“Just wanted to know the best route to pay off 80k+ of student loan debt”: I have a mountain of student loan debt and no clue where to start. How can I tackle this financial burden?

Hi Money Minder,

I’m kind of lost when it comes to paying off my 80k+ student loan debt. Should I go at it aggressively? What about the SAVE plan or PSLF plan? I’m clueless about what these plans entail. Are they based on income?

Thanks in advance for any advice you can give, it means a lot to me!!

Cheers,
Jenny

Response from THE MONEY MINDER:

Hello There,

I understand the weight that comes with having over 80k of student loan debt hanging over your head, and I commend you for seeking advice on how to tackle this financial challenge. When it comes to paying off student loans, there are several approaches you can consider.

Aggressively paying down your debt involves making larger payments than required, which can help you pay off the debt quicker and reduce the amount of interest you accrue over time. This can be a good option if you have the financial means to do so without sacrificing your other financial goals.

The SAVE plan (which stands for spending less than you earn, avoiding debt, valuing assets, and enjoying the present) is a more holistic approach to managing your finances, including paying off student loans. By creating a budget, cutting expenses, and prioritizing debt repayment, you can work towards paying off your student loans while also building a strong financial foundation for the future.

The Public Service Loan Forgiveness (PSLF) plan is another option to consider if you work in certain public service jobs. This plan forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments while working full-time for a qualifying employer.

These plans may have income-driven options, which determine your monthly payment amount based on your income and family size. It’s essential to understand the requirements and implications of each plan before deciding which route to take.

In your situation, I recommend assessing your financial situation, setting clear financial goals, and creating a repayment plan that aligns with your needs and priorities. Consider consulting with a financial advisor or a student loan counselor to explore your options and create a personalized plan that works best for you.

Remember, paying off student loan debt is a journey that requires patience, determination, and discipline. Stay focused on your goal, make consistent progress, and celebrate small victories along the way. All the best from THE MONEY MINDER as you work towards financial freedom and peace of mind.