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Thread: Student loan mayhem: Part II

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    Senior Member Ultralight's Avatar
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    Student loan mayhem: Part II

    This is wacky, but it appears that my student loan payment went from $350 a month last year to $285 a month for this coming here.

    They just completed my re-up for Income Based Repayment and this is what they calculated for me based on two months of my most recent pay stubs.

    My payment is lower? There must be some kind of mistake!
    的 came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

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    Why keep the thing around any longer than necessary? If you've been making $350 payments, continue at that rate (and more when you can) and get this debt off your back whether the payment is lower or not.

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    Senior Member Williamsmith's Avatar
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    The lower your payment, the less each individual loan gets addressed, the less principle you pay, the more interest accrues, the more interest accrues, the more they will eventually make off you when by no fault of your own through life's cruel odds (insert accident or physical/mental illness here) you will violate their terms of the loan and they will jerk the rug out from under your feet and tell you that there will be no loan forgiveness. The longer you remain owing, the more they maximize their ability to soak you for as much as possible by virtue of increasing the odds something bad happens to you. The best case scenario for them is to keep you paying until death do you part.

    Minimalism does include not only freedom from the burden of things but freedom from financial burdens also......right? Unfortunately, at least with an auto or home loan, you can declare bankruptcy and allow repossession of the asset. Not so with your student loan, what are they going to repossess? Which ought to get you thinking about how honest they are being when they allude to an eventual forgiveness of part of your loan.

    And at at this point with just 100 or so physical possessions, what is your total net worth?

    I know now the amount of money you owe sounds insurmountable but that's how they planned the scam in the first place. I recommend picking the smallest loan with the highest interest rate and target that one. Get off the income based repayment scam one loan at a time.

    Be be a loan minimalist. Easy for me to say, I really do sympathize with you.

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    Are you on the plan for public service employees to have the remaining balance written off in 10 years due to your service? I would take the lower payment then, there is a day when it will be paid then regardless of how much you pay now (as long as you are current and on the IBR).

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    Senior Member Ultralight's Avatar
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    Quote Originally Posted by lessisbest View Post
    Why keep the thing around any longer than necessary? If you've been making $350 payments, continue at that rate (and more when you can) and get this debt off your back whether the payment is lower or not.
    That is not how it works. Besides, I owe around $150k with interest compounding everyday. I could put every spare penny into it and I would still not pay it off before 25 years (when the remainder gets forgiven).

    And as it is now, I am on the Public Service Loan Forgiveness program. So no matter what my payment amount is, as long as I pay on time every month for ten years and continue to be a public employee then the rest will be forgiven after the ten years of service.

    So actually, the less I pay per month, the better...
    的 came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

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    Senior Member Ultralight's Avatar
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    Quote Originally Posted by Williamsmith View Post
    The lower your payment, the less each individual loan gets addressed, the less principle you pay, the more interest accrues, the more interest accrues, the more they will eventually make off you when by no fault of your own through life's cruel odds (insert accident or physical/mental illness here) you will violate their terms of the loan and they will jerk the rug out from under your feet and tell you that there will be no loan forgiveness. The longer you remain owing, the more they maximize their ability to soak you for as much as possible by virtue of increasing the odds something bad happens to you. The best case scenario for them is to keep you paying until death do you part.
    It is possible that something could happen -- a glitch in the system, the GOP dismantles the Public Service Loan Forgiveness Plan, a tragedy befalls me, etc.

    But if you felt this way about everything you'd be frozen in life by risks. So I am working the system the best way I can under the circumstances I am in. This means:

    Keep working for the gubmint. Stay in the Public Service Loan Forgiveness Plan. Pay on time. Keep payments low and based on my income. I also have one year of "any reason" forbearance I have saved up, so I can use that if I lose my job. But I can also submit proof of my loss of job and get other deferments. If I lose my job and get another one for the gubmint or a non-profit I can get right back on the Income Based Repayment and the Public Service Loan Forgiveness.

    I feel like I have explained all this before. haha

    Quote Originally Posted by Williamsmith View Post
    Minimalism does include not only freedom from the burden of things but freedom from financial burdens also......right? Unfortunately, at least with an auto or home loan, you can declare bankruptcy and allow repossession of the asset. Not so with your student loan, what are they going to repossess? Which ought to get you thinking about how honest they are being when they allude to an eventual forgiveness of part of your loan.
    Again, you cannot let risks freeze you into doing nothing in your life.

    Quote Originally Posted by Williamsmith View Post
    And at at this point with just 100 or so physical possessions, what is your total net worth?
    My net worth is massively negative. I own a 2012 Nissan Versa -- that is the only possession I have that is worth more than a couple hundred bucks. But I owe student loans of about $150k. Also: I don't care much about "net worth."

    Quote Originally Posted by Williamsmith View Post
    I know now the amount of money you owe sounds insurmountable but that's how they planned the scam in the first place. I recommend picking the smallest loan with the highest interest rate and target that one. Get off the income based repayment scam one loan at a time.
    I only have one loan. My loans are consolidated.

    Your plan of getting off Income Based Repayment would cost me like $1500 a month. I would then have $1000 a month to live on. And I would have to pay, under the normal repayment plans for at least ten years -- which is how long I have to pay my much smaller amounts ($285 now). Why the heck would I get off Income Based Repayment. Mathematically, is makes no sense.

    Quote Originally Posted by Williamsmith View Post
    Be be a loan minimalist. Easy for me to say, I really do sympathize with you.
    I am a loan minimalist. I paid off all my other debts -- car, dentist, orthodontist, ex-wife, etc.

    My only debt is student loans. And I am doing the best I can with the risks I have to assume with the information I have and the income I earn.
    的 came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

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    Senior Member Ultralight's Avatar
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    Quote Originally Posted by Zoe Girl View Post
    Are you on the plan for public service employees to have the remaining balance written off in 10 years due to your service? I would take the lower payment then, there is a day when it will be paid then regardless of how much you pay now (as long as you are current and on the IBR).
    Yup, I am on IBR/PSLF.
    的 came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

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    Stay the course UL! When you hit ten years your net worth will suddenly jump into positive territory. It's a good plan.

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    Senior Member Williamsmith's Avatar
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    When you were accumulating all this student loan debt, is this how you were planning to discharge it or didn't you really give it much thought? Serious question. Do you think that psychologically, this could have contributed to your minimalism, lack of interest in the American Dream and fear of having children?

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    Senior Member Ultralight's Avatar
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    Quote Originally Posted by Tammy View Post
    Stay the course UL! When you hit ten years your net worth will suddenly jump into positive territory. It's a good plan.
    I don't know if it is a good plan, but it is the least bad plan. All the plans I have access to are bad! hahaha
    的 came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

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