Paying off massive debt -how do I interpret the federal repayment calculator?

I am using studentloans.gov and using the repayment calculator to estimate what type of monthly payment I could be dealing with as I graduate from Georgia Tech. I know there are many variables with what my real debt, taxfiling status, and income may be, but I am confused with the many different choices of repayment.

I have the standard payment plan where the monthly payment is $1,395 per month for 120 months.
There are a few that are very straightfoward.
However, I hit the REPAYE plan. I spend $416 - $554 per month for 64 months and $29,995 total. What happened to the other thousands of debt?

Then there is the income-contingent repayment that says $235 to $269 per month for 132 months and $33,210 total.

Are these cheaper repayment plans even a possibility or how would I go about paying off a standard loan in the first place. Can I start with a 300 month repayment so I can establish myself with retirement and maybe a family and then reconsolidate and start making huge payments?

You have $130,000 or so in debt, right?

All of that is not federally funded…right?

For your federally funded loans, you should be able to do income based repayment. It’s based on your income.

I don’t think you can choose $300 a month…unless your income is low enough for that amount to be applicable,.

You are not already at GT, right? Who is co signing for these loans?

When you are looking at income based repayment plans, it is assuming you will have a certain income annual income increase (5%, I believe) and will pay steadily in an IBR with that annual adjusted income. You will eventually have some debt forgiven on these plans … the debt “goes away,” but you pay income tax on it in the year it is forgiven. As I remind my students, that means you will pay about 30% of the amount forgiven ALL AT ONCE. I encourage them to try to pay off their loans as quickly as possible, rather than think having a loan forgive is ideal.

@clightfield24

Are you you really going to borrow $130,000 plus for your undergrad college educations?

Here’s a funny thing. A lot of aerospace jobs will require a security clearance.
The questionnaire is available online if anyone cares to look for it. As I recall, debt is one of the areas they get ask about.

Be advised.

Are you at GT now or are you considering it?

When S was applying for jobs, prospective employers WERE interested and concerned about debt of applicants. His not having any debt was one of the factors that helped his application rise to the top.

SF86

https://www.gsa.gov/portal/forms/download/116390


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I was also accepted to the University of Minnesota for Aerospace Engineering, which isn't near the caliber that Georgia Tech is for aerospace engineering. However, being from South Dakota, I qualify for in-state tuition to Minnesota. The total cost each year is around $26,000. Assuming I do not receive any scholarships at all, $100,000 in debt is astronomically better than $200,000 in debt.

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Oh my!

You can’t afford either school.


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However, I hit the REPAYE plan. I spend $416 - $554 per month for 64 months and $29,995 total. What happened to the other thousands of debt?

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The other debt isn’t showing because the other debt will NOT be a federal student loan. You’ll have to get that money elsewhere with a parent qualified to cosign.

That $30k total is the repayment of the $27k federal loans of 5500, 6500, 7500, and 7500.

No, you will not be able to arrange $300 payments because those cosigned loans wont’ be income-based.

If these were all government direct loans you could combine them and pay the REPAYE or IBR plans. Whatever is left over after paying for 240 or more (20-25 years) could be written off. You’d have to pay the taxes on that as income in the final year, so if $40k in loans is being written off, you’d pay the tax on $40k increased income that year.

But that’s not going to happen because for undergrad, you are limited to at the most about $40k in direct loans ($5500/6500/7500/7500, maybe an extra year, maybe some extra if parents don’t qualify for plus loans). You’d have this $30-40k in direct loans on the REPAYE or other plan, PLUS whatever private loans you have. You can’t combine them into a federal loan.

Agree with the other poster you cannot afford either pick another plan or different career!

You posted about GT and Minnesota not being affordable and requiring a lot of loans in March. Did you ever apply to UAH and did they offer you a scholarship?

Did you improve your ACT enough for UAH?

@clightfield24 Just to make sure that I have this right: Are you still in high school, trying to decide what universities to go to, and therefore trying to figure out what the consequences will be of the debt that you might be taking on?

Based on other comments I am thinking that I am missing some context.

Girl. Look. From one student to another –

When I was at Northrop Grumman, as a nobody high schooler, I made the same exact wage as my coworker from Stanford.

When I was at SpaceX, as a nobody high schooler, I made the exact same wage as my roommate from Stanford, my friend from UC Berkeley, and everybody else interning in engineering.

When I was at Microsoft, as a nobody college student from a nobody college, I made the exact same salary as my coworkers from Harvard, the University of Michigan, and my roommates from MIT and Georgia Tech.

If you have bada** skills, you will end up in the right spot in life no matter what. I don’t think there is much sense in paying so much money–that you don’t have–for a degree in THE LEAST prestige-dependent field ever (engineering). I make the same money as everybody else: they’ll graduate with a fancy name degree and I won’t. And it has NEVER mattered.

One more thing before someone chimes in: those bada** skills don’t just drop into your lap because you’ve gone to a top school. You have to work for them. Same goes for top internships: they don’t get handed to anyone.

The kind of person you are is going to persist no matter where you go. If you’re the kind of person who can succeed at GT, you are the kind of person who can succeed anywhere.

Again, the payment calculator results that this student is seeing is based only on the $27k total of fed Direct Loans. It’s not including the massive other loans he’d need to take at private banks…and those don’t reduce payments based on income.

this high school senior needs to read and reread @CourtneyThurston 's posts.

Then, in his mind, fast-forward a few years. He’s working, he’s got huge monthly loan payments. He can’t afford to marry, buy a home, have kids, etc. In the offices next to his, he’ll have colleagues that went to a variety of schools…and they’ll be paid the same as he. The colleagues with minimal or no loans are moving on with their lives: buying homes, getting married, having kids, traveling, buying a nice car, etc. THEY’RE NOT burdened with $1000+ a month loan payments!

How do you think you’ll feel at that point? I imagine pretty frustrated. I imagine that you’ll feel like you screwed-up big-time. I imagine that you’ll feel like you dug yourself into a hole that was never necessary.

I think he is putting in incorrect data. If he put in only his $27k in direct loans, his repayment wouldn’t be $1300 per month. He’s incorrectly putting in that he’ll have $130k in loans, thinking all loans are the same and all will be eligible for REPAYE of IBR or other federal programs. They won’t.

If you want to know what the repayment will be, you have to group each type of loan and then figure out the repayment for that group, and then add all those payments together to get a total monthly payment.

Have you considered the weed out potential at GT as a financial risk? If you haven’t gone in with the kind of prep your peers will have? in July you had an ACT of 30 and had never taken a physics class. You have no mention of APs. There must be something I am missing.