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Delaying my Student Loan Payoff

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At the end of this week, I will have all the money needed to pay off the smaller of my two students loans. However, I am not going to make that payment this month.

As of the writing of this email, I have accepted an offer to return to corporate as a full time employee. The official start date for my new role and salary is January 11, 2021. My title will be Production Operations Senior Manager and I will be working for a large financial services organization in their marketing department.  My salary will be 6 figures plus quarterly bonus based on hitting benchmarks.

It is the same company I’ve been freelancing as their part time marketing project manager for the last 4 months. And I will continue in my current role until the end of this month at the same rate and hourly commitment, which is not full time.

Transition Plan

For the month of January, I will continue to put in substantial part time hours with existing clients. This will allow me transition out of my roles and responsibilities for them. The goal is to give them time to find replacements and help train them. And yes, the new corporate job is aware of this transition plan and the time requirements.

I am not completely shuttering my business as I plan to continue to support my website clients and a few other clients who I do small projects for on a regular basis – blog writing for a psychotherapist, ministry newsletter for a missionary, etc. I enjoy the work, I’ve been doing it for 14 plus years and frankly, it just feels safer at this time.

Why the Hold on Debt Payments

I am not clear on the new payment schedule, what my actual take home pay will be and other money stuff with this transition. In order to be on the safe side, I have decided to hold the cushion that is earmarked for debt until my new pay begins. I also have 11 days in there where I believe I have plenty of work…but anything could happen between the end of the year and the 11th.

While this decision will delay my payoff of this student debt by, hopefully, no more than a month, it gives me a great level of comfort on the financial front. It will cost me around $15ish dollars in interest.

So hang in there with me…January should be a BIG month on the financial front. Increased salary, complete change in work and smaller student loan paid off. Not to mention, after I see what my new take home pay will be, I will create a new plan. I already know what I’m going to focus on, just don’t know how it will look with the new income.


53 Comments

  • Reply Cynthia |

    Good for you! I remember how unfortunate the last corporate job turned out so I don’t blame you for holding some cash back from bills.

  • Reply Meghan1227 |

    I may be in the minority here, but I don’t think you should delay the payments. Not just because it is December and making the final payment will give you the opportunity to look back next month and see how much progress you made in a year, but also because you have a hefty emergency fund and some continued work with clients that can help you fill any gaps in your salary if it turns out your deductions affect your take-home pay more than you have anticipated.

    Your emergency fund should be giving you the great level of comfort on the financial front. Withholding making payments when you will have money coming in and there should be plenty to cover your minimum expenses is just another excuse. Make the payment and continue down the blogging away debt path, no more excuses!

    • Reply Cwaltz |

      Generally, I am fairly conservative but I agree with you. I’d pay off that smaller debt even if it meant digging into my emergency fund a little bit to do it. She worked so hard this year to get that loan completely paid off by year end and to not do so on time is a let down. I’d have hit that goal HARD instead of coming up with excuses on why not to finish it off like planned. She did really good this year though.

      Hope, this post should have included a debt update though not just a “I’m going to pay it next month” blurb. Where are you on the loans?

  • Reply Rrr |

    Why would you make any more student loan payments when it will be forgiven when Biden gets into office? That doesn’t make any sense. The government (other taxpayers) can cover it. This is what the majority of Americans voted for. Take advantage of it, Hope. You deserve it!!

    • Reply Honey |

      Agreed! Do not pay any more because they will likely be forgiven. Why don’t you take a trip instead with your kids? What about Birmingham or on of the Georgian Islands? This will be free money for you. You could pay on your car instead if you really want to pay on something but I would take a trip.

    • Reply Red |

      This! Go celebrate your new high paying corporate job. Your student loans will be forgiven. Reward yourself for your hard work.

    • Reply Jessica |

      Lol. Not sure if the student loan forgiveness was meant for people in their 40s with six-figure salaries but ok.

      • Reply Rrr |

        Hope has struggled with this debt long enough. If the government will forgive it, she should do that instead of paying the student loans. I have never heard an age limit on the forgiveness. The program is designed to make it easier for people and this would make it easier for Hope and her family. Biden has already been elected so this is almost a done deal.

        • Reply Jessica |

          My comment had much more to do with morality than age. She has the money to pay back her loans. Loan forgiveness is meant for people who cannot pay them back.

        • Reply Cwaltz |

          The reason she struggled with them is because she avoided them – for years. Literally. This year she finally put the pedal to the metal and paid off over $10,000 while still allowing for some travel and splurged.

          Let’s not play pretend that Hope is a person who didn’t have agency when it comes to these loans please and that up until this year that she didn’t put these last on her list of things that need to be paid, the only thing she has ignored more is preparing for future her(luckily with a 6 figure income she should be able to be able to play catch up fairly quickly.)

          • Deb |

            I agree. I have student loans and continue to make payments and will not rely on the goverment to erase the student debt. Hope has the ability to pay the one student loan off and that is what should be done. But as we know, Hope seems to do her own thing and eventually it may get paid off or she will wait and see.

  • Reply Mina |

    Why would you even consider paying anything toward your student loans when they will likely be forgiven? I would save that money. Forgiveness is free money.

    • Reply Deb |

      Loan forgiveness isn’t free. Someone will have to pay for it. I had a 35K student loan in 2017 when I graduated from my MSN program. I have 3465 left to pay and then it’s finished. I support 5 people and have made thousands of dollars in payments this year due to the forbearance. I have an income of less than 6 figures. Hope should pay her loan since she has the income to do so.

  • Reply Wamy |

    I also agree on not paying your loans. If they will be forgiven (which is what is promised), why make payments? Put that money into a retirement account instead. I don’t see any point of you paying them when you are so far behind with respect to retirement savings.

  • Reply Hank |

    I would definitely not make any more loan payments. I suspended all of my student loan payments as I owe just under $50,000. I am counting on my payments being forgiven. I do make a very good income so I will pay it back in my taxes eventually.

  • Reply Cheryl |

    I’m not sure if the above posters are kidding or not but if you took those loans out that many years ago you would think making so much money that you would feel a moral obligation to pay them.

    • Reply Angie |

      Moral obligation? Cut that out. You think Trump/Amazon/Facebook/Tesla/ANY CORPORATION or rich person is following their contracts because of morals? Nah, they’re living within the rules of the system to get the biggest benefit for themselves.

      If that was the case Trump should pay billions in real estate and bankrupted loans. Instead, it’s called leverage and being a smart business man. He used the laws (presumably legally) to make more money. How come when the common person finally gets a government benefit, there are always others trying to make you feel bad for taking it because… morals.

      • Reply Drmaddog |

        Yes, he should. It’s unconscionable how it works in this country, with socialism for the rich and capitalism for the poor.

      • Reply Cheryl |

        Biden isn’t going to pay the loans off with his money, he is going to raise taxes. Just because Trump has no morals doesn’t mean I don’t.

      • Reply Rrr |

        Right! I don’t see why Hope can’t take advantage of a program that she would might be eligible for. Anyone CAN pay their student loans but its easier to vote in someone who can wipe them out. The morality lies in the people who said they would do it.

      • Reply Lisa |

        Of course he should. No one said he shouldn’t. And Hope should pay her loans. She’s had ample opportunity to do so over the last 20 years. It’s a slap in the face to people who actually sacrificed to buckle down and paid theirs themselves. But hey, go ahead and take another vacation instead.

        • Reply Drmaddog |

          It’s also a slap in the face for those of us who chose military service to pay for schooling instead of loans. Deploying to a war zone, risking physical harm, having most details of your life dictated to you, moving frequently, never mind the effects on family members.

      • Reply Deb |

        There’s honestly zero reason why Hope can’t pay off the one student loan she has and continue to make payments on the other one. I guess eeryone forgot how she managed to pay a significant amount of the one loan off with the income she all ready has been making?

    • Reply Drmaddog |

      Agree. I’m a Democrat but I am against loan forgiveness. I knew spiel who took out loans for spring break trips and living expenses. I do think that interest rates should be slashed to no more than 1-2% and at least some of the penalties and fees eliminated in accrued debtt so people have a fresher start. I might be in favor of people who have already paid off an amount equal to the original principle and still owe a mountain due to interest/penalties have the remaining debt forgiven

      Furthermore, currently the senate is still gop and won’t agree to debt forgiveness. Additionally Biden’s suggestion is up to 10k forgiveness which may only apply to those in ‘extreme financial distress’. Even if any of this came to fruition, it would be months from now and hope might not even qualify. And she owes more than 10k.

      • Reply Angie |

        I’m against it also. But if it goes through, I think anyone and everyone who is eligible should take it. We don’t get to decide though. So it’s a moot point.

        No one really knows if it will go through, or what it would look like exactly. I’ve heard it could go through executive order. I’ve heard 10k but also 50k. I agree, it’s very unknown and up in the air. And could also never happen. But the potential benefit far exceeds the cost of interest (if you can manage to not spend the money!).

  • Reply Deb |

    Hope, I would highly encourage you to pay off the smaller of the two student loans if you all ready have the payment. It would be foolish to hold on to that money and then find another place for it within the month. You have said repeatedly that you have an adequate emergency fund and are going to keep some of your side gigs as a source of income.

  • Reply Klm |

    Are you all pranking her? Biden can’t wave a magic wand and forgive all loans. This is not going to happen immediately, and maybe not at all. And even if it does, there’s no knowing what the criteria will be or eligibility….

    • Reply Cwaltz |

      The person thinking they are going to be forgiving $50,000( and it was Liz Warren, not Biden who “promised that) is probably going to be in for a rude awakening. Biden has suggested he is open to canceling $10,000 without congressional action( and economists have already mentioned that forgiving someone like Hope who now will be making six figures, will have minimal benefit to economy so there may indeed be income requirements or some sort of tax implications for this.) That being said, Hope still has well over $10,000 to pay with loan forgiveness of $10,000 and that is even with paying her smaller loan off.

    • Reply Sarah |

      Kim, I agree. I’m reading all these responses and am wondering if they are all serious. Such a different tone than other responses on other posts. Just because a politician says he wants to do something doesn’t mean it is going to happen. I have stopped listening to State of the Union speeches as they are all dreams. Hardly anything gets done. And, I cannot believe student loans are going to be wiped out with no payments required. If they are, I’m leaving the country as taxes are going to be 80%. Between covid and paying off student loans, there will be no money left to pay for anything.

  • Reply SMS |

    Biddn’s plan was to forgive $10,000, not everything. It will take a long time before loan forgiveness really happens and how much is uncertain. In the meantime, Hope has to keep paying on the loans! I would pay off the smaller one anyway, but the main thing Hope should do is immediately start paying into the 401k. At that salary level and with a low rent, she could easily max out the 401k from the beginning. Now THAT is exciting!!

    • Reply Drmaddog |

      Like this plan.

      Another thought, debt forgiveness may apply only to federally backed loans and not private.

  • Reply C |

    Hope,
    Great job working hard to better your situation and repay the money you borrowed. I too borrowed money to pay for higher education. I also worked hard to pay it off as quickly as possible. This expectation that student loans will just be forgiven and others will pay them back in taxes is one of the most entitled things I have heard. Nothing is free people, and no one owes you anything. Everyone on here should realize that counting on free money, especially from the government, is risky and ignorant.

    • Reply Angie |

      Wow, for a personal finance blog, a lot of you don’t give very sound financial advice….

      No one here has said they feel entitled to student loan forgiveness. We’ve only said to wait a few months and see what happens since this is the closest the US has ever been to entertaining the idea. No one is “counting on” free money but rather assessing the probability of forgiveness happening and what the end effects of it would be. It’s not ignorant (it’s actually pretty smart to look ahead) it’s called cost-benefit analysis and risk assessment.

      If you get laid off do you refuse unemployment because you planned for it and already have an emergency fund? Would you use your emergency fund in full before taking unemployment? No, you most certainly wouldn’t. Should everyone who was still employed reject the economic stimulus check back in August if they didn’t need it to pay rent/food?! I could go on and on.

      The $60 or whatever she will pay in interest over 6 months will be nothing in comparison to potential thousands of dollars being taken off her debt if it goes through. And if forgiveness doesn’t come? Just take that money from your savings account and payoff your loans in one swoop. That $60 in extra interest, is not going to make or break her. But a couple extra thousand could help her finally get past the hump. The advice is to wait and see. Not feel entitled to it.

      • Reply Drmaddog |

        At least one poster explicitly states they are ‘counting on’ debt forgiveness. And with others stating they would take the money and travel instead, or have suspended payments because loan forgiveness was promised, that seems to indicate they are counting on it too.

        I also think there is a difference between getting unemployment insurance or a stimulus bonus in times of extreme need versus ignoring debt and/or deferring payments so many times over so many years then hoping someone else pays it for you.

        And for the record, unemployment IS an entitlement program. Drawing equivalencies between that and student loan forgiveness would mean that the latter is also an entitlement program and, therefore, people are…entitled…to it.

      • Reply jj |

        People are just upset that they paid their loans off and Hope and others may see a smidge of loan forgiveness. It doesn’t surprise me, folks are overall pretty selfish.

        • Reply Cwaltz |

          I never took out a loan to begin with. I joined the military with parental permission at 17. My college, when I attended ,was covered using my GI Bill. I used it because the government required me, a sailor, to contribute at least a small portion towards my own education. It was essentially $100 a month for 12 months in your first year of service. In return it gave you access to up to.$36,000 in benefits. I received money for schooling each semester while Pell grants actually covered the cost of my schooling itself. My schooling while I attended was “free” but it was paid for by completing a $1200 contribution in my first year of service and a 4 year enlistment contract(had I not completed my contract the money would be forfeited.)

          Personally I support free community college since military service isn’t for everyone( nor is formal education either.)I don’t support free trips to Florida for spring break so you can have the “college experience” at taxpayer expense though and the way “student loans” are packaged right now some of the people with hundreds of thousands in back loans paid for way more than dorm rooms\ student housing or dining hall passes with these loans.

          So your guess that some of us are “bitter” is way off.

  • Reply Other Lisa |

    I agree with Cheryl – why is everyone so sure that loans will be forgiven? I can’t be the only one that remembers “no new taxes” – just because it was said on the campaign doesn’t mean it is a sure thing.

  • Reply jj |

    Ya’ll must be fun at parties. Big hurt because folks aren’t going to suffer with crushing debt!

    • Reply Cwaltz |

      This isn’t a “what to do at parties” blog, it’s a debt blog.

      As far as “crushing debt” goes she just announced she got a six figure job and her total debt per her last debt post had her under $50,000 in total debt including her car which will not be forgiven. She said earlier she intended to pay the smaller loan off by year end. She should follow through, imo. As far as “crushing debt” goes using your logic the government should pay my mortgage and the mortgage of others who took out home loans which total in the hundreds of thousands so we too can be absolved of “crushing debt.” How is it different in Hope’s case where she clearly “benefits” from the education she paid for and received?

      Listen I understand that some students are dealing with owing large sums of money that they borrowed that can not be discharged in bankruptcy and that they may never be able to pay back because a college degree did not necessarily equate to financial success. I also understand that young people sometimes do things mistakenly and can be taken advantage of by people who offered “easy credit” to them. I’m not opposed to helping but way before we even talk about forgiving debt there should be a conversation on what a “student loan” should be going forward. If you want to eat out while in college and party for spring break that should not be something you get to do with “student loan” money. I ,also by the way, support Dr. Biden in her belief that attending community college should cost zero if you try hard and want to attend. Most communities already have programs that allow you to obtain grants if you have a 2.5 and are willing to do community service each semester and I support nationalizing this and screaming about it from high school podiums. However, I think that this idea that people who used easy credit and racked up hundreds of thousands doing things that only were loosely related to schooling bares discussing before we start erasing debt.

      • Reply Drmaddog |

        Yes!! Student loan reform is absolutely necessary. Interest Rates should drop to a level to cover just the cost of admistrating the loans. Private loans should be bankruptable so those companies will have some skin in the game instead of passing out easy money at high rates knowing they will get it back in the end. Any loan that allows a payment so low that the balance grows should be prohibited.

      • Reply Drmaddog |

        And yes to the loans money going to non school related items. I knew someone who had a scholarship that covered the entirety of their costs and every year they took out the max in federal loans to put into the stock market with the plan to pay off the principle when they came due and keep the profits they anticipated by investing. No clue what actually happened with that fool but if he still has his loans, does anyone actually think they should be forgiven??

        • Reply Angie |

          Yup, he should definitely be able to keep it. It’s called leverage. Did you ever buy a house with a loan and then accept the gains when you sold?

          • Drmaddog |

            No one but me paid for my mortgage. I certainly didn’t fail to pay it and then expect the government and taxpayers to give me my house for free.

            My actual point, however, is the principle he borrowed that he used to play the stock market. If he still has that outstanding and not a dime went to education costs, no way that should be forgiven.

          • Mina |

            The issue isn’t whether they should be or not. Biden was elected by the majority and promised to pay off student loans, ar least $10,000. Hope should plan to take advantage of it. The same goes for any other entitlement program. Of someone has an IPhone X and smokes weed everyday but qualifies for food stamps, should they take it or not? If they qualify, then why not? It’s just harder when one actually sees the poor choices they make to agree to the entitlement programs but that’s not their fault. It’s the politicians who have created the problem. Hope isn’t the problem here. It’s the politicians who have promised these lofty promises to get elected.

          • Drmaddog |

            Student loan funds Are supposed to be used only for expenses that fall within guidelines set by the government When you sign the application for a student loan, you are stating that is what the funds will be used for. Investing isn’t the stock market is not among the acceptable expenses. Taking that money, promising it will be used for education costs and instead buying stock is fraud. Fraudulent loans should not be forgiven.

      • Reply jj |

        Not so much you, but other folks who seem upset that anyone’s loans will be paid off. Most folks suffer with the debt for quite some time. It is not their fault that the situation is out of hand for the most part? And making 6 figures does not always mean your debt is easily achievable. I think Hope should wipe out the small one, and see where Biden falls. But its more so the disdain for people who may get debt relief, which is fairly obvious in some of these comments.

  • Reply Margann34 |

    Whether you agree with student loan forgiveness or not, let’s be realistic. It is highly unlikely that every person with student load debt will have it all forgiven. More likely is a set amount of loan forgivness per person or forgivness in certain situations (low income). I would not make any decision about student loans until a law is written and passed.

  • Reply LeisureSuitLarry |

    It seems like the height of irresponsibility to expect that student loans are going to be paid off by the government.

    First off, Biden isn’t even the President yet. Second, the runoff election in Georgia are going to have a massive impact on even getting this passed, and that election is going to be close. Third, even if a student loan forgiveness program is passed, I expect it will be much like the stimulus package earlier this year. The amount of loan forgiveness will probably be gradually decreased based on how much you made in the previous tax year. For a 40-ish person making over a 100 grand a year, the amount that may be forgiven is probably pretty low. And the last, and most important point is if you’re loan is backed by the government, some or all of the loan might be forgiven (again probably based on how much you made), but if you’ve refinanced with an institution that is not the government those loans probably won’t qualify for forgiveness.

    Stopping payments on student loans because you think the government is going to bail you out is not a smart or responsible move.

  • Reply JP |

    I’m surprised everyone thinks all student loans are just going to get a major finger waved and poof they are gone. Not gonna happen. Trillions in loans out there. And what does that mean going forward? Everyone who is eligible would just max out all they can since they are just going to disappear after graduation. Most likely some will be forgiven as you pay some, and most likely for lower income only.

So, what do you think ?