How to pay back your student loans

AWanderingMinstral · Jun 10, 2013

i highly recommend taking dave ramsey's course. It helped my wife and i get organized to pay off everything except our mortgage in 3 years. We paid off just over $100k on two nurse's incomes. There were several key things that helped.
1. We established an emergency fund in case something unexpected happened.
2. We made a monthly budget and adjusted it as needed during the month. This was the biggest thing as it allowed us to see we were wasting a ton of money on eating out. Eating rice and beans at home will save a lot of money that you can then throw at your debt.
3. We set up all our debts into a debt snowball from lowest balance to highest. Pay the minimum on everything except the smallest debt. That's the one you beat on with every extra dollar. When it is paid off you it gives you positive feedback that you're making progress and helps keep motivation up to continue on the next debt. Then, money that was going to the first debt is budgeted on the next smallest once the first is paid off. The snowball works!
4. Pick up extra shifts or call and use the extra money to pay on the debt snowball. Use any refund from filing taxes to pay off your debt. Delay any unnecessary expense such as vacations until the debt is paid off. Get creative. Have a garage sale to get rid of things you don't want/need and use the money to pay down the debt.
There were several things we changed to save money so we could pay off the debt faster. We stopped buying things at the hospital cafeteria. Instead we packed our own lunches. It saved money and was healthier too. I stopped buying coffee out. Instead i would drink the free coffee in our department or brew my own at home. When i cooked at home i made 2-3 times what we needed so i could portion/freeze leftovers for our lunches.
I also noted how much each interest each debt was costing me each month. As a debt was paid off we realized that money was now paying off the next debt instead of feeding the banks.

great common sense suggestions!

amygarside · Jun 10, 2013

I think the best advice is to not miss a payment to avoid additional charges.

mmc51264, BSN, MSN, RN · Jun 10, 2013

Consolidate through Fed Loan. I have 1st undergraduate, Masters, ADN I was lucky, the first one was consolidated @ 2 %, but they weight them and I am at, 3.8% for 30 years. I will pay more when I can. I am starting RN-BSN so I need to pay what I owe, but then I can pay more.

I wish people would stay away from private loans (and the $$$$ private universities)!! Staying with gov. loan, you can defer, lower payments due to financial hardship, etc. They really are more willing to work with you.

Many will reduce rates for online (direct debit) and a reduction of on-time payments after 3 years. There are lots of ways to cut costs.

I looked into the loan forgiveness, most nurses make too much money. I talked to them and I would have to have had my loans on a 10 year repayment. There would be nothing left to forgive after the 10 years!!!!!!

Also FYI: they go away when you die. Your estate won't have to pay them off like other debt. That's why I don't sweat it LOL. Mine are consolidated for 30 years and I am almost 50. My loans are going to outlive me!!!!!

I have about 60K to pay back over 30 years; payments 380/month. That's for four degrees.

karczyn2 · Jun 10, 2013

DON'T always consolidate right away! Check to see if you qualify for the HRSA nurse loan repayment program first. Once you consolidate I believe you don't qualify anymore.

tacomaster · Jun 10, 2013

LandD_RN_chica, I am also in the same boat trying to pay everything down so my wife and I can afford a house. I keep hearing that our generation, I too am in your age group, are waiting longer to get the first house because of all the student loans we have! Craziness! I hope within 3-4 years we can put down 20% towards a house.

Reno1978, BSN, RN · Jun 10, 2013

DON'T always consolidate right away! Check to see if you qualify for the HRSA nurse loan repayment program first. Once you consolidate I believe you don't qualify anymore.

You're still eligible if you consolidate, but you need to have your originating loan paperwork to establish that they were loans that were for nursing education that were consolidated.

**NickiLaughs, ADN, BSN, RN** · Jun 10, 2013

I feel like this is almost a support group. I'm paying 770/month and thats after consolidation. My husband hasn't been able to find a job since he had a illness in 2009 and our toddler is expensive. :/ We have two older cars with no payments, so that helps. I switched from the big cell phone carriers to metro PCS (it works fine in my area). We shop at cheap grocery stores and clip coupons when we have time. I was lucky enough to move from southern california and land a job in northern california or else I would still be deferring my federal student loan and selling random things every month to just get by. Now at least I can make all my payments.

Heres to hoping a major computer glitch clears us of our debt.

myelin · Jun 10, 2013

All good advice. I recommend people do the following:

1. Do not take out any private loans unless you run out of federal options (this includes graduate plus loans). Private loans can have variable interest rates, may not qualify for loan repayment programs (this is definitely true if you have a cosigner), and cannot be consolidated for things like IBR.

2. Live as cheaply as possible when you graduate and throw all the rest at your loans. Do not be a sucker and pay the monthly minimum for decades*. This is easier for those who aren't married, no kids, no mortgage, etc. I heard about someone who went to Vandy and owed like 150k, but was able to be debt free after 2-3 years of living like a student (this is someone who became a NP).

*Exception is if you are doing the PSBLF + IBR combo, in which case you will pay the minimum each month and then be debt free in 10 years.

priorities2 · Jun 10, 2013

For those who haven't taken out debt yet, check out some of the calculators online and play with them. It's really interesting to see how much you end up paying in interest on various plans.

carabels · Jun 10, 2013

You could always make bi-weekly payments towards your loan. I think you need to check with your loan provider, but basically it comes down to paying the loan off faster (almost a year earlier or so). For example, you pay $300 month towards your loan for a total of $3600 for (12) months. But if you pay $150 every two weeks, you end up paying $3900 (13) months, so making an extra payment per year. Again, you have to check with your loan provider to see if they will accept a bi-monthly payment. Good luck!

IcySageNurse · Jun 10, 2013

For anyone that DOES need private loans - I recommend a credit union! They work with you, have better terms, etc. Stay away from big banks and places like Sallie Mae.

I have a private loan from a credit union and it's 4% interest (fixed) for 25 years.

Phoenix36 · Jun 11, 2013

Don't have kids. I love em, but I'm serious. If you are just starting out and you want em --- great. But a lot of people are made to feel like they need to apologize for not having them. Of course, I live in Utah. Young couples are pressured here big time. They are an elective course.