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What should I do?

September 3rd, 2022 at 10:55 am

I'm confused about which student loan to tackle. 

student loan 3 has a balance of $7700 with no interest. Student loan 4 has a balance of $27,600 with interest. 


I don't think I'm eligible for the loan forgiveness and I'm not upset about it. However, my dilemma is whether should I pay the loan that has no interest or the one with an interest balance in hopes that I do get forgiveness. 


Another part of me is telling me to knock this $7700 balance out quickly 

10 Responses to “What should I do? ”

  1. Butterscotch Says:

    It should be pretty clear if you qualify or not. It’s income based.

  2. Lots of Ideas Says:

    Amber, is the $27,000 loan accruing interest during the pause?
    If so, I would start to pay it starting as soon as you can.

    If neither is accruing interest, my advice remains to put the money aside to see whether you are eligible for forgiveness.

    Once you know, do the math to see what the interest will cost you if you make minimum payments on the β€˜big loan’ while paying off β€˜the small loan.’

    If you want to start paying now, I would still do the math exercise to see if lowering the big balance before payment must restart is worth the delayed gratification of waiting longer to only have one loan.

    I know you want fewer loans, but you want every dollar to be used smartly too.

    I would definitely pay everything I could to the interest bearing loan, but my β€˜delayed gratification’ muscle is strongl

  3. latestart Says:

    I am a big believer in doing what allows you to sleep. If you think you might be eligible for forgiveness but the funds in an account and apply for forgiveness. If you find out you are not eligble for forgiveness then take the funds and pay the loans.

  4. Amber Says:

    @Butterscotch there are a few criteria that determines eligibility, income is one of them; however, so is the type of loan, ad the DOE is to provide clarification if graduate loans are to be included.
    The lender site doesn't provide such info, and the FAFSA site has been a bit of a challenge to get on. Fingers crossed though.

    Thanks everyone for your thoughts, I've decided to knock down the $27,000 loan. If I get the $10k, at least I would have knocked down the interest and can continue to make payments towards the principal

  5. terri77 Says:

    I would pay on the loan accumulating interest.

  6. Lots of Ideas Says:

    Amber, thus article makes it sound like not only are graduate school loans part of the program, but if you had a Pell grant as an undergraduate, you will get $20,000 of forgiveness on graduate school loans. The article seems well sourced.

    I agree with your decision to work on the interest bearing loan first.

  7. CB in the City Says:

    Best of luck to you, Amber. I'm rooting for you!

  8. LivingAlmostLarge Says:

    Leave in bank account, see if you qualify and then if not pay it off

  9. LuckyRobin Says:

    I don't know that I would ever rely on the government to do what it says it is going to do. Seems more like they are trying to grab votes before the mid-terms to me, but I am a cynical, cynical person when it comes to the government. It sounds like you have already made your decision, but you started this with doing a snowball that turned into an avalanche. If you jump to the larger loan, you'll have a little snowball to come back to at the end, but that might be easier than having a looming one at the end. Whatever you do, trust your own gut.

    What will you do if you get to the point where you are at the amount left where the government is supposed to give relief (assuming they win the mid-terms and aren't blocked on this) and they haven't yet? What if it is still a year or two away? Perhaps timed a month or two before the 2024 election? Are you going to stop paying it back until it is? Or are you going to continue and knock out as much as you can on your own?

  10. Amber Says:

    @Lots of Ideas thank you for sharing the article, this was great.

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