Author Topic: Should I take out more loans for my education? PSLF advice needed.  (Read 1732 times)

Lski'stash

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Should I take out more loans for my education? PSLF advice needed.
« on: September 13, 2015, 02:58:43 PM »
Here's the situation.

I am a teacher paying my federal student loans on the PSLF program. Basically, I make 120 on time minimum payments and I am done. Payments will never be higher than 15% of my post-tax income (not exact, but pretty close, the formula is long).

Right now I am married, but we file separately so that only my income is taken into account. Because 403B's and 457 accounts are taken out pre-tax, it's not calculated into the payments. What this means for me going into the future is that my monthly payments will actually get lower as I put more and more into my 403B and 457 account. Right now I pay $278 a month, and it will only be lower from there as I increase my savings rate.

Additionally, I get an increase in pay for every 15 credits I take. It's not much, but when I calculate it out, it really adds up. I would also get an increased pension. Here are my estimates with our current contract (attached- unions must publish these things):

Now with Masters              with 45 more credits
$55,854                           $61,839

*20 more years totals:
Masters only: 1,408,728 (not counting for money made through investing)
Masters with 45 more credits: 1,514,951
=106,223 more

I would additionally get over 2,000 per year more on my pension, which I estimate I will be receiving at age 48.

The cost would be a little more than 16,000, which is what around 5 more years of payments would be to the government (120 payments for each loan, so it's stretched when new loans are put on). I would even be able to take out more in loans that I would even need to pay for classes, because the government always thinks I'm poor or something;)

Am I missing anything? This is a no brainer, right?
« Last Edit: September 13, 2015, 04:10:59 PM by Lski'stash »

GetItRight

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Re: Should I take out more loans for my education? PSLF advice needed.
« Reply #1 on: September 13, 2015, 05:49:37 PM »
My initial thought is never borrow money for "education". College is a joke, and you're the punchline.

Do you have ER plans before 10 yrs from last loan? How are payments in ER calculated? Could you structure to zero income for student loan repayment purposes? Total additional projected income before ER vs projected repayment? Could make sense, but what if you lose your job or quit if it gets bad? How will your pay be affected at other jobs you may work?

Might make sense but I still say avoid the college, especially if you're not paying cash. There are very few things worth going into debt for, "education" doesn't even come close.

pbkmaine

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Re: Should I take out more loans for my education? PSLF advice needed.
« Reply #2 on: September 13, 2015, 06:08:26 PM »
I am not a teacher, but there are many in my family. Have you networked with the other teachers to find the easiest and cheapest way to get these extra credits? The requirements vary from state to state, but in many states, you just have to pick an institution that is recognized by your employer. Make sure you know what's required in your state. My stepdaughter in NJ has her masters in education, but masters plus 30 puts her in a higher bracket for both salary and pension. She is looking to see how many of those credits she can do inexpensively online. Your state teachers association should have good information on this as well.  In short, if you can get credits that bump your pay scale inexpensively, I would do it.

Lski'stash

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Re: Should I take out more loans for my education? PSLF advice needed.
« Reply #3 on: September 15, 2015, 06:23:39 PM »
Thanks folks. As always here, I was thinking one thing, and I get a few more opinions to really help me stretch my thinking.

Not one day after this post, a teacher friend of mine told me about Learners Edge. These courses are almost free for me since I get $1200 a year from my school.

http://www.learnersedgeinc.com/

So excited now! I will get the pay increase, and I won't have to owe anymore time to the government!