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How long did it take you to pay off your college debt?

Now should I or should I not , pay this debt off in full?

  • *(all figures are not exact figures but very very close) I am recent college grad and while working two part time jobs in college I had saved enough money to pay off $7000 of a non-interest accruing education loan. now, the only debt I have left is (to date) an $11,000 private education loan with 7% quarterly interest . I currently work full-time and I make let's say about a safe $1600/month in a sales-based position. I currently live with family, and my monthly expenses are about $800 , so I save about give or take $800/ month. (debt=11000,income=1600/month,savings=… me? Alright .. SO my goal is to be enrolled in grad-school by Fall 2012 and my hope (which atm I think i have a good shot at) is to land a graduate assistantship where my education will be paid for and hopefully NO MORE DEBT FROM HERE ON OUT. what I have left is this looming $11000 from my undergrad . I currently have about $13,000 in my personal savings. From everything I've outlined , do you think it would be wise for me to pay this debt off in FULL , say by March ? since the money IS there and I can? if not yet, how much should I have saved first? Also don't forget , it is compound interest . Even though I'll "feel" broke as hell I'll be literally DEBT free and can build from then on. I don't know . I'd like to hear informed perspectives. I'm a relatively frugal guy and so-called "suffering" for a little bit is fine with me bc delayed gratification is what this is all about. success is a journey not a destination right . lol. thus far in my life i've taken the right and responsible steps, and I just want to make sure that I continue to, because I have ambitious goals for myself and want to do things the SMART way. thanks for everyone's time and input. you seriously have no idea how much it means to me!! I want to see all sides of the situation. advantages/disadvantages to paying off the 11000 one time *ps: by March I estimate I'll have $16000 saved . roughly. pss: i have health care plan , car is the only emergency situation I can think of , if something happens or whatever

  • Answer:

    If I had known then what I know now I would have paid off my student loans in full quickly.

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The frugal guy ... who pays 7% (per YEAR, I hope you meant) and earns 1% (or less, and then taxable) in a savings account .... and has a college degree .... was not wise. You should have been making extra principal payments all along !!!!! Yes, pay off the $11000 now*, and "earn" $200 tax free in the next 3 months. {Take your time with the interest free loan. Ooops, sounds like you paid it off first.} *unless you would incur a penalty for early withdrawal - but even then.... [ or 3 or 4 big monthly payments if you are afraid to let go of all of the cash right now. That would be understandable, and maybe wisest at this point, considering the short-term-ness you have set for the loan, and your job wages will be refilling your financial coffers during these 3 months, and you will not feel broke. ]

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