Comments on: Aggressively Pay Down That College Debt

By: SchoolandUniversity

SchoolandUniversity — Thu, 19 Apr 2012 06:54:17 +0000

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By: MBa

MBa — Thu, 16 Jun 2011 11:41:18 +0000

Hi, Good article. I’m working on repaying my school loans this year. I hate the idea of long term debt and just want to get it over with, to free up resources for other, more enjoyable purchases and also to accumulating wealth for retirement. I’m making $1,000 payments and my outstanding balance is $22,000. My plan is to dip into savings at the end of this year and be done in the next 10 months or so. Wish me luck.

By: Steve

Steve — Sat, 31 Jul 2010 20:35:07 +0000

Both my wife and I have large student loan balances. I am trying to pay my loan, but my wife struggles to pay hers. She makes about $21K per year and if she paid her monthly loan it would take 80% of her take home paycheck. I started http://www.studentloanstress.com in order to vent our student loan stress.

By: Jennifer

Jennifer — Sat, 08 May 2010 03:48:12 +0000

lilyslist.com is a student loan gift registry to help pay down student loans. Save by turning regular gifts into student loan payments. The burden that students have today is overwhelming and my heart goes out to them. With three other like-minded moms I created http://www.lilyslist.com. Please chack it out to see if it can help you.

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: 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.