The Mom Weekly Volume 9: September 19,2023
Notes:
I’m still recovering my energy from COVID, and beginning to like food again, which is a good sign. But I still want to take naps every couple of hours. 🙂
What to Do About Student Loan Payments Restarting? Good Question.
“(P)utting things in autopilot on student loans typically does not yield better results.”
—Sarah Catherine Gutierrez, CFP
Payments on student loans begin again after a 3-year plus hiatus, so it’s time to consider options.
Let me say, after doing a lot of research and reading: it is …. confusing. When I first began to look at this, it seemed as if the new SAVE plan would be worthwhile for everyone, including those who are still in graduate school. But now I’m unsure.
Just because it’s confusing doesn’t mean that you should do nothing. That’s the easiest path, and, trust me, I’ve been there. But doing nothing is NOT the right move—see the quote that begins this!
Rather, it’s worth spending an hour or more this week figuring our your student loan plan—for now—and implementing it. As I read it, even if you join the SAVE program, you can change back if you want.
I would listen to the first half of this podcast episode from the White Coat Investor.
Listening to this got me started on exploring the SAVE program and encouraging those with student loans to make a plan for future years. (You can read the transcript at the link if you’d rather not listen.)
More resources:
Here are a few articles to read about student loan payments restarting and making a plan:
Student Loans are Resuming—Now What?
Federal Student Aid website explainer on SAVE
How Does the Save Plan Work? — Fidelity
A Few Ideas for for Exploring Your Options
There are two reputable companies that offer student loan consulting. If you are still confused after doing your own research, maybe invest in this:
A consult here is a flat fee of $559.
A consult here for a 1-hour call is $595.
The benefit of both of these is that the people giving advice are trained on student loans, and give advice only on student loans. Getting advice, even if it is “free,” from someone else, like a financial advisor, might be sub-optimal.
My thoughts
If I had student loans now, like I did 100 years ago, I would be interested in paying them off as quickly as possible. Even though taking out loans for school is “good debt” to incur, I don’t think it is good debt to “keep on the books.”
I might enroll in the SAVE program, then use those low payments and interest pause to save aggressively for paying them off (and other goals). At some point, I’d probably pay off the student loans in one fell swoop.
There are only two kinds of debt I would not want to get rid of quickly:
*mortgage debt.
*very low, or 0 interest debt. This could be, for instance, a car loan taken out when rates were much lower. No need to pay that off, when you can earn close to 5 percent in a high-yield savings account.
Otherwise, I would make a plan to pay things off as quickly as possible, at the same time saving for future goals. The order I would pay them off:
*high-interest credit card debt.
*other high-interest debt, such as a personal loan or higher-interest car loan.
*student loans.
If I worked at a PSLF-qualifying organization, such as a non-profit hospital or government agency, I would investigate going for that—public service loan forgiveness. If you work for a qualifying employer, your loans are forgiven after 10 years. Here’s an overview of the PSLF program.
Also, while we don’t have Parent Plus loans, it looks like there is “cliff” approaching in 2025 that would limit options for paying it off or enrolling in income-based repayment plans. If I had these, I would review this article and keep track of any changes.
Remember: Everyone has different goals and risk tolerance when it comes to money. I don’t think there is a one-size-fits all approach, but it is worth exploring your options and making an informed decision. You know what they say—the more you know….
Love,
Mom
An interesting read: We are repaganizing
This recent piece from Louise Perry entitled “We are Repaganizing” is extremely important, and I urge you to take the time to read it. (I know it seems out of place in a student loan-themed newsletter, but this is just so well-written, I didn’t want to put off sharing it).
Finding a good quote to excerpt is difficult because I want to quote the whole thing. Here are just two:
The supremely strange thing about Christianity in anthropological terms is that it takes a topsy-turvy attitude toward weakness and strength. To put it crudely, most cultures look at the powerful and the wealthy and assume that they must be doing something right to have attained such might. The poor are poor because of some failing of their own, whether in this life or the last. The smallness and feebleness of women and children is a sign that they must be commanded by men. The suffering of slaves is not an argument against slavery, but an argument against allowing oneself to be enslaved.
Most cultures—perfectly logically—glorify warriors and kings, not those at the bottom of the heap. But Christianity takes a perverse attitude toward status and puts that perversity at the heart of the theology. “God chose the weak things of the world to shame the strong.”
…..
The moral innovation of Christianity was to reconceptualize rape as a moral wrong done to the woman herself, regardless of her birth. Paul’s prohibition of (to use the Greek term) porneia—that is, illicit sexual activity, including prostitution—upended an ethical system in which male access to the female body was unquestioned and unquestionable.
An interesting listen: Founders podcast on Rose Blumkin—Warren Buffett’s Favorite Founder
Here’s the podcast link.
I found this such an entertaining listen about Rose Blumkin, a woman who was the founder of Nebraska Furniture Mart, bought by Warren Buffett. I definitely would not have wanted to be her, but she was a true force of nature.
David Senra does such a great job profiling different “founders” throughout history by reading extensively, telling (in this case) her story through his perspective, comparing to other founders he’s profiled. Here are the show notes.
An action item: Two action items, actually.
1. make sure you have an account on https://studentaid.gov/ and check in on your student loans. You should be able to see them, and sort them by amount, interest rate, and more.
2. Run a calculator with your amounts to see what might be the best option for you in terms of your repayment. Here are two calculators I found that offer some good information:
That should get you started, and reading and listening to the linked pieces above will also help give you information.
What are you doing this weekend?
You know the drill here. Now that it’s Tuesday, what are you planning for the weekend? I’m going to suggest trying to cover four “F”s to get ideas flowing:
*faith—when are you going to Mass?
*friends—what friends will you see or connect with?
*food—any fun recipes you plan to try, or restaurants you plan to visit?
*fun—anything interesting you are going to play, watch, or do this weekend? Now’s the time to think it through, and put it on the calendar (even informally).