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Student Loan Debt $100K + Looking for overall advice
May 26, 2015
2:22 pm
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Rob
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Hello,

I just graduated in May with my Masters in Accounting. I am coming out of school with right around $104,000 in debt. I was wondering what refinancing/ consolidation plan you think is best for me. Here is more info.

I plan on living home for a few years and want to aggressively pay off these loans.
I start working with a public accounting firm full-time in August and my starting salary is 56K

I have around $31K in Federal Student Loan debt between subsidized and unsubsidized loans.
I have around $73K in private student loans through Navient.

My main goal is to refinance my private student loans as the interest rates are horrendous, listed below are the 4 private loans I currently have…

Freshman year: Principal 24,000 Interest 10.96% Current Balance $31,929
Sophomore year: Principal 12,000 Interest 8.5% Current Balance $14,544
Junior Year: Principal 12,000 Interest 7.5% Current Balance $13,804
Senior Year: Principal 12,000 Interest 8.5% Current Balance $12,911

Obviously I have dug myself quite the whole. I financed pretty much all my college education through loans besides any grants/scholarships I received. I know there is no real easy way out of it but any advice will help.

May 26, 2015
7:08 pm
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Indiana
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Forum Posts: 334
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May 3, 2014
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Rob,

I’m happy to hear that you plan to aggressively attack your loans. As an accountant you no doubt realize the advantage of knocking out these loans ASAP. Given that this debt won’t disappear in one night, I’d suggest paying the minimum on everything except one loan. Attack that one loan with everything you have. People normally pay off the highest interest loan, but sometimes they choose a lower balance loan to get a win earlier in the process. Choose whatever works best for you.

The principal balance on your debt is obviously quite large, but the interest rates seem quite high and will really get in the way of paying off your debt. If you could get lower interest rates, you would be doing yourself a huge favor. Unfortunately, your debt relative to your income makes consolidation a difficult option.

Because most of your loans are through Navient, you may want to try to get signed up for their Rate Reduction Program. Doing so could get your interest rates dropped to 3% on all the Navient loans. That being said, it is a program that they only offer for people who are really struggling with their debt. You might fall in no man’s land where you are not struggling enough to get the reduced interest, but not making enough to refinance on the private sector. If your Navient loans are in repayment, but you have not yet started your job, you might be able to get on the Rate Reduction Program. More info on it is available here: https://studentloansherpa.com/interest-rate-navient/

As you deal with your debt be careful to make sure that monthly interest never is greater than your monthly payments. You want to keep everything trending in the right direction. This debt won’t disappear overnight, but if you are persistent, you can knock it out.

If you have any questions or updates on how things are going please let us know!

June 1, 2015
9:26 am
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Rob
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Thank you very much for your response. I am going to apply for the rate reduction program and go from there. I like the idea of paying the minimum on all and attacking one of the,. The plan is to attack my freshman loan first, as it has the biggest principal with the highest interest rate. I will keep you all updated with my Rate Reduction Program application.

Thanks again.

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