I am finishing up my Masters in Public Relations with a specialization in online PR. Currently I am making about $42K a year but also supplement my income with consulting. I owe $98,000 total in student loans (!!!) at roughly 6% interest and I will have to start paying off these loans in November of 2009.
My income will increase during that year with consulting and with a publishing deal I have in the works. But for now, my question is, do I and how much should I pay off monthly so that I won’t have to 1) break my back having to pay my monthly payment come November and 2) take 10-15 years to pay off the loan. I am 28 right now. I want to be able to buy a house in 10 years, not still be worried about paying my crazy loans.
I own my car and will have no other debt by the end of this year.
Please help, business gurus!
Also, I have no kids and moved back home to cut all costs. So in a few months all of my income is fully at the mercy of my student loans.
I don’t have any other expenses, which is a good thing right? And within two years I am expecting to make about $60k because of the book and my consultation practice, so I guess then I would step up my monthly payments.
August 1st, 2009 at 12:48 am
That is insane for a masters degree in PR! Unless you really have a great publishing opportunity, I fear this will be painful. Your monthly payment will be about $700/mo, a huge chunk of your salary. If you can live cheaply and make an extra principle payment every month (another couple of hundred) it will still take about 10 years to pay off.
It’s going to be hard to borrow that much now which is a good thing for kids!
August 3rd, 2009 at 1:13 am
You went to college and have a masters degree, make 40+ a year, and have no other debt, and live with mom and dad’s.
Why don’t you pay 20,000.00 for 5 years, That’s 100,000.00 in 5 years be debt free. That would better when you apply for a home loan. then take the next 5 years for the next 100,000.00, and put that down on your house loan.
That’s 22,000.00 a year (plus future raises) while living at Mommy and Daddy’s house.
If you can’t live on that…wow !!