I have a question. I have 80k in student loans. I picked the option knowing I will pay 200-300 every month for 30 years. This amount is totally doable given my salary. Why are people so opposed to this type of arrangement this is much better than paying 1-2k every month for a much shorter period.

likefunny
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Because you’d pay much more interest over the entire life of the loan as compared to paying it off over a shorter period.

likesmarthelpful

D12 is right. Student Loan Cancellation will happen in our lifetime. No sense paying anything more than the minimum. I work overseas so my on-time monthly payments are $0. The moment I go back to the US, ~17k/year in loan payments will be factored into my budget. Unless someone give you a sweetheart 1-2% 30yr private loan, not worth paying off.

So I’m the opposite, I put 2K+ a month to my loans and treat it like another rent - my savings don’t go up but I know after it’s paid off I never have to worry about it again and can save the money and go invest

likesmart

Doing the same, about $70k left in loans, pay between $1000-2000 per month. I want the loans gone (especially w interest paused) so I can start saving and not worry about them. I think it’s the smart move to pay them as fast as possible and what financial advisors have told me.

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Interest rates and total cost of ownership over the life of the loan

Is getting a pilot's licence a priority? Where I come from (UK) that costs around £100,000. Today I saw someone crowdfunding the £60k they needed to make up that sum to get the licence.

If that is your priority, then why didn't you just do that instead of pre-loading maybe around £100k debt already at law school before??

I have a lot more debt than that and am on the ibr rate that you pay for 20 years then are just done. At my current rate, I will never pay principal. To repay my loans in 20 years, I'd have to pay over 2k a month and I'm not biglaw, so would just never be able to do that. I was fine with just having this payment for a while, but it did make it more expensive to buy a house bc my mortgage company calculated my payment as 1% of my student loan. My partner will finish grad school with almost no debt and a lot of job prospects in 2 years, so we're just going to refinance the mortgage in her name once that happens because it still just makes no sense to try to pay back my student loans.

But that’s the correct decisions. 20yrs and being done with it is the smart choice. Pay the minimum, see the world, have kids, take career risks.

Top tips:

1.) lowering your AGI by allocating more to your 401k and IRA will reduce your payment amount, and you have tax-advantaged savings
2.) if you want a break from the US, you can work abroad and have your loan payments go to $0 or close to it because loan payments are based on taxable income. For couples abroad, US only taxes you after the first $~220k so your loan payments are based on that. I pay $0.
3.) student loan crisis is a macroeconomic crisis that will be addressed within the next 20years. A good chunk if not all will likely be cancelled in order to boost aggregate demand. All student loan debt is just macroeconomic drag.

likefunny

Balance of both. Too many small payments add up if you have too many loans. But also paying too much cash at once leaves you little to spend on other important things. It’s managing the balance of cash flow and liabilities. Having both are fine as long as you manage it well.

I am opposed to having to take on so much student debt to begin with.

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