Comments on: Aggressively Pay Down That College Debt

By: Vanessa

Vanessa — Mon, 15 Sep 2008 18:23:09 +0000

It’s obvious we need to do a better job teaching people about money. I’ve done some work with Junior Achievement. They have a lot of programs in this area. Here’s their site, for anyone who is interested http://www.ja.org.

By: 25 Tips, Ideas, Resources for Paying Back Student Loans — Broke Grad Student

Mon, 08 Sep 2008 11:02:49 +0000

[...] Aggressively Pay Down That College Debt [...]

By: investmentplayground

investmentplayground — Thu, 17 Jul 2008 13:43:01 +0000

I’ve gotten into the habit of making two payments every month, immediately after getting paid. This way you’re paying down faster but you don’t really feel like you have less money.

By: Debra Watts

Debra Watts — Fri, 27 Jun 2008 03:39:02 +0000

I wouldn’t pay off the student loans ahead of time at the expense of having a savings account or investing in 401k.

By: Debt Hound

Debt Hound — Tue, 03 Jun 2008 01:59:02 +0000

Private loans have higher rates than federal loans: 6-7% compared to 2-4%. In such cases, paying the high-interest loan is better than investing elsewhere.

By: Fabulously Broke

Fabulously Broke — Sun, 18 May 2008 15:03:02 +0000

I agree with Dave’s comments, but personally, I do NOT want debt hanging over my head .. it’s like I can’t start my life until it’s been cleared. that’s the way I feel.

Besides, we get charged at 8% interest on some student loans, and the market over a long term brings 10%, but in the short term, (for me) it’s better to clear my student debt… psychologically and financially.

I still save for retirement but not as much as I could’ve if I didn’t make my debt a priority.

By: Dave

Dave — Sat, 17 May 2008 13:23:32 +0000

I don’t quite understand the rationale of paying off a student loan as quickly as possible. Student loan debt more than likely comes at far lower interest rates than say a mortgage or credit card debt. I think it should be obvious to most people that we should always pay off the hight interest debt first and then focus on the lower interest debt. However with student loan debt where most of us have consolidated we have interest in the realm of 2%-4%. Would we not be better off investing any extra money? In addition the interest payments in these student loans is tax deductible so the true interest rate could be in the 1-3% range. The question you would need to ask yourself is if you can achieve greater than 4% on money invested as opposed to paying down school loans. With rates as low as they are this is no longer possible using a savings account or CD. Over the term of your school loan however 4% should be very easy to achieve, the S&P averages 11% or there abouts so a simple monthly investment in spiders (SYMBOL SPY) could in fact be better than putting more than the minimum payment into paying down school debt.

On the morbid side federal student loan debt is cancelled upon death so if you have kids or a family they would be better served with you having put extra money into savings rather than paying down your federal school loans.

Personally I don’t have a mortgage but pay off all of my credit card debt in full almost immediately, if you have bill pay on your bank account it is so convenient to pay your credit cards even before they are due, there is no reason to pay any interest at all on a credit card. I try to invest all of my discretionary income in my brokerage account. I have about 70,000 in student loan debt that I pay the minimum on every month.

By: Credit card paid off debt free | The Wisdom Journal

Credit card paid off debt free | The Wisdom Journal — Thu, 15 May 2008 07:01:52 +0000

[...] old amount I was paying on the credit card will free up a great deal of cash that I can use toward paying off my student loans. With the amount I’ll now be paying per month, they won’t last long. There IS a light [...]

By: Miranda

Miranda — Wed, 14 May 2008 20:48:01 +0000

I agree that you should keep paying as much when you consolidate. The lower rate will help your payments go further. And I agree that it is scary that student loan debt is like having another mortgage. *shudder* That’s why we’re trying to pay it off like it’s a 10 year mortgage.

Thanks for reading my guest post here!

By: Anitra

Anitra — Wed, 14 May 2008 20:44:24 +0000

This is excellent, simple advice; and is pretty much exactly what my husband and I are doing. It’s frightening how much debt is now “normal” coming out of school; more so when you realize that the lenders expect you to be paying on that debt as long as you would for a mortgage.