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re: Student Loan Planning/Strategy
Posted on 12/26/14 at 9:25 am to LSUJay13
Posted on 12/26/14 at 9:25 am to LSUJay13
Consolidation (which should really be called refinancing) can affect the loan interest tax deductibility. Unless your rates are significantly higher than the refi rates, it's not very useful.
Posted on 12/26/14 at 1:01 pm to hungryone
Thanks for all the advice, everyone. Lots of things to think about and I appreciate them.
I'm a Fed employee (yeah, I know... Working in the public sector is not something I want to do long-term, but the job is a really good one for a first job and in an area that I think the Fed gov't is beneficial) so I definitely have looked into the student loan forgiveness, but it doesn't seem like a reasonable option (unless I stay for awhile which, again, is not something I want to do). The interest tax deduction is interesting, and something I didn't know.
I would be fine with paying the minimum monthly payments if I wasn't thinking about grad school. But since it seems (based on the job I'm in and my general planned timeline) I want to shoot for it in August 2017, I'd like to have at least the 6.8% payments gone by then so the interest isn't accumulating on those while I'm in school. I currently put in 5% to a TSP (sort of like the gov't version of a 401(k)) and it's matched up to 4%. Should I still invest more in a separate Roth IRA?
And lastly, I'm curious about the posters saying I should attack B first. My rationale was to try to reduce C quickly in order to lower interest. For those saying to go after B to get rid of it, is that more just for a peace of mind/psychological benefit, or is there a tangible reason?
Again, thank you, everyone.
I'm a Fed employee (yeah, I know... Working in the public sector is not something I want to do long-term, but the job is a really good one for a first job and in an area that I think the Fed gov't is beneficial) so I definitely have looked into the student loan forgiveness, but it doesn't seem like a reasonable option (unless I stay for awhile which, again, is not something I want to do). The interest tax deduction is interesting, and something I didn't know.
I would be fine with paying the minimum monthly payments if I wasn't thinking about grad school. But since it seems (based on the job I'm in and my general planned timeline) I want to shoot for it in August 2017, I'd like to have at least the 6.8% payments gone by then so the interest isn't accumulating on those while I'm in school. I currently put in 5% to a TSP (sort of like the gov't version of a 401(k)) and it's matched up to 4%. Should I still invest more in a separate Roth IRA?
And lastly, I'm curious about the posters saying I should attack B first. My rationale was to try to reduce C quickly in order to lower interest. For those saying to go after B to get rid of it, is that more just for a peace of mind/psychological benefit, or is there a tangible reason?
Again, thank you, everyone.
Posted on 12/26/14 at 11:04 pm to hungryone
quote:
Consolidation (which should really be called refinancing) can affect the loan interest tax deductibility. Unless your rates are significantly higher than the refi rates, it's not very useful.
I guess these guys know it all. Not!
I had mutiple student loans from the early 90's that I was able to do a one time consolidation with my lending company at the time (Sallie Mae) and was able to keep it as a student loan with an overall reduction in interest rates. At the time my reduction amounted to a 6% rate, but that was a good rate at the time. If I were you I would call your lender and ask about combining your loans with an overall lower percentage rate now that you are out of school. I promise it is possible, regardless of what these guys say. Think about how much you could save if all of your loans were at 3% or close to it with no penalty.
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