Saving without the SAVE Plan
my student loan repayment journey so far
My student loan repayment journey has been a hot mess: “hot” because I paid off 1 out of 4 loan groups (they’re a mix of Direct PLUS and unsubsidized loans) and “mess” because I was on the SAVE plan and we all know what’s (not) been going on with that. Tsk tsk. I like to be open about my loan repayment journey for awareness and discussion purposes. It certainly doesn’t help to keep mum and drown in financially anxious thoughts at night alone. Let me catch you up.
Cue ABBA - Money, Money, Money 🤑
I took out federal loans to cover the tuition and living expenses for my Master of Public Health program over a two-year period. In retrospection, could I have avoided taking out federal loans for my living expenses? Possibly. So do I regret that decision? *crying in despair and some denial* No. I had independence and even used a small portion that was left over as a down payment on my car after graduation.
I had only one repayment goal: pay my loans off as fast as reasonably possible. I’ve been following the Avalanche Method, which means paying off the loan with the highest interest rates first to save money on overall accrued interest and potentially shorten my repayment period.
Note: I am not eligible for the Public Service Loan Forgiveness (PSLF) Program and do not have other financial responsibilities.
I enrolled in the Biden Administration’s Saving on a Valuable Education (SAVE) Plan last year, which pushed my monthly payment deadline. The SAVE plan was placed in forbearance with a zero percent interest rate for a few months this year. Instead of repaying my loans during this period, I put the money towards repayment in my high-yield savings account to accrue free money instead. #GirlMath (Thanks to my smart friend who posted on her socials that she was doing this so that newbies like me could also benefit.)
I recently got a Bilt credit card to help with my loan repayment journey and pay rent, of course. Earlier this year, Bilt announced that members could redeem Bilt points (Mastercard rewards) directly toward eligible student loans. I will take what I can get and you should too! Here’s my referral link in case you’re interested.
As of this month, I’ve restarted my monthly payments since the Department of Education resumed applying interest to loans held by borrowers enrolled in the SAVE plan. I had a 5-year repayment plan which may not be possible without a raise, promotion, or new job. I’ve told myself it’s okay to fall behind as long as I continue to work towards my financial goals. I’m leaving it up to God.
Please share if you have other suggestions or want to vent. 🥲