big student loans

**mek42** · 04-21-2010, 12:22 PM

Just started FPU. My student loans are more than twice our mortgage. My thought is to find a government or non-profit position in order to qualify for the 10 year forgiveness program. (I'm in the US).

I'm going to be laid off soon and will need to find new employment, so I'm thinking I may as well try to set myself up for this program.

BS1 will be finished as soon as NY State tax return arrives. When I e-filed, I had it go direct deposit to the e-fund savings account. I'm on the fence as to whether I should use paycheck money now for this since NY is delaying tax returns or just go ahead and get started on BS2 with the unsecured consumer debts.

Interested to hear what folks here think of this idea.

Please be gentle and thanks!

**Greebo** · 04-21-2010, 12:30 PM

Originally Posted by mek42

Just started FPU. My student loans are more than twice our mortgage. My thought is to find a government or non-profit position in order to qualify for the 10 year forgiveness program. (I'm in the US).

I'm going to be laid off soon and will need to find new employment, so I'm thinking I may as well try to set myself up for this program.

BS1 will be finished as soon as NY State tax return arrives. When I e-filed, I had it go direct deposit to the e-fund savings account. I'm on the fence as to whether I should use paycheck money now for this since NY is delaying tax returns or just go ahead and get started on BS2 with the unsecured consumer debts.

Interested to hear what folks here think of this idea.

Please be gentle and thanks!

Of which idea? Getting a job that offers forgiveness? Or using the paycheck money to start building up BS1?

On the latter, absolutely. You should take a look at the Expanded Baby Steps - Stolen from MYTMMO.com, and follow those, REGARDLESS of where the income is coming from.

Note that Student Loan debt is BS2 debt, no matter HOW large the student loan debt.

May I ask why your SL's are so large? And what is the nature of your career?

**mek42** · 04-21-2010, 12:57 PM

Originally Posted by Greebo

Of which idea? Getting a job that offers forgiveness? Or using the paycheck money to start building up BS1?

On the latter, absolutely. You should take a look at the ..., and follow those, REGARDLESS of where the income is coming from.

Note that Student Loan debt is BS2 debt, no matter HOW large the student loan debt.

May I ask why your SL's are so large? And what is the nature of your career?

Thanks. So I should fund the BS1 fund with paycheck money now and then when the NYS return arrives either just leave it in BS1 fund for little more than 1K or use it for debt reduction.

Why are the student loans so big? Because I was in school a long time and learned late-ish in life that one should have a plan to acheive by going to university instead of going to university for university's sake.

My current career is analytical chemistry in the pharmaceutical industry, but I am considering a career change to accounting or actuarial.

**Greebo** · 04-21-2010, 01:07 PM

Originally Posted by mek42

Thanks. So I should fund the BS1 fund with paycheck money now and then when the NYS return arrives either just leave it in BS1 fund for little more than 1K or use it for debt reduction.

Yes - walk the baby steps. You can tweak BS 1 a little if you want, but not too much. The small EF is intended to keep you motivated - "I NEED To pay off this debt NOW so I can get MORE money in the bank for emergencies..."

Why are the student loans so big? Because I was in school a long time and learned late-ish in life that one should have a plan to acheive by going to university instead of going to university for university's sake.

Oh I don't know about that. I went to school for school's sake - but I did it w/o debt. IMO the piece of paper isn't the highest goal of an education.

My current career is analytical chemistry in the pharmaceutical industry, but I am considering a career change to accounting or actuarial.

And your Student Loans are larger than your mortgage? Wow.

At your current salary, how long to pay off the loans?

**mek42** · 04-21-2010, 01:28 PM

Originally Posted by Greebo

At your current salary, how long to pay off the loans?

Right now with all of our other consumer debt we don't survive if I was making payments. From a cash flow perspective, it is cheaper to take 2 classes a semester at community college (to qualify for deferment) than to make payments.

Part of the 10 year forgiveness thing is a reduced payment plan amount.

We have just started doing written budgets and I'm not at a point yet to be able to quantitatively answer your question. We haven't done a budget yet for when I get laid off and am on unemployment.

Right now we think we can have all credit cards above 20% paid off within a year. Then another year for the rest of the cards and the car. We just made our very first balance sheet (liabilities only) this week. Need to make written plan for how to get these cards paid off.

**Greebo** · 04-21-2010, 01:30 PM

Hang in there - I know it's a bit overwhelming right now.

Sounds like the 10 year plan for forgiveness might be a good plan - *IF* you will be doing work you WANT to be doing.

**kita** · 04-21-2010, 06:07 PM

Read the fine print of the forgiveness program. Do you have to pay back and then after 10 years it forgives the rest of the loans? Do all of your loans qualify? Those silly initials before/after the loan names actually mean stuff. GSL, Perkins etc. Is there a monetary limit to the forgiveness? ie,$5000 or such.

**ladykemma2** · 04-21-2010, 07:32 PM

teaching chemistry?

**mek42** · 04-21-2010, 08:10 PM

They're all Stafford loans. I'd need to do a Federal Direct consolidation. I've applied for an adjunct faculty position at a local community college. High school would be more expensive to retrain to in my state than accounting, and I don't know that I'd enjoy high school teaching.

**McD** · 04-21-2010, 09:29 PM

This site has some very good resources regarding the qualifications needed for the loan forgiveness.

I have quite a bit of student loan debt as well. It sucks.

We are slowly but surely paying it back.

**mek42** · 04-21-2010, 10:52 PM

Thanks for that link. I'm having difficulty determining if Excellus Blue Cross is a 501(c)(3) non-profit, so maybe trying to get an actuarial position there won't qualify.

**kita** · 04-22-2010, 10:40 AM

I doubt they are 501c. I believe that is a national designation and in their 2008 financials it says:

The Company is subject to federal corporate income taxes
but exempt from state and local taxes in New York.

But, while it would make your income higher, working there and part-time at the community college might allow you to qualify for the loan forgiveness program. Also be sure the community college qualifies....

**CPA-Kim** · 04-27-2010, 07:58 PM

Teaching at colleges doesn't qualify. Why not focus on making as much money as possible even if you have to take on several jobs?

**kita** · 04-27-2010, 08:15 PM

According to the website provided by Mrs. M teaching at a college does qualify. Of course, I would get it in writing by the loan people before I trusted anything...

The website says....

Employment: The borrower must be employed full-time in a public service job for each of the 120 monthly payments. Public service jobs include, among other positions, emergency management, government (excluding time served as a member of Congress), military service, public safety and law enforcement (police and fire), public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations), public education, early childhood education (including licensed or regulated childcare, Head Start, and State-funded prekindergarten), social work in a public child or family service agency, public services for individuals with disabilities or the elderly, public interest legal services (including prosecutors, public defenders and legal advocacy on behalf of low-income communities at a nonprofit organization), public librarians, school librarians and other school-based services, and employees of tax exempt 501(c)(3) organizations. Full-time faculty at tribal colleges and universities, as well as faculty teaching in high-need subject areas and shortage areas (including nurse faculty, foreign language faculty, and part-time faculty at community colleges), also qualify

**mek42** · 04-28-2010, 03:34 PM

Let's take the forgiveness option off the table for the moment. I still think that in my situation, Mr. Ramsey would counsel to pay the house off before the student loans. My rationale is that the mortgage is significantly smaller, has higher interest rate and has a greater impact on my family should I die while still indebted. Meaning, my wife will still be responsible for the mortgage payment if I die before we pay it off, whereas the student loans (all of which are of the Stafford variety) are assumed by the government should I die while still indebted. (This is my understanding of the Stafford loan, I'd love to hear either confirmation or proof that I'm incorrect).

Am I way off base in my understanding of Mr. Ramsey's teachings? If so, how?