My new idea: Student Loan Fund

**acidcookie** · 02-14-2007, 12:07 AM

So here I am, $17,000 in debt for school.

The good news is I still have about $5,000 of the last loan I took as an "emergency" loan in case something came up with my move across the country without money, though $2,000 will provide my summer salary this year (I don't get paid June or July).

So the deal is: All my loans are subsidized and deferred. Thus, they are gathering no interest, and I don't have to pay them until I graduate, probably in 2010.

At first I figured that this is just something I couldn't deal with until I graduated, but then I reminded myself that I've been putting $200 toward credit card debt every month for a while now (give or take some months), so why not be able to do the same for loans? I wouldn't pay them off yet as they are deferred, but figured I could budget a certain amount to my savings each month (which gives me interest).

Of course I might need some of this money for other things along the way (e.g., travel to conferences), but I like the idea that I'll have a few thousand to buffer monthly loan payments in the future.

I've got $3,000 in a CD still. Once the last $600 of my CC debt is gone, I plan to start.

Any suggestions on this?

**Cricketlegs** · 02-14-2007, 12:11 AM

It is a great plan. If you have the money then do it and take advantage of no interest.

I could easily see "snowballing" knocking this debt out.

Good luck!

**geckoace** · 02-14-2007, 08:08 AM

I think thats very smart 200 (or so) a month for the next few years will give you a great start you will be way ahead of the game

**kaykwilts** · 02-14-2007, 08:25 AM

Very smart move if you don't get tempted to use the money for something frivalous.

**acidcookie** · 02-14-2007, 08:29 AM

Well, I may have to modify this a bit. I recently consolidated my loans to lock in a fixed interest rate before rates went up and even though I was assured several times that my loans would keep their status (subsidized), my Perkins loan become an unsubsidized loan which means it's gaining interest when before it wasn't--although I haven't actually seen any accrued interest yet.

My temptation was to take the $3,000 in savings and pay off that $3,000 loan, but I felt insecure about draining my savings. So I'm thinking I might save up $1,000 or so to get some padding in, and then pay off the $3,000 loan. That way I don't accrue interest for the next 3.5 years, I have $3,000 less I can spend, and I'm $14,000 less in debt.

**acidcookie** · 02-14-2007, 08:32 AM

Er, I mean, "only" $14,000 in debt.

**i.m.cheap** · 02-14-2007, 08:36 AM

I am a little nervous about the student loan debt that DH has been acquiring. So far, it is only about $5,500, but he is a long way from being finished with his education.

**Emjo** · 02-14-2007, 02:42 PM

I think it's a great plan! I wish I would have done that when I was in school, and after when DH were kidless and making pretty good money. DOH!

**MandaRenee** · 02-14-2007, 03:18 PM

I think its a great plan. I might "borrow" your idea myself

**Telephus44** · 02-14-2007, 05:59 PM

Just to understand - you're putting money aside in a special account that you'll use to make a huge payment when you graduate? If so, I think that's an awesome plan.

And are you going to get more loans? Your post said you're graduating in 2010, and I remember getting one loan every year for my undergraduate degree.

**acidcookie** · 02-14-2007, 06:27 PM

Originally Posted by Telephus44

Just to understand - you're putting money aside in a special account that you'll use to make a huge payment when you graduate? If so, I think that's an awesome plan.

And are you going to get more loans? Your post said you're graduating in 2010, and I remember getting one loan every year for my undergraduate degree.

Yes. Thanks

And no, I won't be getting more loans. I already have my B.A. and now am getting my Ph.D. so my tuition is paid by the school. So unless something strange comes up I won't need them.

**Jill B.** · 02-14-2007, 09:41 PM

I think it is a good plan to put it aside for any emergencies. If there are none, then pay off a chunk. My DH is getting his Ph.D. and he gets summer jobs too. Maybe you could do some tutoring, or give music lessons (aren't you in music?) Then you wouldn't have to tap into the money for summer living expenses. Just an idea.

You could also try doing summer child care. Lots of people look for a summer nanny. My DD 22 lives in Philly and is a part time nanny for $12 an hour for 2 families. You can pm me if you want more info.

**acidcookie** · 02-15-2007, 10:25 AM

I have considered work in the summer, but it's tough because school doesn't really "end" in the summer for me. We are still full-time students with classes and research. The idea is that now we have "more time" to focus on our research. Last year I considered picking back up on some freelance web design. Maybe I could do that. I'll definitely look around at flexible opportunities. I couldn't do the nanny thing though. Children and I are like how a dog person with a cat allergy would be cat-sitting

**suzysaver** · 02-15-2007, 10:42 AM

Your one smart Cookie. Anything you could save in advance for something you know is coming...is a great idea. Looking ahead and planning isn't always easy and sometimes we just don't want to see it coming, but just think how prepared you will be.