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Any advice on paying off 65K in students loans?


I graduated in May with about $65K USD in loans:

15K in Federal Staffords @ 6.25%
Min payment is $140/mo

50K in Private (Sallie Mae) @ 7.25% variable.
Min payment us ~$400/mo.

At the moment I am paying the minimum on the lower interest Federal loan, and paying about $300-400/mo EXTRA on the higher interest loan.

I just moved home to save money so I am putting $800/mo in a non-tiered Money Market @ 5.2% APY.

10% of my monthly income pre-tax goes into my 401(k) (about $450), of which 3% is matched by my employer.

I am wondering if there is anything else I can be doing to help pay off my student loans quicker, in particular the private loan. Someone mentioned having my parents take out equity on the house at a low rate, used the money to pay off my loans, then I pay my parents.

Someone else suggested investing in other types funds, though I am not sure how to go about this, or if I should.

Anyone have any suggestions? Should I be doing something different?

Thanks.

I think you've made good choices so far: minimizing expenses by living with your parents, investing in a 401(k), focusing on the higher-rate loan.

That said, a few suggestions:

Since your savings are earning 5.2% but you're paying 7.25% to Sallie Mae, you're better off applying your money to the debt than savings.

Be sure you have a 3-6 month emergency fund (in case you get laid off, etc). Figure out your monthly expenses and save 3-6x that amount. Put this in the highest-rate account that is FDIC insured and liquid. A 5.2% money market is actually very good, but you can check http://www.bankrate.com just to be sure.

Keep funding your 401(k) to the max. The tax-deferral benefit is worth it in the long-run.

After that, apply all your spare cash to the debt, paying the minimum on the subsidized loan and everything else to Sallie Mae.

work. lots of jobs... 3 or more... time to take the money your saving and start with the lowest loan first... the 15k... start paying lots of extra on that... when it's done, work on the other one.

I have accumulated 40K in student loans over the years and after doing some research I went to Nel Net which is a consolidation company. They will group up the payments so you only have 1 payment and they gave me a really great interest rate it was like 3%. (I did this a few years ago) Plus I got another .25% off (down to 2.75% by doing an automatic bill payment through my checking account.)
I think its worth looking into. There are many different companies out there that do student loan consolidations but I like nelnet the best. Ohh yeah and by the way you can call them for free with no obligations and find out what your payments would be.
I hope this helps out. Good luck!

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