You could go into a public service profession (teaching, fire fighter, cop) or work for any government and go on on Interest based repayment and have whatever is remaining in 10 years forgiven. It’s a long repayment plan.
and any government work can do that? I was thinking about how cool it would be to work for the fed… for the FBI.
Thanks!
Just remember that if you do income based repayment…any balance forgiven in ten years will be taxed.
Here’s some information about the program that twoinanddone mentions [on the federal website](https://studentaid.ed.gov/repay-loans/forgiveness-cancellation/public-service#to-do).
This is probably obvious but this only applies to your federal loans. Your private loans will be handled separately and are not eligible for consolidation.
(Consolidation is another method that you can use which won’t necessarily reduce your post college debt but instead make it easier to pay off but you won’t be able to know if it’s worth it unless you know the general breakdown of your loans).
That’s definitely something to watch out for. However, for income tax purposes loan forgiveness as a result of service (ie public service) is excluded from income.
Transfer to a cheaper school?
Thumper, under the 10 year service program, it is not taxed. It’s only taxed under the debt forgiveness provisions if it is under the 25 year plan.
The thing about the 10 year plan is that it really only works if you can do the income based repayment because otherwise you’d pay it off in 10 years, so there would be nothing to forgive (or very little). With the public service option, you have to make 120 actual payments, so if you take deferments or miss a few payments, you have to keep paying until you pay 120. Yes, it is only federal loans, so if OP is taking private loans, it won’t help with those. If you get a good enough job, paying 10% of your income might make your loan payments pretty high anyway. It can be a real benefit in the early, low earning years, but you could end up paying off the debt anyway if your income increases in the later years.
Other ways to reduce expenses during college:
(1) get a summer job that you can resume whenever you’re home (Christmas, Spring Break) - those extra several weeks of income will make a difference!
(2) apply to be an RA (resident assistant in a dorm) as soon as you are eligible - RA’s get free housing (and sometimes free meals also). You’d probably apply freshman year to become an RA during your sophomore year. Do the job well, and you may be able to keep it until you graduate!
(3) seek out part-time jobs, such as occasional babysitting, that would cover your spending money.
(4) put yourself on a strict budget and, for every dollar you spend on anything other than books & school supplies, set aside another dollar for interest payments. (So that $1 candy bar now costs you two dollars - but $1 of that goes directly to interest!)
Thanks a bunch everybody!
We have friends (a married couple) who once out of college got their CDLs, put all their stuff in storage, and drove a truck for a couple of years. Since they were a pair they could do long hauls, and they didn’t have to rent an apartment. They paid off all their loans within two years and then were free to go about their regular lives. I don’t know if this would work for careers that would look askance on a gap in their field on their resume, but our friends look back on that time in their lives with great fondness.
Another friend moved in with parents, worked very hard, and put every penny into the debt. No car, no dinners out, no movies, nothing else but debt payments. Paid it off in four years and now is buying a nice little house of his own.
It can be done with a few years of sacrifice. Be willing to put off the rewards of your education for just a few years more and you can be free.
My kids and I are so lucky to live a few miles from our flagship where tuition is only $10k/year. Even med school tuition is reasonable at $25k tuition, and pharmacy school (ranked #5) at $16k/year.
It’s great when the least expensive option is practically in your own back yard, as far as the topic of reducing college debt.
Is co-op an option?
My husband and I had a lot (about 60,000) of student loan debt from both undergraduate and graduate school when we finished our degrees in a field that pays moderately. One way we got rid of our debt quickly was to look for jobs overseas where housing was included as part of our compensation package. We bought the cheapest car we could find when we got there, were really frugal with our eating budget and paid as much as we could each month out of our salaries which turned out to be four or five times the monthly payments expected by the bank that consolidated our loans. We paid off the debt in about 15 months, and have never been in any kind of debt since. It was a great adventure to live overseas, but for those 15 months we did not buy carpets and jewelry or go on really fancy vacations like our coworkers did, we were there to get out of debt fast.
It is a great goal to try to be as debt free as possible, but when you have to take out loans to make it happen, you have to be prepared to come up with a way to take care of that debt. When there’s a will there’s a way.
Was buying carpets overseas “a thing”?
It was where we lived then, in the middle east, and while they were significantly less expensive then similar carpets in the USA, we did not indulge (well, I have to admit I got one after the loans were paid off). Some of our colleagues had stacks of them in their houses for some future home when they returned to the states.
Smart to wait until you paid off the $60k of loans in 15 months!