by Ashley
Thanks for your comments on my last post about potentially reconsolidating my student loans in order to qualify for Public Service Loan Forgiveness (PSLF). I read all your comments, thought it over, and decided that ultimately you guys are right (you’re always right!).
It doesn’t make sense to try to fix a short-term problem by making major long-term changes.
I don’t want a higher interest rate. I don’t want to be locked into stringent terms and criteria. I don’t want to feel the stress that the program could disappear or be discontinued and I’d be stuck with this boat-load of debt (even higher at that point, given the higher APR). In fact, when mulling it over, really there were two things about the program that appealed to me most: (1) locking in a lower monthly payment, and (2) having a definitive “end date” for when the student loans would be GONE!
Are lower payments really that important long-term???
As readers pointed out, the monthly payment problem is a short-term thing. Hubs has started working again (albeit part-time – he’s a personal trainer), but his income is already picking up as he’s gaining clients. If he stays at his current place of employment, he will enjoy a nice bump in his hourly rate at the 6-month mark. For new readers, hubs recently returned to school full-time so he can switch careers. In only a few more years he’ll be graduating and entering into the full-time work force again.
Meanwhile, this is our last year of paying for childcare (our twins are in kindergarten and although they’re in a state-funded charter school, the state only subsidizes half-day kindergarten so we still pay out-of-pocket for “full day” kinder.). We will have to get through the Spring semester and summer, but by Fall of next year (and “Fall” starts in early August at their school) we’ll only have childcare expenses for after-care, which is really negligible. We are currently paying about $30-40/week for after-care. That’s practically nothing compared to the full-time care we’ve been paying the past….oh….since they were born! (side note: they did childcare part-time from birth through age 3, and have been full-time from age 4-5. But even at only part-time, childcare from the time they were born up until this year has been our #1 largest monthly expense – even outranking our rent/mortgage).
Definitive Student Loans End Date
I decided to do a little investigating with my student loans in their current repayment plan (we’re in income-driven repayment). The plan is subject-to-change since it’s based on our income, but with things as-is, I figured out the “Paid in Full” date for each of my outstanding student loan balances. I have 7 loans in total, and their current “pain in full” dates range from December 2023 to August 2028! Now, I know that’s a very long ways off…..but remember half of the “pull” for me to do the PSLF was that it guaranteed an “end date” for my student loans. The end date would be 10-years. Well……as it turns out, my student loans are set to be fully paid within 10 years anyway! And that’s if I don’t get crazy and start paying way extra to get them gone sooner!!!
Long Road Ahead
I know the road ahead will be a long one. We still have a LOT of debt to get through. But, for some reason, seeing these end-dates made me feel hopeful. If they’re being projected at 10-years as-is, there’s NO WAY they’ll actually be around that long! We’ve got probably another tough 2-3-years ahead while hubs is in school. Hopefully we’ll feel a bit of a relief once our childcare costs go down and his income goes up from his personal-training raise. But once he graduates and re-enters full-time employment we should really start making some headway. If I look out another 7-ish years, well, all our personal debts (credit cards, student loans) should be gone and our mortgage will be low enough that we should be able to knock it out easily (we’re already in a 15-year fixed, as is, with 14 to go at this point). I’m 34 now. With a little luck and some hard work, by the time I’m 40 we’ll be totally DEBT-FREE and able to kick fully into savings-mode. It won’t be easy, but it will be worth it!
What’s your Debt-Free date? Are you already debt-free? How long did the journey take you?
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
Yes, Yes, Yes! I feel like this is the first real debt tackling post in probably about a year! You are getting back to thinking clearly about your finances. Keep it up! You can do it!
Remember that life is a marathon and not a sprint. You’ll get there. Just make sure you are making progress every month. Some months will be better than others and some years will be better than others!
It will be so great to get rid of that child care expense! That’s like 4 months away!
We are paying $1100/month for one 3 year-old, which is not terribly expensive for our area. I literally do not understand how families of more than one child do it.
Yikes!!! Our kids started daycare at 6 months for 2 days per week. That, alone, cost $1200/month. It’s insane the prices of childcare!! But, unfortunately, what I’ve found in my personal experience is that paying extra for quality childcare is 100% WORTH IT. For a short time we tried a couple of other options (one low-cost facility daycare, and one low cost in-home daycare), and both wound up being pretty scary experiences and very short-lived things (and I wish we’d never done either!) Hopefully no permanent scaring for life for our kids, but our (negative) experiences certainly left a lasting impression on me.
Gone are the days of paying some woman $25/week. Why shouldn’t childcare providers earn a decent wage?
Of course they should earn a decent wage! I think the childcare providers are really underpaid, like all teachers. But that doesn’t change the fact that a month of daycare for one child is almost as much as our mortgage.
That’s the spirit Ashley! I’m totally rooting for you!
Thank you!
Interestingly enough, I would kill to pay that for childcare. I’m in Canada and my son will start daycare in October when he turns 1 and we’ll be paying 2100 a month. When he’s 18 months it will go down to 1900. In Quebec the government has made it so everyone pays 7 dollars a day regardless of salary, etc. Which is how it should be.