Over $300k in student loans - help.

[friendlyskies]

I am single, in my late 20s, and I have about $65,000 in private loans and $255,000 in federal loans. I was a minor when taking out the majority of those loans over 10 years ago, and basically at the behest of my parents, who said they needed the money for living expenses. I am no longer on speaking terms with them. I have consulted with a lawyer since, who was sympathetic but advised that legal costs and the drawn-out nature of the legal system would mean that I could end up with even more debt and it could easily take 8+ years to reach a resolution. I have decided against a lawsuit, especially since I have recently heard that my parents are in poor health (one has a terminal diagnosis).

I am a relatively new grad RN. The average starting salary here is about $58-60,000. I am completing an NP certification (paying out-of-pocket) and expect to complete it in 2 years, which will boost my earning potential. However, even if I live as a pauper, I will spend at least 10 years paying off the loans.

I have spoken to several advisors and PSLF is an option if I continue working for a nonprofit hospital or other organization for 10 years, which is still a long time, but at least it frees up some money for retirement/investment/etc. If PSLF fails, I can use that money towards paying off the loans. It's obviously a risk. Does anyone have any other ideas on what I could do? I've looked into the NHSC repayment option but I'm not sure it would help much, since most of my loans are not from nursing school.

I'm having a hard time dealing with the reality of this burden. I want to do normal things like save for retirement, maybe get married, buy a small house. It feels like I'll be losing 10 years of my life to loans that my parents used. It really sucks.

[Crystal-Wings, LVN]

Ouch!

[Workitinurfava, BSN, RN]

This makes me afraid to go for more schooling. I have my bachelors. I would definitely have a therapist on speed dial and I am not kidding. Dealing with all of that debt is majorily stressful. The job itself is stressful. I hope the best for you. Do you know anyone in another country? ?Now I see why people move away from their debt and I am not sure if it is legal though. This can be done the right way. It will be tough though. Hang in there. Remember your life is most important.

[Nurse SMS, MSN, RN]

On 8/27/2020 at 7:57 PM, murseman24 said:

Some of his advice is just plain wrong.  He advises foregoing contributing to your 401k until all of your debt is paid off and not carrying a credit card.  He has an axe to grind and has made his fortune being an extremist.  He is debt averse to a fault and any public financially literate voice thinks he's just a businessman selling a product.  He preys on the financially illiterate so they buy his products.

This is an extreme viewpoint. I never paid a raw cent for any of his materials. They are readily available on the Internet. I don't agree with everything he recommends soooo...yeah. I would not categorize myself as a "sheeple" as an above post stated. His strategy gave me recovery from bankruptcy and foreclosure, four college degrees without an ounce of debt and a mortgage paid for in 9 years. All of the above took about 15 years to come to fruition. My current credit rating is above 820. Unheard of for someone with the financial troubles I have recovered from.

I don't buy his religious focus and I don't follow him now that everything is paid off. I have my work income, my investment income, zero debt, paid for cars and house. I worked hard for that, using Dave Ramsey's methods. I push back on that making me a "sheeple". Some people need a good map to follow. I used it to my advantage and many others have too. And I did it without giving Dave Ramsey a dime of my money.

[murseman24, MSN, CRNA]

10 hours ago, Nurse SMS said:

This is an extreme viewpoint. I never paid a raw cent for any of his materials. They are readily available on the Internet. I don't agree with everything he recommends soooo...yeah. I would not categorize myself as a "sheeple" as an above post stated. His strategy gave me recovery from bankruptcy and foreclosure, four college degrees without an ounce of debt and a mortgage paid for in 9 years. All of the above took about 15 years to come to fruition. My current credit rating is above 820. Unheard of for someone with the financial troubles I have recovered from.

I don't buy his religious focus and I don't follow him now that everything is paid off. I have my work income, my investment income, zero debt, paid for cars and house. I worked hard for that, using Dave Ramsey's methods. I push back on that making me a "sheeple". Some people need a good map to follow. I used it to my advantage and many others have too. And I did it without giving Dave Ramsey a dime of my money.

CONGRATS.  His teaching is more along the lines of how to be responsible with your money, not how to invest and make the best use of it.

[londonflo]

4 minutes ago, murseman24 said:

how to be responsible with your money, not how to invest and make the best use of it.

I don't think the first thought of someone who is $300,000 in debt and makes $60,000 annually before taxes is, where should I invest my money?

Now if you are making $300,000 in salary gross and owe $300,000 that's a different story.

[HiddencatBSN, BSN]

41 minutes ago, londonflo said:

I don't think the first thought of someone who is $300,000 in debt and makes $60,000 annually before taxes is, where should I invest my money?

Now if you are making $300,000 in salary gross and owe $300,000 that's a different story.

But that’s the thing, with 300k in debt on a 60k salary, the best question actually might not be how do I pay all of this off faster but rather how do I make the most of what I have so that I’m not always struggling. And a straight debt repayment plan might not be the option when it means forgoing important years of compound interest that can be key for a non-impoverished retirement, avoiding home ownership and building equity there, etc. 

Debt snowball might be Ramsey’s phrase but the concept isn’t unique or new to him, and a focus on debt alone doesn’t take in to account the fact that wealth is often better gained by judicious balancing and leveraging of debt rather than simple elimination of debt.

[Kooky Korky, BSN, RN]

On 8/25/2020 at 6:43 PM, mmc51264 said:

Not sure how you inferred that I am taking on more debt. I am paying cash for my son to go to community college (and he is living with us, and he can get insurance through my husband until he is 26).

I was just hoping he could get a little money for tuition (I got a Pell grant).

Why not have your son work and put himself through college while you pay down your debt, interest and all?

Your son can still live at home to save money.

I have a friend who is in debt but is trying to put her kids through college.  But they are able-bodied and can pay their own way. 

Have you filled out a FAFSA?  It's been a while since I've done that but I would think that your debt level would lower the EFC.  

[londonflo]

8 hours ago, HiddencatBSN said:

But that’s the thing, with 300k in debt on a 60k salary, the best question actually might not be how do I pay all of this off faster but rather how do I make the most of what I have so that I’m not always struggling. And a straight debt repayment plan might not be the option when it means forgoing important years of compound interest that can be key for a non-impoverished retirement, avoiding home ownership and building equity there, etc. 

After paying rent, car expenses, health insurance, food and debt payment from the net income I am not sure there would be anything left for retirement planning and home ownership. It depends on where the OP lives. Income based repayment with the PSLF may be the only option. Let's hope that the 10 years passes with good health, secure employment and the continued existence of the PSLF. When the OP is in her late 30's she would still have time to address her retirement and building equity.

[HiddencatBSN, BSN]

17 minutes ago, londonflo said:

After paying rent, car expenses, health insurance, food and debt payment from the net income I am not sure there would be anything left for retirement planning and home ownership. It depends on where the OP lives. Income based repayment with the PSLF may be the only option. Let's hope that the 10 years passes with good health, secure employment and the continued existence of the PSLF. When the OP is in her late 30's she would still have time to address her retirement and building equity.

I don’t know the OP’s particulars but missing out on 10ish years of compound interest in retirement savings is a big deal and not easily replicable. Not to mention that pretax retirement savings reduces their tax burden and could also reduce payments on an income-based plan. Plus employer matching on retirement is usually capped so when doing a catch up later strategy you’ve lost out on years of that as well. Focusing only on debt repayment to the exclusion of planning for the future comes with a lot of costs to it.

 

[murseman24, MSN, CRNA]

23 hours ago, londonflo said:

I don't think the first thought of someone who is $300,000 in debt and makes $60,000 annually before taxes is, where should I invest my money?

Now if you are making $300,000 in salary gross and owe $300,000 that's a different story.

This statement was made in response to a comment on the general utility of Dave Ramsey's advice from someone other than the OP.  My advice as previously mentioned to the OP is to get on an income-based repayment program and go for forgiveness.  In this manner the OP should still have enough extra income to invest for retirement and live their life.

Even so, it looks like those on here who are fans of Dave Ramsey advise to "go all in" and pay down the debt with every remaining cent (characteristic of his advice).  This again, would be a poor choice.

[londonflo]

27 minutes ago, murseman24 said:

My advice as previously mentioned to the OP is to get on an income-based repayment program and go for forgiveness.

I am in favor of this as long as the OP enjoys good health, 10 years employment in applicable companies/positions, makes 120 separate on time payments and that Congress does not substantially change the program or eliminate it. As always, Congress is the wild card.

[HiddencatBSN, BSN]

1 minute ago, londonflo said:

I am in favor of this as long as the OP enjoys good health, 10 years employment in an applicable companies/positions, makes 120 separate on time payments and that Congress does not substantially change the program or eliminate it. As always, Congress is the wild card.

Good health and solid employment are essential assumptions in the “pay down the debt before focusing on retirement” plan too. Should the OP face an unexpected financial hardship or change in health status in say 5 years, money in a protected retirement account would be more beneficial than having shaved a few years off the life of those student loans.