OT: Student Loans

[TheStateUofMS]

I have a student loan that year to date I have paid more in interest than in principle with what should be an illegal interest rate. My question is have any of you had this problem and taken a personal loan from somewhere, paid the sucker off, and then just paid off the personal loan with a low interest rate?<div>
</div><div>This is absurd that a federal student loan can charge this much interest.</div>

 

[TheStateUofMS]

I have a student loan that year to date I have paid more in interest than in principle with what should be an illegal interest rate. My question is have any of you had this problem and taken a personal loan from somewhere, paid the sucker off, and then just paid off the personal loan with a low interest rate?<div>
</div><div>This is absurd that a federal student loan can charge this much interest.</div>

 

[TheStateUofMS]

I have a student loan that year to date I have paid more in interest than in principle with what should be an illegal interest rate. My question is have any of you had this problem and taken a personal loan from somewhere, paid the sucker off, and then just paid off the personal loan with a low interest rate?<div>
</div><div>This is absurd that a federal student loan can charge this much interest.</div>

 

[Sutterkane]

If you didn't like the terms of the loan you shouldn't have agreed to them.

If you think you're paying a ridiculous amount of money for the debt then absolutely you should refinance elsewhere if you can get a much better rate. Understand that you will not be able to deduct the interest from your taxes as you can currently with the student loan.

 

[mstatefan88]

My wife and I are about to go through the same thing. Between what I have from MSU when I graduated with my undergradin 2010,my Masters degree I'm getting now, and what my wife will have when she's done with vet school, we will have about $200K in loans between the two of us.

We've discussed it in length together, and I'm not sure how much of this applies to you and what your marital or financial status is, but this is what we have come up with. We are going to get done with school and live off of my wife's salary while we bank every penny ofmine and pay off loans. After taxes my salary will beabout 35K a year. I will be teaching, so I'm going to work part time during the summers and put every bit of that towards loans.To supplement that, we will, and are currently,finding every little way possible to continue tochip away little bits at a time. Cut out all fast food, coupon, every little thing possible.

Honestly, it really blows. We rent right now, I work part time in Auburn and go to school part time for my Masters, she goes to school full time and works once a week. We live off of about 35K dollars in loans and part time salary a year right now, and when we both get done with school, even though we will make a combined salary of about 90-100K, we are going to try and live like we make 45-50K. That interest will eat you up and yes, interest rates are a ***** to deal with. The only way to get at them is to cut way back because it will dig you a hole you can't get out of. My advice is cutting out the little things first. It's makes a huge difference. Maybe pick up something part time once a weekend if you can. I was amazed at what we could cut back on.

Sorry this was long winded and it may not help or work for you, but I hope it does. It works for us and we are going forward with a plan we think we can implement. It's a lot of math and a lot of guesswork the further out you try and plan things, but you have to start somewhere. That's really the first step is putting some tangible numbersdown that you can work around and plan for. Bills, other expenses, kids, income, food, gasanything like that. Try and account for all variables. Then just go from there are see where you can cut so you can start taking chunks out of the loan and the interest accrued. I really hope this helps because I'm with you, loans and interest rates suck.

 

[SwampDawg]

sacrifice to pay it off. Considering the mind set of so many people you are remarkable. My son and his wife are in the same position. He has almost paid off his, but she has a long way to go. Hang in there.

 

[goindhoo]

In order to refinance, the bank is probably gonna want collateral.

 

[dgsmith15]

year to date I have paid more in interest than in principle

That's what daily compounding interest gets you. It sucks man, but you're not alone. There are millions of people in the same situation as you (including me). In addition to the advice mstatefan88 gave, I would suggest paying a lot more than your minimum payment each month (if you can afford it), or making extra payments throughout the year.

 

[EAVdog]

I'm not halfway through my debt but I've already paid them more than I borrowed. It sucks but it is what it is. Thankfully my wife and I have finally gotten a decent household income and the payments don't hurt as bad as they used to. And thankfully I had the foresight to go somewhere affordable like State and not take out every loan I could have gotten.
I had a coworker in DC that had graduated from Catholic U. with a Masters in Architecture. Which pays not one penny more than a Bachelor's when your'e an Intern. The guy had over 200k in student loans. With the salary he will make as an Architect in DC, and the cost of living there is a very good chance that he will retire before he can pay them off.

 

[DerHntr]

Live off of your salary and pay it off with hers. You said you currently live off of around 35 and that you will make thirty five soon. It will go by much faster this way. My wife and I did this. We budgeted like mad people and paid off just shy of 60k in 18 months. We had a budget line item for damn near everything. You will also find out that most cities, small or large, have a lot of things to do that are free and actually fun or at least interesting. People who have nothing to do in their towns probably haven't looked or consider local stuff not good enough.

The only thing that might be harder for you to reduce than us is food costs. We ate primarily what I could kill or grow. Our grocery budget in that time frame was literally $110 a month. We rarely went over.

 

[STATELAW]

Apply for Income-Based-repayment, and make the payments for 10 years. The balance of your loan will be forgiven.<div>
</div><div>http://www.ibrinfo.org/what.vp.html#pslf
</div>

 

[Seinfeld]

any time that you're financing it over 10-15 years. If you think your amortization schedule looks bad now, wait til you buy your first house. It will make you cry while wondering why you're not in the money lending business at the same time.

Ok... so with that said, there are options out there but my guess is that most of them are unfortunately not going to apply to you(it sounds like you're not too far removed from graduating).

1. If you own a home, look into a HELOC. Without knowing the terms of your student loan, this option may not be any better but the interest is still tax deductible.
2. If you're working and have a 401K, look into a loan from it. The interest isn't tax deductible, but you're basically taking out a loan from yourself. All principle and interest is paid back to your 401K.
3. Start calling around to banks or investment institutes for student loan refinance options, and here's the thing... Don't focus on the interest rate. Try to find one that will allow you to refinance to the shortest loan period that you can afford. It will hurt for a few years, but your total interest paid will shrink significantly and you'll have it paid off more quickly.
4. If all else fails, figure out what you can afford to pay each month and just start paying more towards the principle every month than the loan requires. At least this will allow you to pay the loan off sooner and avoid some of that back end interest.

As someone else mentioned, make certain that you consider tax deduction benefits no matter which way you go. A loan with better interest rates and terms could easily end up being actually worse if you lose your ability to deduct the interest.

 

[mstatefan88]

We will be 26 when we get done with school, both of us will have careers,so we want to get pretty stable and settle down and have kids. If it weren't for vet school we would have had kids when we got married at 22, but we decided it would be more responsible to wait until she was done. But we wanted to have everything we need come from her salary so we can find ourselves a long term situation, then if we have any left over from her, it goes straight to knock out loans. We knew it might add anotheryear or year and a halfto paying off, but we felt it was a worthwhile trade off to get into a nicer, more long-termhome and not be struggling over trying to provide for kids.

That grocery bill is insane though. That's probably one of the more impressive things I've heard. That takes dedication for sure.I don't hunt as much as I used to, so I probably couldn't do quite what you do. The growing isn't a problem because we do a ton of that, but the hunting would be a bit tougher. Our grocery bill iscurrently around$220-250 a month, which for as much as we cook probably isn't that bad. But you are right about the free stuff. My home town has a little built-in ampitheater where they show free movies, they have fun activities for adults and kids, and I'm hoping wherever we move will have the same.

 

[boomboommsu]

"4. If all else fails, figure out what you can afford to pay each month and just start paying more towards the principle every month than the loan requires. At least this will allow you to pay the loan off sooner and avoid some of that back end interest.
"

CLEAR THIS WITH YOUR LENDER! Get it in writing, and record them on the phone, if you can do so. Many lenders, especially the private student loan ones and the 'servicers', will just credit your account, not actually applying the extra payment towards your principle, so that it doesn't reduce your interest owed. If your next month's statement shows a credit or a lesser amount owed, this is what happened.

If you have multiple loans, they will do everything they can to apply the payment towards the loan with the lower rate, to maximize their profit. Really, anticipate that they are going to screw you, so have your proof lined up. write separate checks, and put in the notes section of the check the ID# of the loan it is to be applied to.

ETA: Every lender/servicer will have a special mailing address to mail checks/requests that are...different. "Special processing" or something. Call and find out what it is, then mail the check with the extra amount to there, with a note clearly identifying the loan it is be applied to, with a note that if they don't like those terms, don't cash it. They may still try to screw you, at which point hours of phone harrassment may clear it up, or may not.

If you have multiple loans with varying rates, consolodation will help prevent your lender/servicer from applying extra payments to the loan with the lowest rate. they fairly average the loans according to their respective rates, but the catch is they round up the result to the nearest 1/8, or maybe even 1/4. Do the math and figure how much they would round up, and decide if it's worth it. if your servicer is screwing you on which loan added payments are applied to, it's probably still worth it regardless. if your servicer is doing it's job, then not unless the roundup is zero or near to it.

A variable rate is probably not a good idea. Rates are bottomed out, lock in the lowest you can. I've managed to get mine all the way down to 1.375%. At that rate, it's less than inflation, and not even worth paying down. But to get that, i got a 10-yr repayment, automatic deduction, and rate credit for on-time payments, etc.

DON'T sacrifice your credit score to pay down your loans. This will only hurt the rate you can get them refinanced to.

here's the best site for private student loan consolodation/refi: NOTE: this isusually NOT best if you have government loans. if you have any loan that's a govt loan, there arebetter consolodation options.
http://www.finaid.org/loans/privateconsolidation.phtml

 

[boomboommsu]

with good credit, standard is between 6-7% right now. if you're much higher than that, improving your credit or adding a co-signer may help you get the rate way down. keep in mind that any lowering of your rate only lessens the profit of the lender. they may work with you, but your best option may be to refinance. you won't need collateral for a student loan consolodation/refi, but you will for a personal loan.

ETA: while co-signing is usually a really baddeal for the co-signer, the growing trend is offering a 12-month release option, meaning the co-signer is released after 12 months of on-time payments of principle and interest. that may alleve the fears of a potential co-signer for you.

 

[Shmuley]

in a form that you and your wife refer to on a frequent basis. You will need to re-read your plan on those occasions when you and she are tempted to take the trip to new orleans or the beach. Or when she's tempted to keep up with the Joneses with the new living room suite. [/I'm refraining from referring to 4 wheelers, hunting club dues, Berettas, Pings, etc.] Y'all will have to keep each other accountable about focusing on the goal. If y'all can quickly get out of and then stay out of debt, it would be an amazing gift to each other.

 

[Seinfeld]

A few years back, I paid mine down to the point where my "Payment Due" was $0 on my monthly bills. Regardless, I went ahead and continued to pay my same monthly payment amount, assuming that it would all be going towards the principle since I was paying ahead. Well, like an idiot, I waited nearly a year before verifying that my outstanding principle was dropping by the correct amount and sure enough, they were applying my early payments to interest as well. It was my own fault for not covering my bases, but your advice is 100% correct.

 

[davatron]

Sometimes it is structured so that you pay heavily in interest the first few years and then pay mainly towards principal after that.

 

[TheStateUofMS]

I have 4 of them totalling 16,900....Started at 17,400. My loan interest rates are 5.8%, 6.5%, 5.8%, and 6.0%....so far ytd I have paid in about $1,050 with only about $450ish paying off actual principle. The minimum payment is $200/month which is what I have been doing since January. I make pretty good money and certainly could pay more towards the loan than I do, but I still think those interest rates are too high. I'm fully aware of the interest rate deductions, but I would much rather see this principle paid off quicker.

The loan details that is shows if you follow the minimum payments is excrutiating and it shows paying double what the starting balance is.

I'm not stupid I know I can pay more than the minimum every month and get it paid off quicker, I would just rather get lower interest rate and then start paying off more. Does that sound like a bad idea?

 

[Eureka Dog]

and I mean brutally. (Many DINK couples fail to objectively analyze their budget once the family starts expanding.)

This means that one of you MAY have to quit work andstay at home with the childrenIN ORDER TO SAVE MONEY. What? Yep. On average (and your situation my be better or worse), a family with childrenandboth parents working usually banks only 10% more moneyat theend of the month than they would if the parent with the lower income stopped working.Do the math for your situation.

I speak from experience...

Daycare, pre-K, baby sitters, arranging for transportation for the children when you MUST be at work....
More auto expenses... more cars bought, maintained, fueled, etc.
Additional work-related expenses... more business clothes and accessories, eating out more often due to lack of time, more make-up for the ladies, etc.
Extra MD bills since some other parents don't mind their kids sharing their kids' illnesses with the other kids at daycare
In some cases, lost income due totaking time off to care for a sick child, going on field trips, etc.
Etc., etc., etc.

Obviously, couples with lower incomes are affected much more than couples with higher incomes, but still, do the math for your situation.

 

[o_LandDawg]

Thats on a 10 yr repayment schedule and those rates arent too high for a fixed rate student loan.<div>
</div><div>Suggestion: My rates were approximately the same. My lender (Mohela) allowed me to set up a bank draft that reduced my rate on all 6 loans by 2%. My rates went from 6% down to 4%. they are not going to volunteer this info but I would definitely ask.</div>

 

[patdog]

Especially if you take into account the tax benefit of the student loan interest. Even in the 15% bracket, that lowers your effective rates to 4.9% to 5.5%. Your best hope would probably to find a teaser 6-month credit card rate and then just keep jumping to a new card with a new teaser rate every 6 months. But that's pretty dangerous because most people will wind up using the cards and never getting anywhere. My advice:

1. Make the most extra payments you can afford on all debt except your mortgage (if you have a house). I like the idea of the guy who has $200K in student loan debt to use one spouse's entire paycheck for nothing but debt payment (I hate the idea of ever getting that far in debt though).
2. Pay off the highest interest rate first and work your way down.
3. Don't incur any more debt than you have to. If you have to have a new car, get a used one and pay it off within 3 years. If you have non-mortgage debt and your car still runs, keep it. If you don't have any non-mortgage debt and want a new car, geta new onebut pay it off within 3-4 years.
4. If you can, try to live with your parents for 6 months to a year with the agreement that you will use $1,000 per month as extra principal payments on your debt (above the other extra payments you make) or toward saving to buy a house.
5. Don't buy the most expensive house you qualify for. Plan to stay there for at least 10 years (and don't buy the most expensive one you qualify for then). Get a 30-year fixed rate mortgage and plan to refinance to a 15-year mortgage in 5 years (or just start making extra principal payments on your existing mortgage if the rates go up).

Remember, the best defense against tough financial times is to keep as little debt as possible. I see way too many people (and businesses) load up on debt and then have real problems when the economy takes a downturn. And no matter how good the good times are, there will always be a downturn coming, so be ready for it.

 

[mstatefan88]

I will get weekends, nights, summers, vacations, all of that good stuff off while we have kids at young ages. Set schedule with relatively little fluctuation. Not to mention healthcare benefits and a few other added perks. Plus we are doing everything we can to stay in the Birmingham area. We have tons of family here, and they have already expressed interest in babysitting kids for free. That would be a huge help.

We've already tried to incorporate kids into the money equation which is why we decided to live off of my wife's salary anduse mine to pay off loansinstead of the other way around. It's probably impossible to overestimate how much kids will cost, but me holding off on career advancement for 7 to 8 years so I can keep good hours for kidsis something my wife and I discussed and are happy with medoing. That should help cut some of thoseextra costs back while continuing to take big chunks out of our loans.

The kids are really the daunting task to figure out money-wise. You don't really know what you are getting in to until you have them and you physically see how much they actually cost.

 

[dgsmith15]

Your best hope would probably to find a teaser 6-month credit card rate and then just keep jumping to a new card with a new teaser rate every 6 months.

I can't see how that would do anything but hurt your credit rating.

 

[patdog]

If you did go with a strategy like that, be sure to close the account for the old card and be sure the account is shown as closed on your credit reports (all 3 bureaus). Which isn't nearly as easy to get done as you would think it is. The truth is, his interest rates aren't that bad. If he's paying more interest than principal at those rates, his problem is that he's not making nearly enough in principal payments, not that his interest rate is too high.

 

[Johnson85]

This means that one of you MAY have to quit work andstay at home with the childrenIN ORDER TO SAVE MONEY. What? Yep. On average (and your situation my be better or worse), a family with childrenandboth parents working usually banks only 10% more moneyat theend of the month than they would if the parent with the lower income stopped working.Do the math for your situation.

Agree with the gist of your statement, but you also need to take into account for future lost wages from dropping out of the work force for a few years. If the person quitting work doesn't have much of a chance or intention of advancement, staying it home is a lot more likely to make sense financially. If you're talking about somebody with a decent career track dropping out of the work force for a few years, they aren't going to be able to recover in most fields. A lot more to the decision than finances, but if you are weighing the decision (and not just trying to make sure you can afford it after you've made the decision), you need to consider the effect on long term earnings, not just the lost earnings while the spouse is at home .

 

[TnDawg76]

At 6%, interest isn't the part that is killing you, it's the 10 year loan repayment schedule that they provide that will nickel and dime you to death. If you were to get the rate dropped by 2%, you're only saving about $340 a year, and the likelihood of getting an uncollateralized loan for under 4% is not good. My advice treat it like a car loan and set a goal to pay it off in 4 years.

Google 'excel amortization schedules' and set one up for each loan. I agree that you should concentrate on the highest interest rate loan, unless you have some loans that have small balances that you can knock out easily. Also, don't let somebody tell you not to pay off a student loan early because you can deduct the student loan interest on your tax return. Yes, you can, but you are still losing .75 - .80 cents on the dollar for every dollar in interest you are paying during the year.

 

[Robot-Chicken]

There are lots of cost in that. And I know you think you have thought of them. But, I hate to point this out, what if the kid has health problems? We have some friends that have just gone through this. Major medical cost that you didn't anticipate will blow your repayment plan out of the water. Also, what if you have twins? What if the kid is only able to have a special diet? Lots of things to consider.

We didnt' have our first until I was 31 even though we wanted to sooner. We just accepted the fact that we were not financially ready.And as someone pointed out, now my wife stays home.We can't afford for her to work.

I'm obviously not telling you what to do, just pointing out some things most might not want to consider.

 

[RobbieRandolph]

Yeah that's a total ripoff, brah. They should be paying YOU to borrow money.

 

[EAVdog]

AndI have all my loans consolidated with Sallie Mae.

I had one company who turned me in for non-payment. They'd immediately start the clock on my payback every semester. Even though they were not supposed to and I'd have to remind them every semester. But I never was notified until after 90 days. I ended up having to call the Student Loan clearing house on them. When I mentioned the name of the company I wanted to report the operator laughed and said, "yep, I knowwhat you're about to tell me".

Crooks, all of them are crooks.It's only going to get worse now that it'll be a political football.

 

[vetdawg]

I've been reading through this topic, and I've seen some good advice and some bad advice.

My wife and I recently finished paying off my student loans, which totaled about $110,000. We paid them off in about 2.5 years with a household income of $70-80k.

This may be cuss word around here, but we did it by following the Dave Ramsey plan (which is nothing more than common sense....no special tricks, etc.)

We saved up a small emergency fund (~$2,000) and then listed all my individual loans smallest to largest. Then we did a budget for EVERYTHING. Anything left over after the budget was done went toward my student loan with the smallest principal. Once we had it paid off, we went to the next one. Each time you pay one off, you have more money to put towards the next one, so you pay them off faster and faster.

The more you sacrifice, the quicker you pay them off. The less you eat out/ the fewer movies you see/ the fewer trips you take, the quicker. Simple as that. Don't worry about interest rates....just pay off the smallest balance first, then the next smallest, etc. until you are done.

Do not get credit cards to pay them off. That is a disaster waiting to happen.

 

[JPMReb]

Based on the information you provided, here are some thoughts. It's free advice, yadda...yadda...:

1. Paying off a student loan via a private loan is generally a terrible idea. 1st, you're not likely to find a better rate. 2nd, there are a lot of benefits (i.e. - deferment, forbearance, IBR, various repayment plans, interest rate reductions, etc.) that come with a FFEL loan that you will give up going this route. 3rd, the risk trade off is generally horrible.Even if you default on a FFEL loan you can rehab it and get it back in good standing. Yes, trading the above benefits for a HELOC/Credit Card and risk losing your home or being hounded bycollection departmentssounds like a grand idea.

2. The IBR program mentioned previously might be an option. But you have to qualify for it based on your income and you are likely above the threshold. Won't hurt to call and check anyway. Also, you can contact the DOE and possibly consolidate into one FFEl loan with a fixed rate and only have to make one payment. You may give up some interest rate reductions (i.e. - ACH, on-time payments, etc.) that you currently have.

3. Your problem isn't the interest rate. Your problem is your willingness to attack the debt quickly and be done with it. 16k is a relatively low balance. I believe the average balance per student is ~ 25k. Here's a comparison: I combined your loans for easy calculations, the results should still make the point. 16.9k at 6.0% (~average) on a 10 year term results in $187.62/mo.; $5,615.17 in total interest; $22,515.17 total payback. Let's say you magically obtained a loan at 3% (not likley)on the same 10 year term. That creates a payment of $163.19/mo. (-$24.43); $2682.47 in total interest (-$2,932.70), $19,582.47 (-$2932.70) total payback.There's a little savings in total interestover 10 years, but not worth the risk of the benefits you would give up or potentially losing your home.

4. As others have suggested, you should get ona written budge quickly, make cuts across the board, and make payments of ~$900.00 a month for 18 months and be done with it. Forever.

I went with option 4 about 8 years ago with a balance of 15.5k. It tooks 16 months. Our household income at the time was less than 40k. It can be done. Good luck.

 

[weblow]

If there is any way possible to postpone having kids for a couple of years, do it. If it were me, knowing what I know now, I would make sure that I owned a home, had both settled into our careers and had things under control before having children.

Yes, you will have set hours but you will also pay childcare for the times you are at work. That is not cheap. Don't take this the wrong way but I would be shocked if after paying the money for your child, the child care, the food, the insurance, the med bills..........I would be shocked if it did not require the majority of the salary that you will be making.

It just sounds from what you have said that you feel you will be able to put almost all of your salary toward repaying loans when I think the majority is going to go toward the care of your child.

On top of that, is your wife receiving a free vet clinic? Is she starting her own clinic? That will be more loans. Is she joining an established group? Is there a buy in to join this group?

I would just want to make sure that things and work were settled before having children. I have two of them that I would not trade for the world but there is nothing cheap about raising kids. Also, that first year after having your child is nothing that can be explained. It is pure insanity, especially when you are trying to both work.

I know my wife was a teacher a was limited in the number of sick days. She never used them until we had kids and then she used them all the time to care for our baby that had gotten sick a daycare. Most parents will attempt to take their sick child to daycare so they don't have to use their own sick days.

I like you plan to pay off the loans and think that it is much more aggressive than what most would do in your situation. I am not trying to make an argument against having kids either. Just wanted to give you my opinion from someone who has been there and done that.

 

[boomboommsu]

those rates are on the low side for a student loan. sorry, but that's just how it is. they're not gonna give you something for free, but if they know you've got a better deal lined up with a competitor, then you can bargain them down.

with good credit, you can refi to prime + 1.5. prime is 3.25 right now, maybe it will go down to 3 on July 1 (when it counts for consolodation purposes), it certainly won't go up. so 4.75% on a VARIABLE rate loan is the best you can do, outside of your lender/servicer gifting you a better rate for some reason. IF you think you can pay the full amount off in a year or so, then you probably would save about 1.5% of ~17000, or about $250. on the risk of the VARIABLE rate jumping before it's paid off and costing you money. PLUS, consolodation comes with a 1% fee tacked on the loan, or $170 (with interest accumulating), so your actual savings would be about $72.

IMO, that little is not nearlyworse the hassle and risk. ask your lender about changing your payment schedule to a 10 year plan, and what rate they can give you. lower term means lower rate. mention that you would prefer consolodation if they can't lower your rate. drop the name of one of the main consolodators, know enough details to convince them you aren't BSing. consolodation means your consolodator pays off your loan, meaningyour current lendersfuture interest profit is zero. you would be banking on that they will lower your rate, at a cost to their profit, so that they can keep your business and some of the interest/profit. i know they sometimes do it, but based on what factors i couldn't tell you. seems to me very similar to bartering a cable company down.

if your four loans are with 4 lenders/servicers, then you may have to have this conversation 4 times.

read what i wrote before about them paying off the lowest rate loan first, to maximize their profit (at your expense). when they do this they are jacking your rate up 0.7%, and you dont' have to let them get away with it. talk to them about paying off the 6.5% loan first with any extra payments, and follow the hell up on that as they WILL screw you on it if you give them the slightest chance. once you have the conditions of extra payments settled, just pay as much as you can, THAT is how you will save money on it.

 

[DogStuckAtUM.sixpack]

nm

 

[EAVdog]

Don't wait too long. My wife and I waited until we thought we were ready and nearly didn't have kids. After2 years of trying and unsuccessfully spending what savings we had and 3 years of exploring the adoption route my wife out of the blue got pregnant. My son is a miracle for sure but now that he isalmost 2 years old I sure wish I had the energy and stamina I did 10 years ago. Plus I'll be in my late 50's when he graduates college (when I should be really focusing on saving for retirement). So balance is important, not too late not too early.

As for some sample costs, we live in Atlanta and like I said our son is almost 2 years old. last year we spent 14,600 on daycare, and we send him to a church based ordinary daycare nothing fancy. And we spend roughly 400$'s per month on clothes, food, misc. So the bulk of your salary alone after taxes will be going straight to the little one.

Going to only one working parent might not be a bad idea. If your Household taxable income goes over 120k the tax breaks for things like daycare costs and children's medical expenseses phase out. Which as you seecan really bite you in the rear. And if you use a Flexible Spending Account to pay daycare you can only divert 5,000 dollars per year pre-tax (which is pretty weak).

If all else fails just have your wife stay at home, declare head of household with your salary, then sit back and wait for all the gov't bennies to roll in. Sadly it's about the only way to afford kids these days. Or at least itseems tobe since there are so many folks on assistance with large tribes of offspring. My wife and I both have well paying jobs and struggle to afford the one child we have.

 

[HamilReb]

1. Federal student loan rates are set by the DOE. They're not negotiable, at all. Private loans may be but not Federal. You can ask about rate reductions such as ACH and on-time payments but the rate is the rate.

2. Federal student loan rates are not set by Prime. There based on the 91- day T-bill. New fixed rate loans taken out after 7/1 will be 6.8%. The rates don't change, regardless of the term.

3. There is no competition for consolidations. The DOE has taken the origination of all new loans back under the Federal government umbrella. You can't consolidate with just any lender anymore.

4. When consolidating with DOE there is no origination fee. Also, they take the weighted average of your balances/rates and round up to the nearte .0375.

And finally, "know enough details to convince them you aren't BSing". You've certainly attempted that, except that your details are completely false.

 

[WestCoastBulldog]

I didn't have student loans (fortunately). My wife paid her own tuition at UCLA and has paid that off (before we even met). I just wanted to offer my opinion on the kids front. I am 30, my wife is 33. We have a healthy 1 year old. No matter what anyone ever tells you, you will never totally be ready for kids... mentally, financially, etc. They are a tremendous responsibility that, if you are a good parent, you will find a way to make it work. We both work full-time. I'll give you the break down of my fixed expenses (mortgage/ day care) so you have an idea... I pay $2,225 a month on my house (this includes PMI, principal, interest, and insurance). Since we both work full-time we had to find a day care that took infants - these are not as popular as you would think and are super costly. We pay $1125 a month for day care. So with those two items alone that is $40,200 a year solely on child care and a roof over our heads. That number does not include bills, food, car insurance, clothes, etc. So you can imagine that money goes very quickly.

My son has had no health issues other than a few ear infections and colds. My point is that you can plan around kids and think you have plenty of money set aside for these things but when it all happens this stuff starts to add up. I don't really have any advice for you but I just wanted to share my particular situation. If you guys feel like you are mentally ready for kids then I think you know whats best for your own family. You'll figure a way out to make it work. Just know this... kids are exhausting and you'll never sleep as well as you used to. There is a totally different level of stress applied when you know you are responsible for this little life than knows nothing of the world around it and can't do anything for its self. Besides that, its massively rewarding and exciting to see this little "thing" develop and grow into a personality. And even silly things that you or I wouldn't be impressed with are so impressive with a small child (walking, blowing bubbles, etc)

You'll be fine. Just figure out a good plan of attack and you can handle it.

 

[TheStateUofMS]

Seriously that's so much **** I can't read through all of it.<div>
</div><div>Here's where I am:</div><div>I have been out of school for a year and working with a good job ever since I graduated. I have one very young child, but child care is not a problem, I'm single, renting for a good price, paying the rest of my bills on my own except utilities which is included in my rent (car insurance, life insurance, food, gas, you name it). The $200.00 minimum is what I have been doing, but I think I am going to go ahead and just double my monthly payments.</div><div>
</div><div>I have been thinking that the interest deduction really is a great thing and I will take full advantage of that as I started paying them this January.</div><div>
</div><div>Here's one more quick question...I contribute to my 401K and some other retirement vehicles. I am a financial planner, so I know the importance of starting early, so I really don't want to stop doing that, but would it be smarter (from those of you who know) to go ahead and contribute that towards my student loans instead of 401K?</div><div>
</div><div>Also, I have absolutely no intentions on getting married anytime soon, so there will be no spouse income or anything like that bearing something unforeseen.</div>

 

[HighPointDawg]

which is why getting married and having kids in your early 20's is insane.