I am a nurse with $ 106,000 in student debt. How can I get out of debt faster?
Question: I have a graduate degree in nursing and a stable job, but I still have $ 106,000 in student loan debt. In the past 18 months, when all student loan payments were suspended, I was able to send my 3 year old daughter to high quality child care using the money I would have spent on student loan repayments. . I also had a second child, who is now three months old. We were able to expand our family because we could afford hospital and child care costs for two children without my student loan payments. When the break ends on January 31, 2022, I’m afraid of how I’m going to handle work and pay for child care. We have no other debt and we never go on vacation. My husband and I both work in the medical field. I work for a private company because they offer more flexible hours so that I can be with my children at night and on weekends. For every dollar I earn [it feels like] I owe the federal government a dollar. I’m lucky that I don’t have to worry about food. But I am worried about my children. (Need help getting rid of a student loan or other debt? Write firstname.lastname@example.org.)
Reply: About 6% of all Americans who borrowed money for school now have six figures of debt, according to Brookings; many are undoubtedly struggling just like you, especially when you add in the costs to become a parent. But is the right option to seek loan forgiveness, a more favorable repayment plan, refinancing – some student loan refinancing rates now start at less than 2% – or something else? Here’s what the pros told us.
In your case, this might be the perfect time to look for a new job at a nonprofit organization with a higher salary, says Mark Kantrowitz, author of several books, including Who graduated from college? Who doesn’t?. “Nurses are in demand these days, so you might get a bonus or a higher salary by changing jobs,” says Kantrowitz. This is because even if you like your current working hours, you might be able to negotiate similar hours for better pay at a nonprofit medical center due to an increasingly severe shortage of healthcare professionals. health across the country. Another benefit of working in a non-profit organization is that you can qualify for the Public Service Loan Remission (PSLF), which forgoes direct loans after making about 10 years of payments. And there are other ways nurses can get their loans canceled, which are detailed here.
You should also, if you haven’t already, consider an income-based repayment plan, recommends Anna Helhoski, the student loans expert at NerdWallet. “Either you need to increase your income or use an income-based repayment plan,” Kantrowitz adds. These types of reimbursements are designed to be “an amount that is affordable based on your income and the size of your family,” notes the government; you can read more about it here.
Helhoski adds that you may want to consider consolidating your loans with a private company to get a lower interest rate than you are currently paying. Earnest, for example, offers rates starting at 1.88%, and SoFi now offers rates starting at 1.74% and a bonus of up to $ 1,000 if you refinance with them.
That said, read the fine print of each private lender and note that refinancing federal loans with a private lender comes with risks, including depriving you of benefits such as loan cancellation and repayment options. more generous. And only the most qualified borrowers get the best rates (Here’s our guide to getting the best rate possible.)
* The questions are edited for clarity and conciseness.