Sometimes I get questions about dealing with student loan debt, but I no longer feel well-qualified to answer. I graduated in 2000 with roughly $30,000 in student loan debt myself, but I never participated in any government-backed repayment plan, nor did I refinance it into a lower interest loan. Roughly 70% of students are graduating with debt today as opposed to 60% in 2000, according to this NPR chart:
Once I started earning income, I did the “live cheap like a student” thing (not hard, I was a grad student for most of the time) and paid off the debt in about four years. If I had a bigger balance or a tighter budget today, I might do things differently given the current options. I know there are smart readers out there with more recent experience, so I ask you:
How did/are you handling your student loan debt?
Perhaps one of these government-backed repayment plans? If so, which one did you pick and why? Some limit your payment due to 10% to 20% of “discretionary” income, and some will even forgive the remaining balance after 20 to 25 years.
- Pay As You Earn Repayment Plan (PAYE)
- Revised Pay As You Earn Repayment Plan (REPAYE)
- Income-Based Repayment Plan (IBR)
- Income-Contingent Repayment Plan (ICR)
Did you refinance your loan privately through a student loan start-up or traditional bank? Why did you pick yours over the competitors? Some examples:
- Local community bank or credit union
- National bank or credit union like Navy Federal
Please share your experiences, positive or negative, in the comments. It will help me focus my own research. You can also .