Student Loan Repayment Plan

[FarmFam]

I have the following student loans:

Balance     Minimum   Interest
Husband's
1,195.00   22.00   3.15
1,845.00   34.00   3.15

Mine   
9,003.22   103.00   6.80
12,757.00   151.00   6.80
9,338.10   102.00   6.55
15,605.84   171.00   6.55
21,033.41   101.00   3.38
23,383.06   112.00   3.38

We also have other debt.  I am going to pay an extra $980 per month towards paying down all debt starting with the highest interest.  We should pay everything off by January 2018.

Now, I was looking into getting a "Pay as You Earn" or IBR or ICR payment plan with the student loans, which may be renewable every 12 months based on income.  They told me that the subsidized loan's interest will be paid by the government but that the other loan's interest will be rolled into the principle.  If you are curious, which I was, she told me I am paying a total of $390 per month in interest!  With the Pay as you Earn, the payments would be about $570. 

I was thinking I can do this to help pay down the other debts faster and then move all the money snowballed from those to pay off the student debt to get this down faster than January 2018.

Problem is that the paperwork is asking for my husband to sign since we file taxes jointly.  Online the paperwork is calling it co-signing.  On the printed paperwork, it is just asking for signature. 

My concern is that if he signs, and I die before these are paid off, he will be responsible to pay them off on his own.

Has anyone had any experience with this?  I called and asked and the person said he wouldn't be responsible.  However, all legalities say yes and online there are horror stories of husbands and parents having to pay off the student loan debt of those who died.

Should I just keep paying the payments as is $796 per month/$390 interest/month... or take a risk and have him sign so we can get the lower payments $570 per month with subsidized loan interest paid by government?

Also, I am reading lots of horror stories in my research where people in these plans have been screwed because payment didn't go to the right loans or there were mistakes then fees and stuff added on.  And I have also heard of people paying off their student loans and seeing it paid in full on credit report to later have Sallie mae come after them for more money.

Some stories of people paying off their loans will be good to hear!

[wtjbatman]

Do you expect to die sometime in the next 3 years?

[FarmFam]

Do you expect to die sometime in the next 3 years?

LOL!  You never know when you are going to die.  I can say no and then a piano may drop on my head tomorrow! 

My husband's cousin died in his 20's by changing a lightbulb.  We never saw that coming!

Anything that can happen, could happen.  I feel it is best to be prepared.  Although, I don't stress over it.  But in this situation, I don't want to leave my husband with lots of debt if I happen to die.

But ok, I actually just looked at my insurance.  I am paying for accident insurance (I have kids and live on a farm!) to help pay for any medical expenses that my high deductible won't pay for until I reach the deductible.  If I die due to an accident, it will pay $100,000 to my beneficiaries.  I guess that can cover my student loans?

[wtjbatman]

But ok, I actually just looked at my insurance.  I am paying for accident insurance (I have kids and live on a farm!) to help pay for any medical expenses that my high deductible won't pay for until I reach the deductible.  If I die due to an accident, it will pay $100,000 to my beneficiaries.  I guess that can cover my student loans?

Sounds like you figured out what to do, you just needed to get over that hurdle of self doubt.

I do IBR, and it saves me a lot of money both in the short and long term.

[Chicken]

IBR doesn't pay the interest as you go it forgives the total balance after a set number of years of making payments. (IBR 25 years, PYE 20 years).  There is also 10 year forgiveness for certain government workers. 

If you are set to pay your loans off in 2018 than it is likely that these payment plans do nothing for you other than lower your payment and extend the total time you are paying on your loans.  They really are only helpful if you simply cannot afford the payments or for people with massive amounts of debt and government jobs (lawyer, doctor etc.).

Seriously look into this further because whoever you talked to doesn't know what they are talking about.

[FarmFam]

Ok, I did it.  I am super nervous and hope nothing goes wrong. 

This will save me $120 per month on interest on the subsidized loans.  I am going to make sure I pay enough each month to pay the interest on the unsubsidized loans so it doesn't get added to the principle. 

By about June 2015, I should be able to snowball all my current debt payments to the student loans.  However, I hope by doing the IBR I will be able to make the June 2015 date earlier by having more money available to pay them off faster.

[DFJD]

Very best of luck! It's great that you have come up with a plan of attack!