I have a master’s degree in public health, and I’m aware that my student loan is quite high. Please don’t judge—I didn’t have the best guidance at the time and just wanted to attend a well-known school.
I’m currently on the SAVE Plan, which means I have $0 monthly payments and $0 interest, just the principal balance. They based this on my income from two years ago. I’m only two years out of grad school and expect to make $200k in the next three years.
My student loan feels overwhelming and shameful. I’m unsure whether to stick with making minimum payments until the loan is forgiven in 25 years or to pay more than the minimum to reduce the balance faster. Will this decision affect my ability to buy a house in the future? Aside from this debt, I have no other financial obligations, my credit score is 755, and I’m turning 29 this year. Any advice would be greatly appreciated thanks!
With your current $0 payments and interest under the SAVE Plan, you’re in a good spot for now. Since you expect your income to rise, consider making extra payments if you can, as it will reduce your principal and interest in the long run. This can also help with future financial goals, like buying a house, by improving your debt-to-income ratio. Your strong credit score is a great asset, so managing your loans proactively could benefit you overall.
It can be difficult to balance a $125k salary with a $113k student loan debt, but it is doable with a good plan. Find out what your loan interest rates are. Pay off loans with higher interest rates first. Examine the various repayment schedules that your loan servicer has to offer. Income-driven repayment programs have the potential to reduce monthly payments over time, but they may also increase the overall amount paid. If your credit is strong, you might be able to save money on your total loan costs by refinancing to get a cheaper interest rate.
Create a detailed budget to track your spending and identify areas for potential savings. Explore additional income streams through freelancing or part-time work. Consider consolidating debt to potentially lower interest rates.
Please don’t judge—I didn’t have the best guidance at the time and just wanted to attend a well-known school.