Wednesday, April 20, 2011

about to get to work!

PACKING! woo! actually, my real goal for today is to clean up/pack up a room in my apartment. i know i can do it, so there. i have no excuse to leave my apartment today before the afternoon, so i'm going to get to it (after this blog post, ha).

i called one of my loan servicers and turns out the loans i had from my first first year of med school will be in "forbearance" until the rest of my loans use up their grace period in november. i guess they were smart enough to realize that i was a med student? who knows. the letter they sent me was automated, so i suppose that everyone gets a notice that says "you have to start paying soon", but when i called, it was "just insurance, you're in forbearance until the rest of your loans' grace period expires". well, in order to apply for forbearance for the rest of my loans, i just have to fill out some paperwork. the only catch is that i need my residency program official's signature, which i can't get now, obviously. so i'll do that in june once i'm there 100%, plenty of time before november. and just to explain forbearance, that means you have to pay just the interest earned on your loans...ALL of your loans, whether they are subsidized or not. i believe you also have the option of not paying the interest and just letting everything capitalize (add on) to your actual loan amount, but that would lead to just having to pay more in the long run. always better to be able to put down SOMETHING rather than nothing at all. deferment means the government picks up the interest earned on the subsidized loans, but not the unsubsidized loans. and since i didn't get my loans before 1993 or so, i don't qualify for deferment during residency because i'll be making too much money and i won't have any other hardship during that time. and please correct me if i'm saying something wrong, but i feel like at least inside my head i have the correct gist of things!

so here's my plan (at least for now) for loans: getting forbearance on all my loans and paying off at least the monthly interest every month on all of those loans. i have about $7,000 worth of institutional loans (through my school) that my school will waive all finance/interest fees if i pay that $7,000 off in full by certain dates next year. so i will pay those loans off in full, because why would i rack up more money from only $7,000 worth of loans? the rest amounts to about $115,000 with a fixed 6.8% interest. (that amount may sound like a lot to non-med school people, but trust me, i know i am VERY fortunate to have only racked up that much debt! my school is very economic, even for a state university.) i understand that will be a hefty monthly payment just paying off the interest every month, but even something will help in the long run.

i know there are various consolidation plans out there, but i don't want to draw out the process any longer than it should be. or maybe i'm naive about those plans. on the other hand, i know that i'm responsible enough to be able to check with all my different servicers (3 total, 4 if you count my school) and make sure everyone is paid on time.

at least i don't have to make any sudden decisions right now. blah! suggestions are welcome, if anyone has any. and yes, i've looked into IBR.


chasingzebras said...

I can't decide what to do - whether or not to forbear, defer, or do IBR. I'm DEFINITELY not doing the 10 year plan though. Wouldn't be able to eat!

Anonymous said...

Don't know what your interest rates are, but consolidation dropped mine considerably. I also have the option of setting the monthly payment amount myself (as long as I'm paying at least the minimum) and receive a further break on interest by paying directly from my checking account, which means I don't have to write checks. May be something to investigate before you become very, very, very busy.

frylime said...

anon - thanks for the advice. i'll have to look into that...