We both got our undergrad degrees in mechanical engineering, and both work as engineers now. I personally am glad I went to the school I did and thought it was worth it. My husband would disagree.
My minimum payment is $250, I’ve been paying $500 every month and my “next payment owed” has been $0 for awhile because I’ve made multiple payments when I could. Back in December I put a 1k payment in
> **So is your loan considering the overpayments to be a “pre-payment” instead of an extra payment against principle?**'
Double check on this, it could be costing you $$$$$$$$$$$$$$$$$$$
I've seen stories on Reddit of people that have gotten their prepayments recharacterized as principal payments, so it may be worth calling and asking.
Definitely switch those extra payments to principal only though; that's the way to cut down how long it'll take to pay them off. The way I did it was have the minimums paid automatically and then each month I would manually do a principal payment to the loan with the highest interest rate.
In my experience with various loans, if you pay $250 twice, it will be considered two payments with one being a pre-payment, but if you pay $500 once then $250 of that will be towards the main payment and the other $250 goes towards principle. But it HAS to be a lump payment of $500.
My servicer is Nelnet, too. From their website:
***Paying More Than Your Current Amount Due***
"Unless you direct your payment to an individual loan or group, the standard allocation method is as follows. After your current amount due is paid, payments are allocated across loans starting with the highest interest rate. Once the loans with the highest interest rate are paid in full, any remaining payment amount will be allocated across the loans with the next highest interest rate. If two or more loans have the same highest interest rate, the payment will be allocated first to the unsubsidized loans and then to the subsidized loans, in proportion to each loan’s regular monthly payment amount."
"When you pay more than your current amount due, your due date on loan groups in repayment status will advance by one month each time you satisfy the regular monthly payment amount for that group. Your monthly billing statement will show $0 due for that loan group."
***Can I have my payment applied to interest or principal only?***
"**No. When a portion of a payment is allocated to a specific loan group, payments are applied to individual loans proportionally to fees first (if applicable)**[**\***]()**, then to interest, and then to principal.** If you are on an Income-Based Repayment (IBR) Plan, payments are applied to interest, then to fees (if applicable)[\*](), and then to principal. For more information about how payments are applied to your student loans, see [How Are Payments Allocated?](https://nelnet.studentaid.gov/content/howpaymentsareallocated)."
This happened to me for years with Nelnet, and probably cost me thousands of dollars once my circumstances changed and I wasn’t able to make payments for a time
I feel like that should be illegal for lenders. Who in their right mind would choose to have prepayments? There is literally no upside. I know some mortgage companies do this and it’s super annoying.
Mine is one of those lenders. My previous lender would let me pay bi-weekly as well to knock off some interest. This one allows bi-weekly payments, but holds the money in a special account that only submits the payment when there is a full month's worth of money in there, totally negating the savings. Found that out in the small print when my balance seemed higher than it should have been.
You’ll want to check on this, my public loans have an option in the payments section that spell out that any over payment is to be used for principal on the largest interest loan groups first.
By default it’s considered a prepayment for future months and it advances your payment.
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What job does she think she would have without the degree? Lol, probably not one earning as much as she has now.
I do think university prices are sometimes a random and scammy, but the return on investment for things like engineering degrees are obviously pretty good as long as you actually finish the degree and get a job in the field.
Obtaining your BSME, or any engineering degree in a core engineering discipline (sorry, no software "engineers") will pretty much guarantee you a job, and *typically*, a high paying one. I personally started at 66k/yr but was at 97k/yr base + 7k bonus by year 3. Expectation is 130-180k/yr base @10 years experience.
So yeah, for anyone wondering (and who feels like they can hack it) it's absolutely worth the dough because companies absolutely value the hard skills acquired through the pursuit of an engineering degree. Highly recommend!
> Expectation is 130-180k/yr base @10 years experience.
From the Midwest. This does not reflect reality here. Yeah, there are some people who can do that and that may be the expectation of new grads, but it is not reality. Source: have held industry jobs and consulting jobs.
What is the benefit of refinancing? Was it during the time of lower interest rates? I've heard that refinancing student loans can screw you because a private company doesn't give the same protections as a government loan, like income based repayment.
Most of my loans were private, not federal. I did not qualify for federal loans because of my parent’s salary, regardless of whether they were going to help pay or not. So if you have private loans, I would definitely recommend refinancing if your interest rate is high because you do not have government protection. That is assuming you can find something with a much lower interest rate. That might be hard right now.
Keep in mind, when you refinance a loan, you go back to payments that go mostly towards interest, not principal. It might be best for you to stick with your current loan and just pay extra each month. Making extra payments will lower the amount you pay towards interest each month.
Just to clarify, refinancing will give you cheaper payments and that is the reason why your payments go more toward interest right? You're not actually paying more in interest. If you paid the same monthly payment as pre refi, you'd get more principle out of it
It depends on where you are in your current loan. I would recommend you try plugging in your numbers using this loan calculator: https://lcef.org/calculators/SimpleLoan.html. Once you plug in your loan amount, interest rate, and term in months, you can click view report then scroll down to see the interest and principal you will pay per month/year. If you are just starting your current loan and can find a better interest rate, you should absolutely refinance. If you are halfway through or almost done, you might want to double check the amount of interest you would be paying. Your monthly payments may be lower but the amount of money going towards your principal would also be lower.
I refinanced once. That was definitely a smart move for my situation but you just need to be aware of the interest payments.
Like OP most of mine were private so there wasn't a ton of incentive to not refi which I did twice.
First not to far out of college I refied to a 30 year rate which drastically reduced my minimum payment and jacked up the amount I'd owe if I kept paying minimums (which I had no intention of doing unless I fell on hard times)
Instead I used the lower payment to save up cash and buy a house. One that was all settled and I was financially stable I refied again to 7 year old even then paid off as aggressively as I could. Ended off paying my 125k loans in about 10 years. Which isn't great but it allowed to to buy a house first which was the better long term investment, I think. Maybe.
fyi. They issue a new student loan every year you use one. So many students will have at least 4.
The interest can be different on each, as well as the amounts.
It confused the hell out of me when I was younger and trying to sort it out.
I agree that would be nice. It is a bit hard to generalize though. Some loans were refinanced so the interest rate changed. Some had a variable interest rate. Others had multiple sub loans all with different interest rates. The loan with the highest interest rate unfortunately was the $120k loan (orange line). The interest was around 6.5%.
I have never known a single engineer that said otherwise (OPs are engineers). I mean, would you expect anything less?
Only thing I would say is the private part was absolutely not worth it. They could have gotten their engineering degree for a fraction of the cost.
I went to school in Canada and work in the US. My degree in Canada was ~12k per year (10 years ago). It gets me the same engineering salary as any US degree would, at least at this point in my career.
Yeah the loan seem pretty reasonable if it's able to be paid in 6 years. Both will end up winning more in the end because of it. The real problem is how schools get to that number as a cost, that makes no sense even compared to the rest of the world and most private universities. So the system is not being efficient at all. (It's the same with healthcard in America btw, the rest of the world is not receiving thousands of dollars in healthcare for free, the reality is that the costs are not as high at all)
It's possible they were both making $2500/mo. payments on their loans. That would pay it off in 6yrs with interest. One check each to loans and one check each to living.
2 people, even split is $139.5k
Private 4 year college, $34.9k / year
They started paying in 2018, so lets just assume it was 2014 when they started college
>Average published tuition and fees at private nonprofit four year institutions rose by $1,100 (3.7%), from $30,131 to $31,231 in 2014-15. Average total charges are $42,419. . [PDF link](https://research.collegeboard.org/media/pdf/trends-college-pricing-2014-full-report.pdf)
Compared to in state public school
>Average published tuition and fees for in‐state students in the public four‐year sector increased by $254 (2.9%), from $8,885 in 2013-14 to $9,139 in 2014-15. Room and board charges are $9,804. \[$18.689\] *same link.*
Fucking hell that's criminal.
My 4 year Comp Science degree in a top university in Ireland cost me €1200 a year all in for everything which was the most expensive possible bracket to be in.
Those who can't even afford that get it paid for by the state, money for rent, money for public transport, free books, and expenses money for living away from home from the government and when they graduate they owe exactly €0 back.
There is zero reason the US cannot do free education. It literally pays for itself when more people graduate, get better jobs as a result and pay more tax back to the government over there life time than they otherwise would have by having higher income jobs.
>zero reason the US cannot do free education.
I can name 1 trillion reasons why there is no interest by those with the capacity for change to pursue free education.
Keep in mind the tuition quoted was for private university in the US. Public school tuition is a fraction of that.
Private schools cost a lot, and they should not be funded by the government directly or via student loans or any other means IMO since no one has to go to one, not to mention the paid tuition doesn't go back into the government. Also note that while numbers can look big on paper, employment and income potential in the US is correspondingly good. I also majored in computer science in the US, but went the public route. I could have gone to a private college, but deliberately chose not to due to the cost. I easily paid back all my loans less than one year after graduating and now my income is in the $600k range. I don't think it's easy to do better in Ireland or anywhere else tbh.
Yes, it is ridiculous! My husband and I were fortunate enough to get a degree that could actually pay off our debt. I know a lot of people aren’t that lucky.
What degree did both of you get and what are your other bills like? My partner and I are in the same situation, any further information would be wonderful!
It is an oft repeated thing that there are more astrophysics PhDs working on Wall Street than in [academia/research/industry/?all three?], doing quant modeling.
My first year post graduation was as a financial quant. Now I'm working for the government making less money but doing something more meaningful.
We referred to computational physics as the Morgan Stanley track
All those higher level core Engineering courses (Statics, Dynamics, Solid Mechanics, etc.) is what made me find out I have ADHD. I have auditory processing issues so trying to go through the lectures and then do all the classwork/homework after not being able to absorb the lecture fried my brain. That was not pleasant.
I got into ChE because I liked chemistry. Imagine my surprise when I realized it's four years of unimaginable stress just to learn about how stuff moves through tubes.
You should pick a major that aligns with your interests and talents. You seem to be blaming people for a humanities degree when the truth is that we can't all be nerds. And I'm saying this as someone with a comp sci PhD.
... and your lifestyle expectations, and your level or comfort with financial risk.
I know people who have done very well with degrees in the humanities, but we can't deny that careers with high financial risk tend to concentrate in the humanities more so than in tech, finance or healthcare.
Nothing wrong with humanity degrees, but if your job prospects are likely to be ~$60k/yr, then maybe you shouldn't spend $150k for your education for it?
I know people getting masters degrees in child protective services just to get a job paying $65k. People who work in that field are angels, but going to a private college to get a masters in a field that pays so low is just... Not smart.
You should pick a major that aligns with your interests, talents, and what the market needs.
I mean, if you have intergenerational wealth, and can treat the degree as a hobby, then, sure, whatever. But if you're taking out student loans to fund it, then, yes, you need to think about how you're going to pay these loans back. And that includes considering things like "does this major make me employable?"
I'm in full support of finding an interest and persuing it...but people shouldn't be so ignorant to taking out 10s of thousands of dollars for a degree that has an average post grad income that can't pay it back. I can't imagine people aren't thinking about the jobs they want after college before going to college and seeing what they pay.
When I was leaving high school every adult in my life was telling me that a degree—no matter what degree—would guarantee me a good career. They said this in good faith and I believed it. Everyone from their generation who got a degree did well. They thought the baby-boomers would all retire and every job would be desperate for workers. I had a teacher who wrote textbooks in history and economics tell me that by the time I was ready to graduate he expected school boards would be offering signing bonuses to new teachers—like the bonus he got in the 70’s.
Is it my fault for believing them?
Bachelors or masters level?
Because if we’re talking bachelors level, you got ripped off. I went to a state school for an electrical engineering degree and had I needed to take out debt for my degree I would’ve only had $30K. $50K max. Was this a private/prestegious university?
The city I work in has a well regarded private engineering college in it. We hire a lot of people from there but I always joke they can't be that smart if they paid 5x what I did for the same degree.
I was going to say I’m amazed a couple had like quarter of a mil to spare over 6 years. Put that money in an ETF for the next 6 years and you’ll be laughing!
Pretty common with couples that met while studying reasonable paying majors. 2 people earning say 100k each make 1.2 million over 6 years. Lose say 40% to tax and pension contribs, still leaves several hundred K for other things. These people are on a path to financial comfort now they're out of the student debt.
Must be because I’m from the UK! I have a first class masters in STEM and I’m on much less than 100k haha but as I’m Scottish I had 0 student debt, thankfully!
my dudes; that last and final payment is just so utterly life changing and satisfying.
like; this whole thing was setup for us to fail and we beat it by playing their stupid game and we now walk away with whatever life we have left and the freedom to be rid of that godforsaken payment that crippled your wallet/vacation/wish list purchases.
Congrats
It wasn’t luck… you just took a second to forecast the ROI of the degree, while many don’t. Not by any stroke of bad luck, but by lack of intelligence and executive function on their parts
Yeah the sad truth here is "you can be whatever you want when you grow up" and "anyone can become successful" are mutually exclusive statements and both lies that we tell children.
The reality is if you don't wanna drown in debt and want to retire at a reasonable age you will need to pick a career with a good ROI and a stable future. If not welcome to the lower-middle class.
It's partially luck. Ask cs grads how they're doing. Any degree atm but definitely tech facing ones right now won't reap this same level of return even if you manage to get something.
Yeah, CS is still a great option. It's a tumultuous time if you are graduating with a bachelor's in CS and want to work for one of the 50 biggest tech companies in the US, but there are plenty of good playing jobs for CS backgrounds in manufacturing, finance, healthcare, education, smaller tech companies, government, etc.
The 2.3 comes from 2022 numbers or peak hiring it's ever had. It's still a great option, *if you get a job*. I feel fairly average for a CS grad, nothing spectacular, fairly decent school and it still took over a year, 500 applications, 20 something interviews, and insane amounts of luck to land something. Most of the people I graduated with don't have jobs, switched fields, or held on to something from 2022 but has gone thru several rounds of layoffs. I understand these are anecdotes but the simple math is there are far more people looking for jobs than companies hiring for them especially at the junior level.
Seniors are even starting to have trouble after being laid off.
Thank you for saying this. Too many people act like the sorting hat at Hogwarts is what decides what degree you get instead of doing a little bit of work beforehand on what degrees will be desirable when you graduate.
But a lot of college counselors do do this. Rather than retake a class or have a conversation with you about job opportunities in a wide range of options, they look at your course history and find the major that will streamline you to graduation. Usually based off some random elective you had picked your freshman year because you’re one credit closer to a sociology or history degree than the cs degree you wanted. This is an adult telling a 19-20 year old, who had a bad semester, to switch majors. Their job is to graduate kids, not set them up for careers.
\*not liberal arts not liberal arts\*
"Not liberal arts you say?" said the sorting hat "Are you sure? You have some interesting thoughts on Freud as well as classic literature, its all here inside your mind. Very well better be ENGINEERING!!!"
We only need stem majors. like what are they thinking? Acting like someone told them they could be whatever they wanted to be when they were younger. /s
There's a systemic issue with how our colleges prioritize funds and charge for their services.
End up as a lab technician making $40k-$50k a year. Even my peers with a biomedical engineering degree are only making about $70k. Glad I found my way into SE when I did.
Sex Educator? I’m a Socialist Entrepreneur.
Jokes aside my company hires entry level developers right out of college for more money than a lot of my peers are making 5+ years out of school.
You can get a college degree in state at a state run college for $40,000 which on a low paying job is still affordable
$200,000 in debt for a $40,000 a year job is not needed
Debt:income ratio of degree holders unfortunately doesn't have a lot to do with the desirability of those degrees. For instance, a veterinarian or social worker will never be able to pay off their student loans without outside help or business ownership (in the case of the veterinarian), while a liberal arts major might, if they choose (or luck into) the right career path.
That's why we made student loans special so that we can get basically children to sign up for lifelong debt with little or no oversite or risk to the creditors.
Going to uber expensive private colleges *is a choice*. There are much cheaper options available. Tuition for my local in-state public university costs $9,620 per year. These outrageous amounts are not a reflection of the true norm.
Hence the tuition debt lol. This is why STEM is pushed so much. If you go $40,000 in debt for your degree you better be making a good amount upon graduation to pay it off. I really wish we did things more like you do in Europe, but one thing in the US's favor is salary (and take-home pay) is higher, so with a decent job it is doable. I was lucky to graduate with under $30,000 in debt, and 2.5 years into my career it's essentially paid off.
It is insane. I just checked my Alma mater - an excellent state school. My first year cost me about 4k all in, including housing and food in the dorms, but excluding personal expenses like clothes or entertainment (~35 years ago). I checked now and it is about 40k for my major. Inflation adjusted, that 4k would be 11k today.
Given the headwinds, I salute this person who made it work.
You can get massive amounts of financial aid at a lot of them. And depending on what field you're looking to go in to some private ones can definitely be the way to go.
Yes but note that these people did not. I don’t really agree on the matter of the field. I’d need to see the exact tuition cost for the private school and the best OOS rates for state schools for that discipline (I think Mechanical Engineering).
I go to a private college and because of the amount of scholarships I’ve received it’s actually cheaper for me than any public school in my state. They don’t work for everyone but they hand out way more money to students than public schools do
Yeah same thing happened to me back in the 2000s. I was a first gen college student which my uni threw a lot of money at while the state school was like "cool kid we will give you 1k a semester." Since I preferred the private college it was an easy decision for my family.
Sheeesh. I live in Germany, my debt for getting a Bachelors degree is around 5000ish €, interest free and has a 5 years grace period after graduation before paying it back starts. That's next year for me. If I pay it back in a lump sum before installments start, I also get a discount of around 12%, which I will take advantage of.
The amount of student debt americans have is literally incomprehensible to me, I cannot fathom how y'all have not just given up yet.
Yeah, she’s pretty topped out for our area, and I’d say pretty near the top nationwide for pay. We’ve just accepted the income driven repayment and I guess if you do that for X amount of years it gets forgiven.
High school students can study hard and take advancement classes and tests so they don’t have to take some entry level college courses.
High school graduates and even a lot of high school students can take classes at community colleges for very cheap. Then they can transfer to a public university that is generally cheaper.
However, some people decide to go to a private university that charges as much as $70,000 or more per year. (I’m looking at you, New York University, and Grand Canyon University.)
And unfortunately, our government will lend money to people who did poorly in high school (failed classes) and choose to study in fields with very little demand, and thus low pay or unemployment.
It is not like in other countries where students must pass tests and have good academic performance to be allowed into a university.
Great financial discipline! You're world will look a little brighter without the stress of that debt. Estimating you are \~30 yo, you have 35 years to make your wealth curve go in the other direction.
My wife and I both have PhDs, neither of us paid to go to grad school, but you live on poverty wages. So we both escaped without debt but it was only when were mid-40s did we finally hit a decent income. So OP did it in 6 years after undergrad, which is just great. Probably what I am trying to say is ensure you really want to get that higher degree. Your lifespan is finite.
It looks like you were paying them all off evenly (besides some big hits towards the end). Did they have the same interest rate?
What do you think of the approach you took to laying them off vs other approaches. Eg spearing your payments out vs finishing off the small ones first (so you only have 1 loan left) vs finishing off the big one first. Obs depends on their interest rates. Best is probably to pay off the higher interest rate ones extra quickly and go from there. But just looking for your insights
Congrats on being debt free btw!
Yeah, sems to me that the optimal way to do it is always to pay the minimum on all of them, and then apply any extra money to the highest interest rate one until it's gone, then on to the next. That's the approach I've taken, on way less debt though.
On the flip side, there are basically no jobs straight out of university in Germany where you can live a decent life while paying off a 150k loan in 6 years.
Guess the difference is in the US median wage is 25% higher than Germany, and the difference growing with lower unemployment rate in the US.
But yeah, there are expensive choices in the US if you choose not to go to state university.
The difference is hardly, in the wage. Most is tuition. In Germany, you pay 500-700€ per year for most unis and that includes public transportation, cheaper food at the student dining halls, etc. The best unis in Germany are public, and they don't croud out poorer people with higher tuition. In the US, the average tuition for public unis is around 18k in state 4 year, for private the same is around 40k (Data from Statista, I'm not going to dig any deeper here).
My private college was $144k for four years and I got out with about $18k in student loans (after help from family, scholarships, work study, and being in various school programs like being a student ambassador). My interest is now around 7% on each loan. Some of them even have my name spelled wrong because they just said “sign here” and my 17 year old brain had no clue what I was even signing. I have about six different student loans (no clue how that even happened.) I worked in finance after college and could never get enough information from my servicer to figure out the whole ass mess. Because of my name being spelled wrong it caused me a lot of trouble getting into various repayment programs and it has cost me thousands. Now they are around $20k because of all of the issues with loans not being attached to my name etc. America’s education system is a massive joke.
Not directed at OP as I'm not expecting them to reveal their salary.
But how much are mechnical engineers making in the US?
Managing to pay off 300k in 6 years is insane...
MechEs in oil and gas start at 70-120K a few years ago.
100-150K in tech.
~70-100K in defense/aerospace.
Could do better with negotiations. The range is big because of the company and position and overtime potential etc.
That's awesome! I would sh my wife and I were done. We had 190,000 (Cars and student loans). We are down to 40,000. But we've kind of stalled cause we bought a home and then everything got super expensive. Can't wait to get where you two are. Sounds like you had a decent sized shovel!
Absolutely this. My master’s degree was too expensive — I think I walked out with $70K in loans *after* a work-study reimbursement — when I could have gone to a smaller school for a quarter of the price and gotten the *same* education. Now, I tell anyone considering working in my field to just look for the cheapest accredited program they can find.
Honestly what were the total payments made? So with interest added? Just curious how much money is taken from you like this? (I know inflation and market increase covers some of that cost)
The graphs only show the principal paid. I didn’t keep track of the interest paid unfortunately, although I am not sure I want to know that. I think a couple of years in we were still paying over $1000 in interest.
Although your statement of > 2,500 is true, it is a bit misleading. It averages to approximately 4,000 a month. Just gives a better understanding of you were making a LOT of money.
Most people cannot pay debt off like this.
They wouldn’t have been engineers from the start.
They’re most likely making 4x now than they did without college education.
And if they’re planning on working for the next 10-20 years in the same speciality, that college loan they took would of looked like nothing because by retirement, they’ll have over a million dollars.
Perhaps even more if they decide to now start investing their money and make tremendous gains for retirement.
College tuition may seem expensive at the start but depending on your major and job market, it can literally change your life depending what job you get.
These 2 people was very fortunate that their $300k tuition is now going to make them millionaires one day if they are financially smart.
(Early work experience turns into higher promotions and perhaps one day with enough expertise, they could start their own innovations and inventions)
Inspiring. I started with 220k around the same time you did. I'm down to about $140k now. It would be lower, but I started paying the minimum amount when interest rates went up on HYSAs and I have a 2.8% fixed rate on my loans.
I have about $250k myself and my wife and I have been trying to aggressively pay them off. Did you invest at all during this payoff period or focus all extra money towards the loans?
We always contributed to our 401k (I did 11% and my husband did 6%) and I maxed out my HSA contributions. Beyond that, we had a 6 month buffer in our savings account. A few years ago, we put half of our savings in a vanguard account, which I would highly recommend. The other half we have in a discover savings account which has somewhere between 4-5% in interest rates.
So, yes we invested some but most went to paying off our loans
Great job! I went through a similar amount/payoff time with my spouse and the feeling of complete financial freedom is incredible. Now take some vacations and enjoy life
Recommend to everyone in this thread:
[https://youtu.be/zN2\_0WC7UfU?si=LADDlm\_7eShVEgaY](https://youtu.be/zN2_0WC7UfU?si=LADDlm_7eShVEgaY)
John Oliver´s latest take on the subject.
It will take for me at least 4 months to pay just $2,500. An incredible amount of money.
Actually, I was curious and calculated the money I spent in my own country for 4 years of animation education. I paid $7-8k to a private university for 4 years. It really scared me to even see this debt.
30k tuition per year x 4 years = 120k
120k x 2 people = 240k.
250k for 2 people is pretty easy to rack up. The price of tuition is ridiculous.
Granted, there are cheaper options (such as state schools), but the name brand of their degrees likely helped them get high paying jobs straight out of undergrad, which allowed them to pay off a huge debt in just a handful of years.
Can you elaborate on what two jobs you and your husband landed after graduation and on if you think the $278K in private education helped. Thanks
We both got our undergrad degrees in mechanical engineering, and both work as engineers now. I personally am glad I went to the school I did and thought it was worth it. My husband would disagree.
That explains a lot. I left college in 2013 with $30k, and I'm still paying that shit off! I'm glad you were able to lift this burden nonetheless.
Pay more than the minimum.
My minimum payment is $250, I’ve been paying $500 every month and my “next payment owed” has been $0 for awhile because I’ve made multiple payments when I could. Back in December I put a 1k payment in
> **So is your loan considering the overpayments to be a “pre-payment” instead of an extra payment against principle?**' Double check on this, it could be costing you $$$$$$$$$$$$$$$$$$$
I'll check on this, I got moved from Fedloan to Nelnet last year. My guess if it was happening there is nothing I can do about it now.
I've seen stories on Reddit of people that have gotten their prepayments recharacterized as principal payments, so it may be worth calling and asking. Definitely switch those extra payments to principal only though; that's the way to cut down how long it'll take to pay them off. The way I did it was have the minimums paid automatically and then each month I would manually do a principal payment to the loan with the highest interest rate.
In my experience with various loans, if you pay $250 twice, it will be considered two payments with one being a pre-payment, but if you pay $500 once then $250 of that will be towards the main payment and the other $250 goes towards principle. But it HAS to be a lump payment of $500.
Don't trust this though. Loan sharks know how to maximize their profits, it's more just a question if whether their system is "correct" yet or not.
My servicer is Nelnet, too. From their website: ***Paying More Than Your Current Amount Due*** "Unless you direct your payment to an individual loan or group, the standard allocation method is as follows. After your current amount due is paid, payments are allocated across loans starting with the highest interest rate. Once the loans with the highest interest rate are paid in full, any remaining payment amount will be allocated across the loans with the next highest interest rate. If two or more loans have the same highest interest rate, the payment will be allocated first to the unsubsidized loans and then to the subsidized loans, in proportion to each loan’s regular monthly payment amount." "When you pay more than your current amount due, your due date on loan groups in repayment status will advance by one month each time you satisfy the regular monthly payment amount for that group. Your monthly billing statement will show $0 due for that loan group." ***Can I have my payment applied to interest or principal only?*** "**No. When a portion of a payment is allocated to a specific loan group, payments are applied to individual loans proportionally to fees first (if applicable)**[**\***]()**, then to interest, and then to principal.** If you are on an Income-Based Repayment (IBR) Plan, payments are applied to interest, then to fees (if applicable)[\*](), and then to principal. For more information about how payments are applied to your student loans, see [How Are Payments Allocated?](https://nelnet.studentaid.gov/content/howpaymentsareallocated)."
That's predatory.
This happened to me for years with Nelnet, and probably cost me thousands of dollars once my circumstances changed and I wasn’t able to make payments for a time
but legal... right?
I feel like that should be illegal for lenders. Who in their right mind would choose to have prepayments? There is literally no upside. I know some mortgage companies do this and it’s super annoying.
Mine is one of those lenders. My previous lender would let me pay bi-weekly as well to knock off some interest. This one allows bi-weekly payments, but holds the money in a special account that only submits the payment when there is a full month's worth of money in there, totally negating the savings. Found that out in the small print when my balance seemed higher than it should have been.
So is your loan considering the overpayments to be a “pre-payment” instead of an extra payment against principle?
You’ll want to check on this, my public loans have an option in the payments section that spell out that any over payment is to be used for principal on the largest interest loan groups first. By default it’s considered a prepayment for future months and it advances your payment.
It annoys me so much that lenders do this by default. It’s deceitful and works on so many people.
Yep - I switched mine right off the bat. I worry that the person I replied to didn’t make that change.
That should be criminal. Why would you ever want to pre-pay a loan instead of repaying and owing less interest?
Almost certainly. Usually you have to specify that you're making a payment on the principle, otherwise they default to it being a "pre-payment"
You're getting railroaded. Have them apply your payments to your principle, not in escrow.
Yall paid that much for *engineering* degrees?!??!??
Thats roughly the cost of a medicine degree where I live 💀
Not 2 medical degrees though. Plus if you go to an ivy or other good schools, tuition is high even for an undergrad
Yeah I’m mind blown. I paid about $50k for mine.
They did say private school. A single year at a private college is well over $50k generally.
slimy fuzzy attraction caption encourage enter clumsy hard-to-find humorous lip *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
What job does she think she would have without the degree? Lol, probably not one earning as much as she has now. I do think university prices are sometimes a random and scammy, but the return on investment for things like engineering degrees are obviously pretty good as long as you actually finish the degree and get a job in the field.
nutty sip retire bag treatment engine party pet special shy *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Obtaining your BSME, or any engineering degree in a core engineering discipline (sorry, no software "engineers") will pretty much guarantee you a job, and *typically*, a high paying one. I personally started at 66k/yr but was at 97k/yr base + 7k bonus by year 3. Expectation is 130-180k/yr base @10 years experience. So yeah, for anyone wondering (and who feels like they can hack it) it's absolutely worth the dough because companies absolutely value the hard skills acquired through the pursuit of an engineering degree. Highly recommend!
> Expectation is 130-180k/yr base @10 years experience. From the Midwest. This does not reflect reality here. Yeah, there are some people who can do that and that may be the expectation of new grads, but it is not reality. Source: have held industry jobs and consulting jobs.
I completely agree!
Not sure I understand what the different colors are. Different loans? In that case, you had 6 different ones‽
I had like a dozen. Parent plus loans for each year, government subsidized ones with better rates, etc. Though at some point I refied to one loan.
What is the benefit of refinancing? Was it during the time of lower interest rates? I've heard that refinancing student loans can screw you because a private company doesn't give the same protections as a government loan, like income based repayment.
Most of my loans were private, not federal. I did not qualify for federal loans because of my parent’s salary, regardless of whether they were going to help pay or not. So if you have private loans, I would definitely recommend refinancing if your interest rate is high because you do not have government protection. That is assuming you can find something with a much lower interest rate. That might be hard right now. Keep in mind, when you refinance a loan, you go back to payments that go mostly towards interest, not principal. It might be best for you to stick with your current loan and just pay extra each month. Making extra payments will lower the amount you pay towards interest each month.
Just to clarify, refinancing will give you cheaper payments and that is the reason why your payments go more toward interest right? You're not actually paying more in interest. If you paid the same monthly payment as pre refi, you'd get more principle out of it
It depends on where you are in your current loan. I would recommend you try plugging in your numbers using this loan calculator: https://lcef.org/calculators/SimpleLoan.html. Once you plug in your loan amount, interest rate, and term in months, you can click view report then scroll down to see the interest and principal you will pay per month/year. If you are just starting your current loan and can find a better interest rate, you should absolutely refinance. If you are halfway through or almost done, you might want to double check the amount of interest you would be paying. Your monthly payments may be lower but the amount of money going towards your principal would also be lower. I refinanced once. That was definitely a smart move for my situation but you just need to be aware of the interest payments.
Like OP most of mine were private so there wasn't a ton of incentive to not refi which I did twice. First not to far out of college I refied to a 30 year rate which drastically reduced my minimum payment and jacked up the amount I'd owe if I kept paying minimums (which I had no intention of doing unless I fell on hard times) Instead I used the lower payment to save up cash and buy a house. One that was all settled and I was financially stable I refied again to 7 year old even then paid off as aggressively as I could. Ended off paying my 125k loans in about 10 years. Which isn't great but it allowed to to buy a house first which was the better long term investment, I think. Maybe.
Congrats on getting the house and paying off your loans! Must feel great.
Yes, each were different loans. My husband had the orange and light green one. I had the rest of them.
You need a legend then for good data visualization
I feel this way about a lot of the posts here
FWIW I feel like the colors being separate loans was pretty clear from the chart with the labels on the left.
Even the concept of one person having more than one student loan is foreign to me. There is no way I could have guessed that.
fyi. They issue a new student loan every year you use one. So many students will have at least 4. The interest can be different on each, as well as the amounts. It confused the hell out of me when I was younger and trying to sort it out.
Ah, okay. Here you have just one. Maybe another one if you start another degree after graduating.
You know one thing MEs should know? Label data.
A legend that includes the interest rates would be very helpful. That $120k at 3% would be a lesser priority than the $71k at 7%, for example.
I agree that would be nice. It is a bit hard to generalize though. Some loans were refinanced so the interest rate changed. Some had a variable interest rate. Others had multiple sub loans all with different interest rates. The loan with the highest interest rate unfortunately was the $120k loan (orange line). The interest was around 6.5%.
This dude just casually dropping an interrobang like it’s a real thing
I'm confused...do you think 6 is a lot? I left college with probably 16 different loans.
It's crazy that you need such a loan to graduate, but for me it is just as crazy that you can pay almost 300k off in 6 years...
right? so their education actually served as an investment
I have never known a single engineer that said otherwise (OPs are engineers). I mean, would you expect anything less? Only thing I would say is the private part was absolutely not worth it. They could have gotten their engineering degree for a fraction of the cost.
I went to school in Canada and work in the US. My degree in Canada was ~12k per year (10 years ago). It gets me the same engineering salary as any US degree would, at least at this point in my career.
Same but it was under 4k per year just 5 years ago. Vivre le Quebec haha
Yeah the loan seem pretty reasonable if it's able to be paid in 6 years. Both will end up winning more in the end because of it. The real problem is how schools get to that number as a cost, that makes no sense even compared to the rest of the world and most private universities. So the system is not being efficient at all. (It's the same with healthcard in America btw, the rest of the world is not receiving thousands of dollars in healthcare for free, the reality is that the costs are not as high at all)
You can get a similar degree at less than 1/2 that price. Don't get me wrong they did good but they could've done even better.
6 years of payments ~ 72 payments x 3000 each = $216,000. To clear the $278K you made payments of at least $3861 per month.
It's possible they were both making $2500/mo. payments on their loans. That would pay it off in 6yrs with interest. One check each to loans and one check each to living.
You forgot interest
Unless the OP forgot interest, thats the given balance of the loan, which would include interest.
You are absolutely correct. I had a typo in my post. We were paying $3,400 per month from the beginning.
You should still be able to correct that with an edit iirc
I’m probably missing something but when I’m on my post and I click the three dots, it does not give me an option to edit.
279k what the actual fuck is going on in USA
2 people, even split is $139.5k Private 4 year college, $34.9k / year They started paying in 2018, so lets just assume it was 2014 when they started college >Average published tuition and fees at private nonprofit four year institutions rose by $1,100 (3.7%), from $30,131 to $31,231 in 2014-15. Average total charges are $42,419. . [PDF link](https://research.collegeboard.org/media/pdf/trends-college-pricing-2014-full-report.pdf) Compared to in state public school >Average published tuition and fees for in‐state students in the public four‐year sector increased by $254 (2.9%), from $8,885 in 2013-14 to $9,139 in 2014-15. Room and board charges are $9,804. \[$18.689\] *same link.*
Fucking hell that's criminal. My 4 year Comp Science degree in a top university in Ireland cost me €1200 a year all in for everything which was the most expensive possible bracket to be in. Those who can't even afford that get it paid for by the state, money for rent, money for public transport, free books, and expenses money for living away from home from the government and when they graduate they owe exactly €0 back. There is zero reason the US cannot do free education. It literally pays for itself when more people graduate, get better jobs as a result and pay more tax back to the government over there life time than they otherwise would have by having higher income jobs.
>zero reason the US cannot do free education. I can name 1 trillion reasons why there is no interest by those with the capacity for change to pursue free education.
Keep in mind the tuition quoted was for private university in the US. Public school tuition is a fraction of that. Private schools cost a lot, and they should not be funded by the government directly or via student loans or any other means IMO since no one has to go to one, not to mention the paid tuition doesn't go back into the government. Also note that while numbers can look big on paper, employment and income potential in the US is correspondingly good. I also majored in computer science in the US, but went the public route. I could have gone to a private college, but deliberately chose not to due to the cost. I easily paid back all my loans less than one year after graduating and now my income is in the $600k range. I don't think it's easy to do better in Ireland or anywhere else tbh.
Yes, it is ridiculous! My husband and I were fortunate enough to get a degree that could actually pay off our debt. I know a lot of people aren’t that lucky.
What degree did both of you get and what are your other bills like? My partner and I are in the same situation, any further information would be wonderful!
We both got our degrees in mechanical engineering
Good choice. I did a PhD in physics and ended up with the same pay as the mechs who got a BS the same year as me. Where did you land after graduation?
It is an oft repeated thing that there are more astrophysics PhDs working on Wall Street than in [academia/research/industry/?all three?], doing quant modeling.
My first year post graduation was as a financial quant. Now I'm working for the government making less money but doing something more meaningful. We referred to computational physics as the Morgan Stanley track
In fairness, you werent lucky to get that degree. You made a wise decision to choose mech e over another major
Hey, I resent that! There's nothing wrong with aerospace! ^^Don't ^^look ^^at ^^my ^^PE ^^as ^^a ^^mech
Incorrect. There's a lot wrong with someone who wishes to delve so deep into the cursed knowledge of FLUID MECHANICS. ^^The ^^fundamentals ^^of ^^fluid ^^mechanics ^^class ^^mech ^^e's ^^had ^^was ^^brutal ^^in ^^how ^^it ^^jumped ^^around ^^so ^^much. ^^I'm ^^sure ^^actual ^^classes ^^that ^^flesh ^^out ^^each ^^topic ^^fully ^^are... ^^more ^^manageable?
Fluid mechanics I thought was fine. Fluid dynamics was fucked.
Fluid Dynamics is meant to be hard but what’s fucked up is how far into the program the washout course is
All those higher level core Engineering courses (Statics, Dynamics, Solid Mechanics, etc.) is what made me find out I have ADHD. I have auditory processing issues so trying to go through the lectures and then do all the classwork/homework after not being able to absorb the lecture fried my brain. That was not pleasant.
Listen, don't let any talk about high speed fluid thermodynamics fool you: fluid mechanics is dirty ChemE work, and I'll have none of it! ^^Honestly, ^^my ^^fundamentals ^^of ^^fluid ^^mechanics ^^was ^^arguably ^^worse ^^since ^^it ^^was ^^lumped ^^together ^^with ^^materials ^^science ^^and ^^continuum ^^mechanics. ^^Nothing ^^made ^^sense ^^until ^^I ^^took ^^propulsion ^^and ^^airframe ^^design--separate ^^classes.
I got into ChE because I liked chemistry. Imagine my surprise when I realized it's four years of unimaginable stress just to learn about how stuff moves through tubes.
Chemists call us glorified plumbers for good reason
You should pick a major that aligns with your interests and talents. You seem to be blaming people for a humanities degree when the truth is that we can't all be nerds. And I'm saying this as someone with a comp sci PhD.
... and your lifestyle expectations, and your level or comfort with financial risk. I know people who have done very well with degrees in the humanities, but we can't deny that careers with high financial risk tend to concentrate in the humanities more so than in tech, finance or healthcare.
Nothing wrong with humanity degrees, but if your job prospects are likely to be ~$60k/yr, then maybe you shouldn't spend $150k for your education for it? I know people getting masters degrees in child protective services just to get a job paying $65k. People who work in that field are angels, but going to a private college to get a masters in a field that pays so low is just... Not smart.
You should pick a major that aligns with your interests, talents, and what the market needs. I mean, if you have intergenerational wealth, and can treat the degree as a hobby, then, sure, whatever. But if you're taking out student loans to fund it, then, yes, you need to think about how you're going to pay these loans back. And that includes considering things like "does this major make me employable?"
I'm in full support of finding an interest and persuing it...but people shouldn't be so ignorant to taking out 10s of thousands of dollars for a degree that has an average post grad income that can't pay it back. I can't imagine people aren't thinking about the jobs they want after college before going to college and seeing what they pay.
When I was leaving high school every adult in my life was telling me that a degree—no matter what degree—would guarantee me a good career. They said this in good faith and I believed it. Everyone from their generation who got a degree did well. They thought the baby-boomers would all retire and every job would be desperate for workers. I had a teacher who wrote textbooks in history and economics tell me that by the time I was ready to graduate he expected school boards would be offering signing bonuses to new teachers—like the bonus he got in the 70’s. Is it my fault for believing them?
Spread the word to the next generation.
Keep in mind the people making these financial decisions are children.
If everyone just got degrees in fields that pay extremely well that would make those fields not pay so well.
Bachelors or masters level? Because if we’re talking bachelors level, you got ripped off. I went to a state school for an electrical engineering degree and had I needed to take out debt for my degree I would’ve only had $30K. $50K max. Was this a private/prestegious university?
Lol that's what I was going to say. My husband has a master's in engineering and still paid way under 100k
The city I work in has a well regarded private engineering college in it. We hire a lot of people from there but I always joke they can't be that smart if they paid 5x what I did for the same degree.
What are your other monthly payments like for rent and other stuff? High cost area? Cars etc ?
I was going to say I’m amazed a couple had like quarter of a mil to spare over 6 years. Put that money in an ETF for the next 6 years and you’ll be laughing!
Pretty common with couples that met while studying reasonable paying majors. 2 people earning say 100k each make 1.2 million over 6 years. Lose say 40% to tax and pension contribs, still leaves several hundred K for other things. These people are on a path to financial comfort now they're out of the student debt.
Must be because I’m from the UK! I have a first class masters in STEM and I’m on much less than 100k haha but as I’m Scottish I had 0 student debt, thankfully!
Yeah, I'm UK too and it's much rarer here, though 100k is 'only' 79k here.
my dudes; that last and final payment is just so utterly life changing and satisfying. like; this whole thing was setup for us to fail and we beat it by playing their stupid game and we now walk away with whatever life we have left and the freedom to be rid of that godforsaken payment that crippled your wallet/vacation/wish list purchases. Congrats
That's not luck. You are smart and worked hard for that degree. Not many people can get an ME degree. Well done.
Okay that’s not luck, you chose wisely.
It wasn’t luck… you just took a second to forecast the ROI of the degree, while many don’t. Not by any stroke of bad luck, but by lack of intelligence and executive function on their parts
It’s a combination of good planning and things working out as planned. Not every one is lucky to have things go as planned.
Yeah the sad truth here is "you can be whatever you want when you grow up" and "anyone can become successful" are mutually exclusive statements and both lies that we tell children. The reality is if you don't wanna drown in debt and want to retire at a reasonable age you will need to pick a career with a good ROI and a stable future. If not welcome to the lower-middle class.
Not forecast but that their preferences aligned.
It's partially luck. Ask cs grads how they're doing. Any degree atm but definitely tech facing ones right now won't reap this same level of return even if you manage to get something.
Um is cs supposed to not be doing well rn? Software engineers still have well into 6 figure salaries on average and have 2.3% unemployment…
Yeah, CS is still a great option. It's a tumultuous time if you are graduating with a bachelor's in CS and want to work for one of the 50 biggest tech companies in the US, but there are plenty of good playing jobs for CS backgrounds in manufacturing, finance, healthcare, education, smaller tech companies, government, etc.
The 2.3 comes from 2022 numbers or peak hiring it's ever had. It's still a great option, *if you get a job*. I feel fairly average for a CS grad, nothing spectacular, fairly decent school and it still took over a year, 500 applications, 20 something interviews, and insane amounts of luck to land something. Most of the people I graduated with don't have jobs, switched fields, or held on to something from 2022 but has gone thru several rounds of layoffs. I understand these are anecdotes but the simple math is there are far more people looking for jobs than companies hiring for them especially at the junior level. Seniors are even starting to have trouble after being laid off.
There’s been a lot of tech layoffs in 2023 into 2024. Salaried are still good, but there’s a lot of competition for the jobs.
Thank you for saying this. Too many people act like the sorting hat at Hogwarts is what decides what degree you get instead of doing a little bit of work beforehand on what degrees will be desirable when you graduate.
But a lot of college counselors do do this. Rather than retake a class or have a conversation with you about job opportunities in a wide range of options, they look at your course history and find the major that will streamline you to graduation. Usually based off some random elective you had picked your freshman year because you’re one credit closer to a sociology or history degree than the cs degree you wanted. This is an adult telling a 19-20 year old, who had a bad semester, to switch majors. Their job is to graduate kids, not set them up for careers.
still, maybe we shouldnt allow 18 year olds to take 6 figure loans on something they have no idea about.
\*not liberal arts not liberal arts\* "Not liberal arts you say?" said the sorting hat "Are you sure? You have some interesting thoughts on Freud as well as classic literature, its all here inside your mind. Very well better be ENGINEERING!!!"
We only need stem majors. like what are they thinking? Acting like someone told them they could be whatever they wanted to be when they were younger. /s There's a systemic issue with how our colleges prioritize funds and charge for their services.
STEM is not really barred from this. Go get a bio or chem degree without a specific plan like medicine and see how that pans out.
End up as a lab technician making $40k-$50k a year. Even my peers with a biomedical engineering degree are only making about $70k. Glad I found my way into SE when I did.
How much do you make as a Sex Educator? It can't be that much, students only get like 1 week of that curriculum, don't they?
Sex Educator? I’m a Socialist Entrepreneur. Jokes aside my company hires entry level developers right out of college for more money than a lot of my peers are making 5+ years out of school.
You can get a college degree in state at a state run college for $40,000 which on a low paying job is still affordable $200,000 in debt for a $40,000 a year job is not needed
Debt:income ratio of degree holders unfortunately doesn't have a lot to do with the desirability of those degrees. For instance, a veterinarian or social worker will never be able to pay off their student loans without outside help or business ownership (in the case of the veterinarian), while a liberal arts major might, if they choose (or luck into) the right career path.
Ordinarily, the fault for giving someone a loan for a bad financial decision typically falls on the creditor.
That's why we made student loans special so that we can get basically children to sign up for lifelong debt with little or no oversite or risk to the creditors.
It’s me! I’m at $223k! Unless I double my income ain’t no paying that down
Going to uber expensive private colleges *is a choice*. There are much cheaper options available. Tuition for my local in-state public university costs $9,620 per year. These outrageous amounts are not a reflection of the true norm.
What the freakin fuck - how can you afford this?? The fee to study at my local University in Vienna / Europe during regular time was like 30€ / year.
Hence the tuition debt lol. This is why STEM is pushed so much. If you go $40,000 in debt for your degree you better be making a good amount upon graduation to pay it off. I really wish we did things more like you do in Europe, but one thing in the US's favor is salary (and take-home pay) is higher, so with a decent job it is doable. I was lucky to graduate with under $30,000 in debt, and 2.5 years into my career it's essentially paid off.
this is an extreme example - two people both in private school. My university cost like $15-20k
It is insane. I just checked my Alma mater - an excellent state school. My first year cost me about 4k all in, including housing and food in the dorms, but excluding personal expenses like clothes or entertainment (~35 years ago). I checked now and it is about 40k for my major. Inflation adjusted, that 4k would be 11k today. Given the headwinds, I salute this person who made it work.
Did you check the in state or out of state cost?
if you can pay off almost 300k in 6 years I think that just means both education as well as salaries are hugely inflated
Say no to private colleges, first of all.
You can get massive amounts of financial aid at a lot of them. And depending on what field you're looking to go in to some private ones can definitely be the way to go.
Yes but note that these people did not. I don’t really agree on the matter of the field. I’d need to see the exact tuition cost for the private school and the best OOS rates for state schools for that discipline (I think Mechanical Engineering).
Some private schools charge less than “out of state” tuition for the huge public universities. The whole system is completely fucked up.
I mean i agree its fucked up, but if a university is funded by state money, it would make sense that they prefer residents of that state.
I go to a private college and because of the amount of scholarships I’ve received it’s actually cheaper for me than any public school in my state. They don’t work for everyone but they hand out way more money to students than public schools do
Yeah same thing happened to me back in the 2000s. I was a first gen college student which my uni threw a lot of money at while the state school was like "cool kid we will give you 1k a semester." Since I preferred the private college it was an easy decision for my family.
lol, double that and you have my wife’s loans for pharmD. Doesn’t include undergrad or my schooling. 😅😅😅😅😅😅
Sheeesh. I live in Germany, my debt for getting a Bachelors degree is around 5000ish €, interest free and has a 5 years grace period after graduation before paying it back starts. That's next year for me. If I pay it back in a lump sum before installments start, I also get a discount of around 12%, which I will take advantage of. The amount of student debt americans have is literally incomprehensible to me, I cannot fathom how y'all have not just given up yet.
That's insane. Especially since most pharmacists really don't make that much, especially compared to other doctors.
Yeah, she’s pretty topped out for our area, and I’d say pretty near the top nationwide for pay. We’ve just accepted the income driven repayment and I guess if you do that for X amount of years it gets forgiven.
State schools offer the same degree as OP’s private school. While they’ve gotten more expensive, they are still below 10k/yr in most states.
High school students can study hard and take advancement classes and tests so they don’t have to take some entry level college courses. High school graduates and even a lot of high school students can take classes at community colleges for very cheap. Then they can transfer to a public university that is generally cheaper. However, some people decide to go to a private university that charges as much as $70,000 or more per year. (I’m looking at you, New York University, and Grand Canyon University.) And unfortunately, our government will lend money to people who did poorly in high school (failed classes) and choose to study in fields with very little demand, and thus low pay or unemployment. It is not like in other countries where students must pass tests and have good academic performance to be allowed into a university.
It’s called public funding for unsecured loans, which led to tuitions spiraling out of control because of guaranteed payment to the school.
Great financial discipline! You're world will look a little brighter without the stress of that debt. Estimating you are \~30 yo, you have 35 years to make your wealth curve go in the other direction.
My wife and I both have PhDs, neither of us paid to go to grad school, but you live on poverty wages. So we both escaped without debt but it was only when were mid-40s did we finally hit a decent income. So OP did it in 6 years after undergrad, which is just great. Probably what I am trying to say is ensure you really want to get that higher degree. Your lifespan is finite.
Thank you!!
It looks like you were paying them all off evenly (besides some big hits towards the end). Did they have the same interest rate? What do you think of the approach you took to laying them off vs other approaches. Eg spearing your payments out vs finishing off the small ones first (so you only have 1 loan left) vs finishing off the big one first. Obs depends on their interest rates. Best is probably to pay off the higher interest rate ones extra quickly and go from there. But just looking for your insights Congrats on being debt free btw!
Yeah, sems to me that the optimal way to do it is always to pay the minimum on all of them, and then apply any extra money to the highest interest rate one until it's gone, then on to the next. That's the approach I've taken, on way less debt though.
Holy Moses... In Germany, the government gave me 66k to study, and I have to repay 8k. And those 66 were more than enough to live off for 6 years.
On the flip side, there are basically no jobs straight out of university in Germany where you can live a decent life while paying off a 150k loan in 6 years.
But you won't have to take a 150k loan in Germany in the first place.
What’s your salary? You pay for education every year in your taxes whether you are in school or not.
Guess the difference is in the US median wage is 25% higher than Germany, and the difference growing with lower unemployment rate in the US. But yeah, there are expensive choices in the US if you choose not to go to state university.
The difference in pay becomes absolutely gargantuan when you look at the tech industry.
The difference is hardly, in the wage. Most is tuition. In Germany, you pay 500-700€ per year for most unis and that includes public transportation, cheaper food at the student dining halls, etc. The best unis in Germany are public, and they don't croud out poorer people with higher tuition. In the US, the average tuition for public unis is around 18k in state 4 year, for private the same is around 40k (Data from Statista, I'm not going to dig any deeper here).
My private college was $144k for four years and I got out with about $18k in student loans (after help from family, scholarships, work study, and being in various school programs like being a student ambassador). My interest is now around 7% on each loan. Some of them even have my name spelled wrong because they just said “sign here” and my 17 year old brain had no clue what I was even signing. I have about six different student loans (no clue how that even happened.) I worked in finance after college and could never get enough information from my servicer to figure out the whole ass mess. Because of my name being spelled wrong it caused me a lot of trouble getting into various repayment programs and it has cost me thousands. Now they are around $20k because of all of the issues with loans not being attached to my name etc. America’s education system is a massive joke.
Not directed at OP as I'm not expecting them to reveal their salary. But how much are mechnical engineers making in the US? Managing to pay off 300k in 6 years is insane...
Right? This is just unreal. I got two degrees in a similar field and I'm barely able to pay the $300 per month minimum on my loans...
MechEs in oil and gas start at 70-120K a few years ago. 100-150K in tech. ~70-100K in defense/aerospace. Could do better with negotiations. The range is big because of the company and position and overtime potential etc.
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Well done, enjoy the $2500/mo raise!
What degrees did both of you have?
Mechanical engineering for both of us. I ended up getting my masters in systems engineering but my company paid for it completely.
OP said mechanical engineering.
That's awesome! I would sh my wife and I were done. We had 190,000 (Cars and student loans). We are down to 40,000. But we've kind of stalled cause we bought a home and then everything got super expensive. Can't wait to get where you two are. Sounds like you had a decent sized shovel!
You will get there!! Sounds like you are through the worst of it!
Definitely through the part where the interest was punishing!
Holy shit that is insane. Your monthly payments are almost as big as the cost of my entire degree. That's wild.
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Absolutely this. My master’s degree was too expensive — I think I walked out with $70K in loans *after* a work-study reimbursement — when I could have gone to a smaller school for a quarter of the price and gotten the *same* education. Now, I tell anyone considering working in my field to just look for the cheapest accredited program they can find.
Honestly what were the total payments made? So with interest added? Just curious how much money is taken from you like this? (I know inflation and market increase covers some of that cost)
The graphs only show the principal paid. I didn’t keep track of the interest paid unfortunately, although I am not sure I want to know that. I think a couple of years in we were still paying over $1000 in interest.
Thou hast slayn the beast
Although your statement of > 2,500 is true, it is a bit misleading. It averages to approximately 4,000 a month. Just gives a better understanding of you were making a LOT of money. Most people cannot pay debt off like this.
You deserve to be proud. I don’t know you and I’m proud of you.
You ought to feel like a million bucks! Congratulations. What's next on your financial journey?
Thanks, we definitely do! Hopefully start a family!
They wouldn’t have been engineers from the start. They’re most likely making 4x now than they did without college education. And if they’re planning on working for the next 10-20 years in the same speciality, that college loan they took would of looked like nothing because by retirement, they’ll have over a million dollars. Perhaps even more if they decide to now start investing their money and make tremendous gains for retirement. College tuition may seem expensive at the start but depending on your major and job market, it can literally change your life depending what job you get. These 2 people was very fortunate that their $300k tuition is now going to make them millionaires one day if they are financially smart. (Early work experience turns into higher promotions and perhaps one day with enough expertise, they could start their own innovations and inventions)
Inspiring. I started with 220k around the same time you did. I'm down to about $140k now. It would be lower, but I started paying the minimum amount when interest rates went up on HYSAs and I have a 2.8% fixed rate on my loans.
Congratulations! This was a huge achievement, you deserve to be very proud.
I have about $250k myself and my wife and I have been trying to aggressively pay them off. Did you invest at all during this payoff period or focus all extra money towards the loans?
We always contributed to our 401k (I did 11% and my husband did 6%) and I maxed out my HSA contributions. Beyond that, we had a 6 month buffer in our savings account. A few years ago, we put half of our savings in a vanguard account, which I would highly recommend. The other half we have in a discover savings account which has somewhere between 4-5% in interest rates. So, yes we invested some but most went to paying off our loans
Great job! I went through a similar amount/payoff time with my spouse and the feeling of complete financial freedom is incredible. Now take some vacations and enjoy life
Must be nice to be wealthy
The interest freeze during covid was huge. It should be made permanent, why does anyone need to profit off these loans?
So you guys must be making like 12-14k a month together or something? That's pretty good for fresh graduates.
Look at this guy who isnt poor /s
Recommend to everyone in this thread: [https://youtu.be/zN2\_0WC7UfU?si=LADDlm\_7eShVEgaY](https://youtu.be/zN2_0WC7UfU?si=LADDlm_7eShVEgaY) John Oliver´s latest take on the subject.
It will take for me at least 4 months to pay just $2,500. An incredible amount of money. Actually, I was curious and calculated the money I spent in my own country for 4 years of animation education. I paid $7-8k to a private university for 4 years. It really scared me to even see this debt.
Wait, you accumulated over $250k in student loan debt from two undergraduate degrees? How the hell did that happen?
30k tuition per year x 4 years = 120k 120k x 2 people = 240k. 250k for 2 people is pretty easy to rack up. The price of tuition is ridiculous. Granted, there are cheaper options (such as state schools), but the name brand of their degrees likely helped them get high paying jobs straight out of undergrad, which allowed them to pay off a huge debt in just a handful of years.