Tuesday, August 26, 2008

Key Issue: Student Loans

In addition to the other expenses associated with city living, I, like many, deal with student loans. I'm in the process of consolidating my loans which consist of:
  • undergraduate consolidated loan. Approximately 13K 
  • graduate Stafford loans (unsubsidized and subsidized): 39K
  • Graduate PLUS loans: Approximately 8K
Not too bad given that I went to two private schools. I'm happy with that total especially since I landed a job in my field prior to graduation with my MSc. I think I made the right choices with respect to working while in school, living at home to save money on rent and food and other items. 

I was tossing up whether or not to consolidate and finally decided the convenience of one payment a month where I could pay over the minimum far outweighed making over the minimum on three separate loan accounts just to pay down principle. While there is the risk of paying more over time in a consolidation loan, I think I will be able to pay it off in far less time, mitigating some of that extra interest. I want to pay it off sooner rather than later because when I eventually move from Manhattan, I want to buy a house. I don't want to have these loans hanging over my head for the next 30 years and I'm willing to make sacrifices to make that happen.

I need to find out what my student loan payments are going to be (consolidated) so I can make a more accurate budget with respect to loan repayments, credit card payments, etc. 

2 comments:

DINKS said...

Oh yeah, i'd totally go with consolidating if i were you too :) i'm a HUGE fan of having everything in one place, which is probably why i have 13+ accounts with USAA alone! haha...

I've heard of some pretty cool programs out there (none i can name right now) but if i hear of any i'll let you know. My wife just started Grad school yesterday, so i'm sure i'll be posting about something throughout the journey.

(oh, and i answered your question on my most recent net worth page if you wanna check it out :) )

Living in NYC said...

LMAO, my original semi-consolidation plan went "'splodey". I knew HSBC was going to hold my grad school Staffords and when I returned to NY following another stint abroad I opened a checking account at HSBC to have money and loans in one place. Well I hate their online loan interface and I've closed the account. Most of my banking is still with Citi, I do have a Chase account for convenience and the awesomeness that is ATMs at Duane Reade.

I ended up doing the consolidation via Direct Loans because almost none of the consumer banks are doing consolidations anymore due to the state of the mess, I mean, economy.

Good luck to your wife - I should have blogged through grad school on PF issues but I honestly probably would have abandoned that as I did my main blog for the lack of time.

Thanks for stopping by!