Some good student loan posts should be popping up in the next couple of months

Student loans start accruing again on Sept 1st, and payments will be due in October. There are a bunch of new programs and acronyms making a simple transaction (borrowing money, and paying it back) even more convoluted than before. With these $300-$1,500 payments looming over the horizon, student loan posts are starting to pop up. As has been shown on the Caleb Hammer show, a decent amount of people don't even know what their payments will be because none have had to be made in the past three years.

Sometimes going to college and taking out a loan, confident and optimistic that repaying that loan will be manageable and the cost will be offset by the higher salary you can expect to fetch with your fancy degree, will be worth it. And perhaps it will be (maybe even for most) but…sometimes it ends up being the worst decision you will ever make. It will haunt you. It will make you feel hopeless. And it will affect your quality of life for decades. I took out loans back in 1993/1994 in my final year as an undergraduate. $8,000. I took two more in 1994/1995 for graduate school. $17,500. After graduation I landed a job as a waitress. Quickly, ccard debt and loan payments crippled me. I filed a Chapter 13 bankruptcy in 1997. The loans were included in the bankruptcy and received payments (although minimal) throughout the five years that ensued. Upon completion. I was notified that I now owed $38,581 and should consolidate the loans which I did (these were FFELP loans). February of 2003, I start making standard 10 year payoff payments…until 2009 when I discover IBR plans. I was elated. Payments dropped significantly, varying year to year with no rhyme or reason. One year $190/month, the next year $110 with no significant change in salary. Currently it’s at $245. Last night I did a loan consolidation with the Dept of Ed. I didn’t even know you could do that. This is the only way to get “forgiveness” because of the hybrid nature of my loan. Not gonna qualify for the $10,000; this is about riding out the clock. Before last night I owed $30,521. Today I owe just over $40,000 (capitalized interest). I have been given a 25 year timeline, starting in 2/2003. No credit for the undergrad loans, no credit for the six years of partial payments prior to the consolidation. No pause in payments for Covid. New monthly payment $326. I have made 228 payments since 2/2003 totaling $43,000. I paid about $1,500 before 2/2003. I will now pay another $23,000 before this is over. Maybe. It’s all subject to change. Hopefully this cautionary tale will help you avoid the potential catastrophe of poor choices when deciding to take out loans.

OP here managed to jump from basically one IBR program to another to lower her monthly payment over the past three decades ultimately accomplishing nothing. IBR is a recurring thing you'll see in a lot of posts.

I started with $240k, paid the minimum for about 3 years. When the pandemic hit and the interest pause went into effect (I was at $230k at that point) my wife and I decided to make as big of a dent as we could. We live off of her salary and every dime I have made over the past 3 years went to loans. Today I will be making a payment to put me under $50k. Just having $50k left feels like such a relief. Make a plan, stick to it. It’s been a very good exercise in discipline and I feel like we will be very well prepared for not overspending when the loans are paid.

A rare story of someone actually paying down their loans. Here are some responses by people who don't know why they've been making payments for years and the balance hasn't gone down:

I'm actually amazed that your principal went down if you were only paying the minimum

I don’t understand how you had made progress in 3 years. I don’t doubt you, i just have been paying for 11 years on an income based plan and still owe more than i borrowed :/

Also in this thread are some future posters of "we've been paying for 20 years but still owe more than we've paid. What's the deal?"

I married an attorney and we have combined amounts of about 800k. We have kids and file jointly as we have similar loans and similar salaries . We are on income based repayment plans. One of us is pursing PSLF and the other will be pursuing the forgiveness associated with REPAYE plan at 25 years.

We always viewed as a bill, like you pay a mortgage or electricity etc. we keep the bill as low as possible through the different income based plans and account for it in our budget and live our lives. We don’t view the bill as something that needs to alter our path in life . We both have lots of earning potential and it is recently been realised . It took my husband from a tier 4 law school about 7 years to get there but he always made good money as he had a clinical degree as well (hospital work in compliance and now counsel).

So I think overall figure out how you want to approach this- some people are not comfortable carrying a long term balance and have to get rid of it asap. We don’t even think about, it’s just s bill to us and we pay it. Fundamentally life is short, you don’t get time back, postponing life to pay off debt is not something we value so we didn’t do it.

Final one I stumbled upon.

Scenario I need help on. I have $160k in student loans. I have been working in the private sector but getting burned out and am looking for a public sector job. I will be taking a paycut. I have $50k for which I was planning on dumping into my loans before sept 1st. Should I still do that or should I conserve my money and pay the least possible amount on my loans since they will get forgiven in 10 years under PSFL. Let’s assume I’m doing the 10 years in public sector.

Advice says to just settle for his soon to be government job for the next 10 years and hope PSLF comes through. Ignoring the fact he didn't really seem to get this guys point, OP really shows how well he's thought this through with this response:

A lot can happen in 10 years. I joined the military thinking I would do 20 years of service and got out after four. I’m currently in the process of getting a job with my local government now, but I’m not waiting around until 2031 to have my debt forgiven. If you have the financial means to pay it off sooner, do it. Public sector has a lot of trials and tribulations in and of itself, I would hate for you to pass up the opportunity to be closer to debt-free under the assumption that you will be working in public sector for the next 10 years of your life, only to have some thing happen with your job or your availability and disrupt your employer.

Your right, hypothetically I would stay the 10 years…. But I’ll still have the 50k handy in case I do leave ( I know I’ll loose a few K to interest)

His balance will be accruing like $7k+ every year on this plan.