which I credit towards helping me with my career and securing my current job. However, as with all things, the downside was the cost. Do I regret doing the MBA? Absolutely not...the connections and friendships made were invaluable and the intellectual challenge afforded to me really transformed me both intellectually and spirtually for the better. I attribute my new and improved mindset of thinking and reasoning to the experiences gained from the program. However, had I to do this over again, I would have many things different in terms of finance! I never took out any student loans before for my previuos undergraduate and graduate degrees (I have a Bachelors of Science and Masters of Science, both in Electrical and Computer Engineering) as I paid for my previous education in full so this is very much a new world to me. Thus, I am totally in the dark about all of the new developments surrouding the new forgiveness programs and all the acronyms (SAVE/REPAYE, IDR, etc.) and in general how the world of repayment works. It is exactly these matters on which I would like to hopefully obtain some more knowledge through the helpful community here....would greatly appreciate any advice and helpful guidance!To begin with, just a few facts about me and my situation: - 52 years old - My current base salary is $175K/year (Total Comp is around $210K/year). I contribute about 11% of my salary to a Roth 401K and about 8K to an HSA. - I work in the private sector and it's highly unlikely that I will probably work in the public sector or government in the future. - I am married but have no children and don't intend to have children. I file as Married Joint tax return. Have a couple of furry friends in the house.:) - My wife/spouse is currently in the process of starting up here own business but is not drawing in signficant income. For this year, her income will be < $2K - I have a total of 12 loans broken down as follows: * Unsubsidized Loans totallling around $79 with each of these four have an interest rate ranging between 5.3% ~ 6.3% * 8 Graduate Plus Loans totalling ~$151K with the hightest interest rate @ 7.6% and lowest one @ around 6.3% - Of the total $230K in debt, $203K is principal and about $27K is the interest that has accumulated since 2016. - I have not made any payments yet as was not able to save money only until recently. - We don't own a home and rent, and with my current income/debt ratio, I highly doubt I will be a homeowner in my lifetime but would love to do so if I could. - My FICO score is presently around 770 - I currently have about $40K in cash I saved up. However as we plan to be moving out of state later in the year, I need to put away some cash for moving costs and deposit on a new rental place. - I am in fairly good health but I don't see myself living past 80 years old (cancer runs in my family) So with this in mind, my questions are the following: - What exactly is this SAVE/REPAYE program and would it be applicable or beneficial to someone of my profile? If so, what would be the first step I should take before the interest resumes in a couple of weeks? - I think that IDR stands for Income Driven Plan. Am I eligible for this, and if so, should I pursue this If not IDR, what do you Blinders advise I do in terms of choosing a repayment plan? - My school's financial office said that one option might be to refinance the high interest loans (those which are >7%) with a private lender to get a lower interest rate and then keep the other ones with the government to maintain a flexibility option. However, it doesn't seem like refinancing would really move the needle right now considering how high interest rates are with inflation. Is this true? If so, would this be a recommended strategy? Why or why not? - I am thinking of perhaps booking a session with a student loan planner such as this one (https://www.studentloanplanner.com/hire-student-loan-help). Has anyone use these types of services? They charge very high rates ($595/1 hour). Is it worth it and recommended? - Would it best for someone of my age and financial situation to just use about $30K in cash that I have to pay off the $27K in interest I have and then just find a way to make the absolute minimum payments for the rest of my life until I die and then just take the balance of my loans to the grave rather than sacrificing a potentially enjoyable lifestyle for the sake of paying off my loans while eating Cheerios for dinner each night? - Apologies for the long post but as the start date of repayment and interest is just a few weeks away, I am in dire straits as to figure out what would be my best strategy to basically chart the remainig decades of my life here on earth. Any help would be greatly appreciated! #personalfinance #studentloan
Yes. Wait till you are 60. I am sure democrats will forgive that loan.
This is exactly why I did not pursue MBA. Does not work out for those in late 40s or so. I am surprised to see your current comp still sort of low for an MS + MBA degree holder.
I was in semiconductors before and now I am working in the life sciences space. Unfortuantely, I won't be part of the FAANG elite.
Which business school did you attend and why is your post MBA salary so low.
Seems like a decent strategy, pay the minimum.
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The issue you have right now is that you can't refinance until the Fed cuts rates. Tech industry is getting killed by those rates right now and this is collateral damage