Death by Student Loans

[SaintGeorge]

Hi. I have been flirting with this site for a while and have taken many steps, but the $200,000 in student loan debt that has been haunting me for a decade makes me more than a bit depressed and makes all my other efforts seem meaningless. I have actually been running from it through forbearances. To this day I haven't paid a dime because it seems pointless.  I make about 40 k a year as an elementary school teacher, am married, and my wife is looking for work.

Any ideas?

[ixtap]

Is this an income based forebearance? Will your wife's salary require you to start paying? Have you been paying the interest or letting it accrue? What is the actual total? Does your school district offer any kind of loan forgiveness?

[PapaBear]

Hi SaintGeorge, posting here is definitely a great first step to tackle your student loan.
To go further, maybe it would be worthwhile to post a full case study including your income and expenses as well as all loans including interest and special conditions (e.g., forbearance terms etc.) in the Case Study section of this forum: https://forum.mrmoneymustache.com/case-studies/

This post includes a reference, what kind of information are usually helpful in a Case Study: https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/
With more detailed information, the people here at the forum might be able to give you more specific input on how to move forward.

[Rosy]

Is this an income based forebearance? Will your wife's salary require you to start paying? Have you been paying the interest or letting it accrue? What is the actual total? Does your school district offer any kind of loan forgiveness?

+1 - also what is the interest? Is there a minimum you are required to pay once you start paying it all back? Have you looked into a refi?

What is your overall situation? Would you wife be OK with throwing all or half of her salary at your student debt? Can you pick up side gigs, delivering pizza or tutoring... to slay this debt?

There are several teachers on this board who make good money teaching English, speaking with Chinese students online - a solid $40 hr.

It may take a while, but the sooner you start the sooner you'll be debt free. Figure it out, set it up on automatic payments and go on with your life:)
A case study would help to sort it all out.

[WhiteTrashCash]

I've paid down $74000 in student loans to $51000 in two and a half years, so it is possible to pay large student loans. In your case, though, and with your salary, your best course of action may be to get on an income contingent plan and pay your payments for 25 years and then just be forgiven for the rest. I would say go for teacher loan forgiveness, but it looks like the Trump administration isn't planning to honor that agreement.

[Fire2025]

....your best course of action may be to get on an income contingent plan and pay your payments for 25 years and then just be forgiven for the rest. I would say go for teacher loan forgiveness, but it looks like the Trump administration isn't planning to honor that agreement.

I agree, get the income contingent loan and start paying.  That way you can move forward.  The day I got my loan all refi-ed (30 year fixed), started my payment, and I knew that I was finally in control of the beast instead of it being in control of me, I felt a great weight come off me. 

Honestly just knowing you have wrestled this beast will make you feel a lot better.

Also on the nuts and bolts side of things income based loans use AGI, so your savings in your 401K and some other pretax accounts, will help keep your payments low...win, win, for you.

[thingamabobs]

Can you qualify for loan forgiveness? I'd start researching that right now!

[ejmyrow]

I am actually a Loan Financial Specialist at a university! SO, what kind of loans do you have? If you have a Perkins, you may already be able to cancel that loan. 5 years of teaching at a low income school = 100% cancellation of Perkins. BUT you can't have paid on it (you can't get reimbursed). You apply for "deferment in anticipation of cancellation."

If it's not a Perkins, if it's Direct Loans, I recommend 10 year public service forgiveness. You MUST be on an income-based payment plan, and you make 120 payments while working full time for non-profit or state/fed organization. After the 10 years they forgive ALL the remainder of the loans.

Note: consolidation is also an option however the 10 year public service would likely be better (assuming the program continues). If you consolidate through studentloans.gov your interest rate will not change. If you consolidate with a private company you could get a lower interest rate but it might not be fixed and you'll lose deferment and forbearance privileges (which are an important safety net).

[SaintGeorge]

Wow! Okay! First, thank all of you for your help. I really appreciate it and so does my wife and eventually, one day so will my daughter. I have a lot of homework to do, namely, figuring out the details of my clown-car of loans and then I can take the steps you are suggesting. I know I can do this! Thanks guys! I may be messaging some of you soon.

-George

[nara]

Do you have the ability to leave the country to teach abroad? My husband is a teacher and there are so many great opportunities for certified teachers overseas! We have teacher friends who just travel the world teaching (even with a family) and we spent some time abroad ourselves. The benefits are huge!!! Great salaries (esp. in the UAE), free housing for you and your family, tax free income, full benefits, and free tuition for your kids. We did it for just a year for fun, but the financial potential is enormous. We are planning on doing this again in the future after FI when all the furbabies have "gone to college".