[USER]

This is so overwhelming and I am trying to be proactive in figuring out the best way to allocate my money. I graduated grad school and started working full time about 8 months ago. I can work towards PSLF if I were to get a job that qualifies for this, but my current job does not & I spent 7 months trying to find a job in the field. I’d appreciate any advice or recommendations..

• Income 115k
• Side jobs making an extra ~ $300/month
• $101k federal student loan at 7%
• $147k federal student loans ranging between 3-7%
• Just starting to fund a 401k
• 9k in Roth IRA
• 13k in HYSA, emergency fund
• 6k in individual brokerage
• Rent- pay my boyfriend $700/month for place he’s paying off mortgage for
• $368 car payment + insurance

I’ve been putting anywhere between $1-2k per month towards student loans but with interest restarting it hasn’t helped as much as it did over the past year.

[David]

I would continue to be aggressive with that 7% loan. Only hit the 401k up to the match (if there is one) and put everything else towards paying down the debt principal. Any other investing while having a 7% interest debt is counterproductive because your gains are being eaten away by interest on the loan.

Don’t be discouraged, you have a high income especially for your age and will be able to invest aggressively once the loans are paid – not to mention the relief/accomplishment you will feel!

[Bri]

I am getting my PhD and in deadass going to defer it till I die.

[Tristan]

This is backwards from a lot of the advice you’ll get on these types of groups where paying down the debt as quick as possible predominates but for large grad school or medical school type loans, paying them off as quickly as possible isn’t always the best route. If you qualify for any of the repayment plans, sometimes making the lowest payment possible based on your salary percentage and saving for the taxes on the forgiven amount in 20-25 years (depending on the repayment plan you choose) will actually SAVE you money over paying off the loan plus interest in ten years. The difference when calculated for my loan is almost $100k. It seems crazy but the math does work out. I have a similar sized loan and this is what is advised for many of us with large medical school loans.

You may want to talk to a financial advisor before making any major decisions but there are also student loan resources out there as well that can help. You can also reach out to your school and see if you might be able to speak with someone there about options available. I also had good luck speaking to my lending company managing my loan. I found them to be helpful at answering my questions.

During the loan hiatus period during COVID I dumped all the money I would have been putting towards a loan into a high yield savings account and now I have almost the full amount saved for my loan forgiveness which I won’t need for another 19 years. Until that time, it can continue to grow. I am also focusing on growing my retirement funds and I invested in a house as well.

Not all debt is bad debt. This advice always gets a bit of a uproar though. But unfortunately paying off large student loans for graduate students and those that have attended medical and veterinary schools is not something readily attainable these days. That’s why programs like loan forgiveness and repayment plans exist. It’s not perfect but it definitely helps!

Don’t miss: My student loans are paid off!

[Dante]

I would say go PSFL route and work at a non-profit for the 10 years. Use the new SAVE plan and pay bare minimum.

Im not sure if its actually the most fiscally responsible as I didn’t do the calculations – but – for me, the stress relief of knowing they’ll be gone is worth it.

I currently work for a non-profit and am in deference on my loans. About $100k. I only expect to pay back $30,000 of it with PSFL and i use the rest of the money for investments and saving.

Works for me, great option IMO.

[Aaron]

Well you Probably will pretty much never pay it off doing 1-2k a month .

So you have to decide if you want to pay it off asap or if you want to go with one of these “minimum payments forever but enjoy your life outside that routes . “

If you wanna do the first one then your going to have to cut your lifestyle way down and figure out how to do way more . For instance if your take home pay is 92k maybe you can live on 32 and put 60 a year on the debt . It’s going to take you years though because your income is small compared to your debt .

If you want to do the minimum payment plan routes then can keep on with what you are doing already . Sounds like your 1-2k a month will just about cover the interest so you can do that.

Also to avoid being misunderstood I do not mean this sarcastically . These are genuinely both viable options and it’s up to you .

[Sheila]

I really think you need to look at Dave Ramseys baby steps. You are too all over the place.

[Author]

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