Today’s post is your own tale on why i did son’t spend down my figuratively speaking during grad college, though I experienced the chance to. There are numerous factors you should think about whenever the decision is made by you of whether or not to reduce student loan financial obligation during grad college. Within my specific situation, based on both the mathematics of this situation and our disposition, it made more sense to contribute cash to other monetary objectives during grad college.

Once I graduated from undergrad, I had $17k of student loan financial obligation, $16k subsidized and $1k unsubsidized. We thought we would defer my figuratively speaking inside my postbac fellowship and PhD, and I also didn’t spend down my figuratively speaking in that duration. Although my stipend afforded me the flexibleness to create progress on my loans I had higher financial priorities than making payments on debt that was effectively at 0% interest if I wanted to.

My Debt Was Not Pushing

I’ll make a small edit to my declaration that i did son’t spend down my figuratively speaking in grad college: We kept my $16k of subsidized figuratively speaking throughout my training duration, but I paid down the $1k unsubsidized loan through the 6-month elegance duration after my graduation from undergrad. I did son’t such as the reality it was accruing interest, unlike my subsidized loans, and so I paid it well once i really could.

Since the remainder of my loans had been subsidized, not just did we not need in order to make re payments in their deferment, they certainly were maybe not accruing interest. I happened to be money that is effectively borrowing 0% interest. Whilst in some situations it would nevertheless add up to organize to pay down or from the loans once they arrived of deferment, during my instance I experienced greater economic priorities.

We Had Greater Financial Priorities

I could divide my training that is seven-year period three parts: my postbac fellowship, my first couple of years guaranteed installment loanss in grad college, and my final four years in grad college (when I got hitched). My priorities that are financial various in each one of these durations, however in them all reducing my student loan financial obligation had been a reduced one.

Postbac Fellowship

Appropriate I helped my parents pay down their parent plus loans from my undergrad degree, which were accruing interest after I finished undergrad. We provided them $500/month over summer and winter, which initially had been a rent-equivalent because I happened to be coping with them, but even if We relocated out I proceeded to deliver them the funds.

I additionally contributed $200/month to my Roth IRA (10% of my revenues) because I experienced started researching individual finance and discovered that become commonly offered advice.

The loan repayment money, and paying for my living expenses, my stipend was exhausted after contributing to my Roth IRA, sending my parents. Fortunately, I happened to be released through the relational responsibility of giving my moms and dads cash soon after I began grad school.

First couple of Several Years Of Grad Class

Starting grad college brought a kind that is new of into my entire life: a car loan. We nevertheless had the mindset that any loan that has been accruing interest had been one worth spending down first, it off in two years so I decided to send $200/month to that loan to pay. I became nevertheless contributing 10% of my gross income to my IRA, and I also also started tithing. After satisfying those monthly bills and paying for my cost of living, i did son’t have plenty of discretionary cash staying, and I also didn’t even contemplate using it to cover down my figuratively speaking.

Final Four Several Years Of Grad Class

My better half, Kyle, (also a student that is grad and I also got hitched after my 2nd 12 months in grad college, and combining our funds intended a total reset of our monetary status and priorities.

Kyle was indeed residing an effectively frugal lifestyle before we got married, so he actually had a good amount of cash sitting around(unlike me– my frugality took a lot of effort! ) and also had only started contributing to his Roth IRA a year. Right after paying for the percentage of our wedding costs, we unearthed that we had been kept with about $17k. We created a $ emergency that is 1k and set $16k apart as my education loan payoff cash. Our top monetary priorities became maxing down our Roth IRAs on a yearly basis (which we didn’t quite find a way to do, but we gradually incremented our preserving percentage as much as 17per cent by the end of grad college) and building up the balances inside our savings accounts that are targeted.

We’re able to have paid down my student education loans with Kyle’s cost savings as soon as we combined our finances, but rather we made a decision to test out investing.