? paying off student loans

[cuadrado]

My big financial goal this year was to pay off the remaining $25k of my federal student loans. I was getting ready to pay them off in March but then COVID hit and the government put my loans in forbearance with 0% interest. This is supposed to be until September but I think they will extend this since COVID doesn't seem to be going anywhere.

So far I have been paying the regular payment, except allocating the entire payment to the loan that had the highest interest rate. My loan interest rates (previously I guess) vary from 2.5% all the way up to 6% - I have about 7 different loans all lumped into 1 account. I just paid off the one with the highest interest rate yesterday so now I'm re-evaluating everything.

So here are my questions:

Is anyone holding out to see if Biden is elected and will do something about remaining student loan debt? Would you continue making the regular payment even though they are 0% interest?

We don't have CC debt and already have a lot in savings / retirement. We are saving up to pay cash to build a garage. I do have a car payment that is at 2% interest. Both of our jobs are secure during this crazy time.


Thanks!

[Susie]

Jul 3, 2020 16:48:14 GMT -5 cuadrado said:

Is anyone holding out to see if Biden is elected and will do something about remaining student loan debt?  No, I'm KOKO.  I just refinanced a couple federal loans so they're now private with Earnest, and paid off a private loan.  I'm not expecting any relief on any of them, so I'm just making the best financial decisions I can to manage and pay off the debt that we've got - which between us is around $96k, down from a high of about $260k.

Would you continue making the regular payment even though they are 0% interest?  I'd probably pay off the car early rather than 0% SLs.

[tcu2003]

What do you have next in your car? I’d pay off that or the SLs, if for no other reason than to make my life simpler with one less thing I have to pay every month.

[jentervention]

I’ve been rolling my regular student loan payment into our debt snowball. Student loan is last in the snowball anyway.

I would focus on paying off the car.

Some loan forgiveness would be great, but I’m not counting on it.

[ellipses84]

I’m not optimistic about student loan forgiveness any time soon, regardless of who is elected. I could see a lower interest rate option or forgiveness for people who were working towards current options and denied on some technicality, not not forgiveness for all.

If you want, you could save the money and wait it out until the interest rates go back up from 0%, then decide what to do. We paid off DH’s final student loans during the Covid crisis because they were higher interest and small amounts left compared to mine. It feels so good to have them gone. If I had the money and a lot in cash savings, I’d probably pay them off. Or pay off the car now and put the car payment amount into savings to pay off the student loans in a few months.

I have about $8k left at a low interest rate in my name that was the wrong type of federal loan to qualify for the CARES act deferral, so I’m still paying the typical monthly payment. I also have a $$k low interest loan in my mom’s name that I’ve always paid the payment for, but there’s a slim chance hers could be forgiven (she thought she was eligible a couple years ago but wasn’t). Also not eligible for the CARES act so I’m paying that too.

[cuadrado]

Thanks all - decided to keep the money in the stock market for now and then pay off the student loans whenever payments are due again. Right now my student loan company is saying they’re due in 4 months.