debt regret

[Anonymous]

Anonymous wrote:

Anonymous wrote:150k student loan debt, 75k salary, 2k cc debt, just bought a house for 250k, and mortgage cheaper than my rent was (live in DC). I never thought I would own a home too, I just kept paying down the cc debt to raise credit score. So happy now.

This sounds crazy to me because the student loan debt is so high relative to income. Were these federal student loans on an "income-based repayment plan?

For me, I wouldn't be comfortable with the high debt to income ratio here.

But at the same time, I am kind of envious if you did manage to take advantage of "income based repayment" programs, and go to a better school that you could have afforded otherwise. (It would annoy me though, for folks to get a career ladder advantage over me, who compromised on schools because I didn't want huge student debt...... my student debt was closer to half my starting salary when I graduated and I've worked to pay it down.)

student loan result of a chiropractic degree and then I decided not to work in the field after completion.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:150k student loan debt, 75k salary, 2k cc debt, just bought a house for 250k, and mortgage cheaper than my rent was (live in DC). I never thought I would own a home too, I just kept paying down the cc debt to raise credit score. So happy now.

This sounds crazy to me because the student loan debt is so high relative to income. Were these federal student loans on an "income-based repayment plan?

For me, I wouldn't be comfortable with the high debt to income ratio here.

But at the same time, I am kind of envious if you did manage to take advantage of "income based repayment" programs, and go to a better school that you could have afforded otherwise. (It would annoy me though, for folks to get a career ladder advantage over me, who compromised on schools because I didn't want huge student debt...... my student debt was closer to half my starting salary when I graduated and I've worked to pay it down.)

student loan result of a chiropractic degree and then I decided not to work in the field after completion.

You were smart to purchase, esp if it was closer than renting. I purchased for the same reason.

[Anonymous]

Anonymous wrote:We owe more than this and we own a home. DH and I originally owed $315,000 together. That was about 9 years ago. We started out with DH only having a job for a year, making about $45,000. I followed him to a new city, and it took me a year to find a paying job. DH did get $50,000 in loan repayment fom the first job. Over the next 9 years we paid off about $75,000 of his loan and he owes about 30,000 now.

I still owe 142,000, but I'm in no rush to pay it off since I'm in an income based federal loan repayment program. We make about $200,000 now and own a $650,000 home. We purchased the home 2.5 years ago, and we didn't have any problem qualifying for a mortgage. Our student loan payments are about 1,300.00 per month. In six years, we will have completed our 10 years of public service in the program and the federal government will pick up the tab on the rest ($100,000 collectively).

You didn't say how long you intend on paying the loans back. We're glad we didn't wait until they were paid off to buy as we're getting equity in our home now. Also, I wouldn't be scared off from total debt vs starting pay. People's salaries generally go up over time. We just deferred payment in the really lean years. If you like public sector work, the pay and hours are great and you can't beat the income-based loan repayment. We have young children now, and working 40 hours a week has made our family life much easier. Good luck!

As a taxpayer, I don't like this. I work in a public service profession and the work is its own reward, and the benefits and hours can't be beat. Even before this income-based repayment program went into effect, we got TONS of applications for any one entry level vacancy, so the program isn't needed for recruitment.

[Anonymous]

Anonymous wrote:We owe more than this and we own a home. DH and I originally owed $315,000 together. That was about 9 years ago. We started out with DH only having a job for a year, making about $45,000. I followed him to a new city, and it took me a year to find a paying job. DH did get $50,000 in loan repayment fom the first job. Over the next 9 years we paid off about $75,000 of his loan and he owes about 30,000 now.

I still owe 142,000, but I'm in no rush to pay it off since I'm in an income based federal loan repayment program. We make about $200,000 now and own a $650,000 home. We purchased the home 2.5 years ago, and we didn't have any problem qualifying for a mortgage. Our student loan payments are about 1,300.00 per month. In six years, we will have completed our 10 years of public service in the program and the federal government will pick up the tab on the rest ($100,000 collectively).

You didn't say how long you intend on paying the loans back. We're glad we didn't wait until they were paid off to buy as we're getting equity in our home now. Also, I wouldn't be scared off from total debt vs starting pay. People's salaries generally go up over time. We just deferred payment in the really lean years. If you like public sector work, the pay and hours are great and you can't beat the income-based loan repayment. We have young children now, and working 40 hours a week has made our family life much easier. Good luck!

I think you are a troll. BS on this post. I typed the numbers into an "income-based repayment calculator" and you wouldn't qualify for IBR or would barely qualify. Unless your income DROPS dramatically -- you will end up paying off your loans yourself.
http://www.ibrinfo.org/calculator.php

[Anonymous]

Anonymous wrote:12:13, why are you looking to pay it down so quickly? Are your rates bad?

She would rather not feel like she has to keep the salary she has to pay her loans. Any reason to keep them around like a pet?

[Anonymous]

I don't think you understand the IBR system. The payments are calculated off your AGI, not your actual pay. We invest in our TSP, and we get many deductions - including student loan interest, child care, and mortgage interest. Our AGI is under 150000, which gives us lower payments. Also, if our income continues to rise, the payments never go over the original straight 10-year payment amount. This is still a net savings since the savings in payments thus far will not be made up in the straight payments in the end years of payment.

I don't work in the public sector just for the benefits, but I do try to maximize the benefits that are available. My agency receives many applicants for job openings, but many of the applicants are not great. I hope this program is an incentive for better qualified applicants to apply.

[Anonymous]

What type of government or service job do you hold?

[Anonymous]

I don't think you qualify for the Income based repayment plan. I make 140K and have 100K in loans and I don't qualify- even if I filed taxes married filing separately. I consolidated in 1999 at 7.5%! I am totoally getting screwed because you can't refinance/ reconcolidate- one more way the rich get richer and congress does not care... I have been paying $868 per month since 2000 and will until 2025! I am maxed out of the interest deduction so that is all after tax income repaying the loan. I am married, we own a home- paid $535K VA loan so 0% down- refinanced at 3% last year. I work for the feds and the taxpayers are making out on me because I am paying back so much ininterest post tax!

[Anonymous]

Anonymous wrote:What type of government or service job do you hold?

Government attorneys

[Anonymous]

Anonymous wrote:150k student loan debt, 75k salary, 2k cc debt, just bought a house for 250k, and mortgage cheaper than my rent was (live in DC). I never thought I would own a home too, I just kept paying down the cc debt to raise credit score. So happy now.

What did you buy for $250?

[Anonymous]

Anonymous wrote:I don't think you qualify for the Income based repayment plan. I make 140K and have 100K in loans and I don't qualify- even if I filed taxes married filing separately. I consolidated in 1999 at 7.5%! I am totoally getting screwed because you can't refinance/ reconcolidate- one more way the rich get richer and congress does not care... I have been paying $868 per month since 2000 and will until 2025! I am maxed out of the interest deduction so that is all after tax income repaying the loan. I am married, we own a home- paid $535K VA loan so 0% down- refinanced at 3% last year. I work for the feds and the taxpayers are making out on me because I am paying back so much ininterest post tax!

I ran your numbers, and you don't qualify. It helps if you have a spouse with loans as well, because the IBR counts your spouse's loans in the equation. Also, if you have children, then your available income is considered less.

[Anonymous]

OP, by posting here you show that you are not in denial about your debt which is a great thing. Make sure you crunch your numbers every paycheck or every month. It will keep you on top of your finances and help you to live a more frugal life style. Figure out how much the debt is going to cost you over time. It will keep a reality check on what you can truly afford. Can you live somewhere else besides DC? DC housing takes a big chunk of monthly income compared to other areas of the country. Your student debt is the size of a mortgage. My brother just graduated with the same amount of debt as you and his income will be about the same, he just lives in a lower cost area. Good luck and try to be as frugal as you can.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't think you qualify for the Income based repayment plan. I make 140K and have 100K in loans and I don't qualify- even if I filed taxes married filing separately. I consolidated in 1999 at 7.5%! I am totoally getting screwed because you can't refinance/ reconcolidate- one more way the rich get richer and congress does not care... I have been paying $868 per month since 2000 and will until 2025! I am maxed out of the interest deduction so that is all after tax income repaying the loan. I am married, we own a home- paid $535K VA loan so 0% down- refinanced at 3% last year. I work for the feds and the taxpayers are making out on me because I am paying back so much ininterest post tax!

I ran your numbers, and you don't qualify. It helps if you have a spouse with loans as well, because the IBR counts your spouse's loans in the equation. Also, if you have children, then your available income is considered less.

Income based repayment caps your federal student loan payment at 15% of your income so regardless of how much you make you may still benefit based on that limit.

[Anonymous]

Anonymous wrote:200k in student loans. 135 salary. DC metro. Will I ever be able to afford a home?

Find a rich partner who owns a house and marry him/her. You got him/her and have the house too. Maybe make him/her to pay off your student loans as well.

[Anonymous]

I think there are two IBR programs. One for public service, where you are forgiven after 10 years, and one for anyone who has federal loans, where you are not forgiven until you have paid for 25 years. That may be contributing to some of the confusion. We looked into the latter since we don't work for the government, and it doesn't help us because we have private loans too (and IBR does not take your private loan obligations into account when setting the limit for how much you can be expected to pay), but for someone who has only/mostly federal loans and a low to moderate income, it could really be a lifesaver. But I think the PP is in the public service IBR program.