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Old 06-12-2016, 11:59 PM   #41
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Hi there! From what I understand, if federal loans are taken out prior to the marriage, the loan is discharged upon the borrowers death. That, coupled with other "financial podcast" advice to never cosign has us confused!

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Old 06-13-2016, 04:47 AM   #42
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Not to be a Debbie-downer I think divorce would be a bigger issue then death. At your age a term life insurance policy to cover your loan would be very inexpensive.

Can you get the exact numbers on how much money you would save with a co-signer. I mean dollar amounts not %. I might re-fi and keep making the higher payment amount just to knock-it out more quickly. The payments are coming out of your household income anyway, I'd probably just do the co-signing. But you are the one who choose to turn away from the debt forgiveness job, so you should talk that over with your hubby-to-be. You haven't really said what he thinks about your bringing all the extra debt to the marriage.

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Old 06-13-2016, 08:45 AM   #43
Dryer sheet wannabe
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Agreed. With disability being much more likely than death, and divorce much more likely than both combined, it still makes me uncomfortable to have a cosigner and my husband-to-be agrees. We do each have term life-insurance that would be enough to cover our mortgage (though we are now looking at selling that house, but will probably keep the term policy in place for both of us). My fiance is also very supportive of my current career path and willing to help me pay down the loans, especially after his debt is forgiven in a few years, at which time we should be able to dedicate another $1300 per month toward the payment.

There are a few options when it comes to "refinancing," the first being what I am doing now, which is refinancing out of the IBR program into a "standard, 25-year repayment plan. The payment would be a little over $1600. If I kept with IBR, the loan balance would be forgiven in another 23 years (assuming I never paid it off with the income-based repayments, but if my income rises over the years as anticipated, eventually the payment could be very large (as it is 15% of my pay). The interest rate is 6.75% on this loan.

The other option, which I want to do as soon as I am eligible, is to refinance with another company (private bank as opposed to Federal Loan Servicing) to a 20 year loan, which I believe I can get an interest rate around 3.5% - 3.75%. This is the one that I would currently need a cosigner for, but the payment would be around $1400.

My other thought is to stay with the 25 year payment and try to pay the balance down as soon as possible (by paying over the $1600 a month) and then apply for private refinance again once our other debts are paid off and I have one more salary increase under my belt.

Hope this clarifies!

Thanks so much,

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Old 06-13-2016, 12:40 PM   #44
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Originally Posted by Golden sunsets View Post
I must admit I'm somewhat appalled that one would take a job that enabled them to extinguish significant school debt (at taxpayer expense) only to quit the job once the debt is discharged. The OP seems extremely earnest and it is not she that I am put off by, but the concept that one would intentionally rack up such enormous debt with the goal that some government program will erase it. I also would hope that six years of additional post grad education would mean entry into a line of work that pays well, otherwise how would one be able to pay off the associated debt of so many years of medical school.
I think your objections are misguided... if you have objections with the notion it should be targeted to that the government offers such a program to begin with and not those who participate in it.

To me, the debt forgiveness is just another aspect of the participant/worker's compensation and helps attract better people and some people probably rely on the existence of those programs in making career decisions. I see nothing wrong with that... it is similar to educational benefits extended to active duty military or veterans.. a benefit they earn and in many cases plan on and is part of what motivates them to serve.

Similar protestations could be made to wealthy early retirees who organize their affairs to qualify for Obamacare subsidies, property tax relief, 0% tax on dividends and capital gains, etc.
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Student loan alarming statistics
Old 06-15-2016, 06:00 AM   #45
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Student loan alarming statistics

The article poses some serious questions about the safety, the value and the future of student loans.
The delinquency rate has skyrocketed since 2012 to be the highest of all types of loans, and the value of a college education has dropped.
Delinquency rate is now 11% vs. credit card delinquency rate of 7.6%. (90 days past due)
An interesting statistic... up to 49% of college graduates work in jobs that have no requirement for a college education.
Eye openers.

Visualizing The Over-Education Bubble - Student Loan Delinquencies Are Soaring | Zero Hedge
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Old 06-16-2016, 05:01 PM   #46
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Ashley, I have done just a little research into the student loan repayments for a friend and a couple of things stand out for me.
First, keeping federal loans rather than converting to private is a really good idea because of the more flexible terms, like IBR. You simply have more options than with private.

Second, you are right to be wary of co-signing. That removes some favorable terms in a worst case scenario (death or divorce).

Third, disability insurance is vital for both of you. If you can get policies that are paid with after tax dollars, you should do so. The benefits are then not taxed.

I really like the 10 year forgiveness program, but understand if it isn't right for you. Tough call but it is your debt and your choice.

You and your spouse should decide together what expenses are vital and what aren't. Look at every category, hard. Some things that seem non-discretionary, aren't. Or lesser/cheaper versions (cars come to mind).

You are obviously smart folks. Paying attention to the details will pay off for you, now and in the future. And remember what looks etched in stone now will most certainly change in the years ahead, so try to keep flexibility foremost in the plan.

Good luck!
“One day your life will flash before your eyes. Make sure it's worth watching.”
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Old 06-17-2016, 05:04 PM   #47
Dryer sheet wannabe
Join Date: Jun 2016
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Thanks so much for your reply, Sarah. These are great thoughts and you are absolutely right about looking at every category in the budget – we have started doing this and I think we are already making some progress!

Thanks again,


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