It's Payback Time
Do you have a student loan repayment strategy?
Federal student loans are a common way to finance graduate school in the United States. Yet, the repayment mechanisms for federal loans are subject to Washington politics. Student loans are now—and have been—a dynamic political battleground. Rules change. They establish new programs. Then dissolve them. Add in the pandemic and the confusing changes to student loans that accompanied it.
It's dizzying.
For years I made student loan payments without a strategy. I viewed student loans like a car loan or a mortgage: something that I needed to plug away at until it was gone. And the sooner I repaid it, the better.
Turns out, that wasn’t true.
As someone on the academic track, I am eligible for Public Student Loan Forgiveness (PSLF).
Congress created the Public Service Loan Forgiveness program in 2007 to encourage people to work in public service. If federal student loan borrowers make payments on their loans for 10 years while working in public service and meeting other requirements, Education forgives the remaining balance on their loans.
Work for universities falls under the umbrella of "Public Service". My years employed by universities as a postdoc and a professor counted. Now that I've made 10 years of payments, the loan balance is set for PSLF.
I had been in repayment for six years before I realized this. The PSLF game is very different than a mortgage or an auto loan. For PSLF, the goal is to pay as little as possible. This has the effect of “pushing” money forward toward forgiveness. To achieve this, there are strategies to help cut your monthly repayment cost. The strategy is not to pay as much as possible each month toward the loan.
Having a plan of attack is key for both PSLF and other loan repayment plans. Yet, the federal loan landscape is so dynamic that it's impossible to plan.
I found Student Loan Planner while searching for formulas used to calculate repayment amounts. At first, I subscribed to their free newsletter. The newsletter is very useful and became one I looked forward to reading each week. They are on top of the dynamic student loan landscape. They discuss what's happening in Washington. They explain how new laws will affect different repayment strategies. Below is a snippet of the most recent edition (March 2024).
After two years I booked a consult for a custom plan. I wish I had done it years earlier!
Here's how it works: You book a consultation and upload your student loan information. You meet with an advisor. SLP develops a plan specific to you. You follow the plan with periodic check-ins and follow-ups.
A $300 consult saved my family tens of thousands of dollars in loan repayment savings. I've referred many friends and they have similar stories (see below).
They also have a new service, SLP Wealth, that offers financial planning services. I am also a SLP Wealth customer. They occupy a unique niche for financial planners. Many financial planners won't deal with people who have student loans. Or, you need a minimum amount of investable assets before they’ll work with you. An amount that is beyond the scope of most early career professionals.
None of that with SLP Wealth.
Check out SLP and SLP Wealth. If you decide to book a consultation, use this link. They are running an offer where you get $200 off a Student Loan consult and SLP Wealth financial planning for $99 per month. The link gives you direct access to that discount, and I earn a small referral commission as an existing customer.
It's never too early for early career professionals to begin thinking about the foundation of their financial future.
You told me about this! Adding mental note (again). I am planning on getting a masters in something that qualifies me for PSLF.