Student Loan Planning
Helping individuals and families with over $100,000 in student loans build a gameplan for reducing debt and managing cash flow
After graduating with an advanced degree, I've accumulated a large amount of debt. I have a healthy household income, but I'm not sure if I have the correct paydown strategy towards my student loans, and how the payment strategy can impact saving for a home purchase or for retirement.
Student Loan Planning
Rachel and Nick
AGES: 31 AND 30
Main Goals
Rachel and Nick married earlier this summer. Despite the joys of starting their new life together, they worry about their student loans, for which they each have over $100,000 of debt. Currently renting in downtown Boston, they envision moving out to the suburbs to buy in the next 3 years. In addition, they’d like to plan for a family within the next two years. Rachel and Nick want to know that they can do all these things in the short term while not compromising their lifestyle and future goals.
Background
Rachel graduated law school this spring, and after passing the bar, obtained a fast-paced role as an attorney at a private law firm. Nick graduated with his masters in public health 4 years ago and has spent the time since as a health official for a local city. Rachel and Nick have a healthy combined income of $250,000, but struggle to think about contributing to retirement vs paying down their loans or saving for a home down payment.
How we helped:
- Break down their loans – Help Rachel and Nick understand their loan types and the repayment plans that would be available for each of their loans.
- Explore forgiveness strategies – Explore whether Public Service Loan Forgiveness (PSLF) strategies would be ideal for Nick given his role in a government entity.
- Creating a payment plan – Identify which loans to target additional cash flow towards first. Review how different strategies impact their long-term financial plan.
- Review filing status – Post marriage, review whether filing taxes separately vs jointly would optimize their finances alongside their loan repayment strategies.
- Analyze employee benefits – Review each of their employee benefits to maximize tax efficiency and minimize payments for loans eligible for forgiveness.
- Home purchase planning – Coordinate their student loan plan with their ideas to purchase a home in 2-4 years.
- Investment planning – Coordinate their student loan strategies with retirement saving strategies. Create a holistic investment strategy for their household.
We partnered with them to provide Rachel and Nick with a plan regarding their loans and their financial future.
Interested in learning more about our student loan planning process? Click here to schedule a time to discuss your situation.
Disclaimer - This case study is provided for illustrative purposes only and is hypothetical in nature. It is provided to help you better understand the kinds of situations we commonly encounter and how we approach them. An individual’s experience will vary based on his or her individual circumstances.
What's Keeping You up at night?
Am I on the right repayment strategy?
There are large numbers at stake and a number of available repayment options. What makes the most sense for me?
How does my repayment strategy impact my long-term plans?
When looking at repayment options, what's best for me today might not be best down the road. How can I make the best long-term decision surrounding my loans?
How can I stay on track with my other financial goals with a large student loan balance?
I feel like my large student loan balance may weigh on me for years to come. How can I think about saving for a home purchase or retirement with the financial weight of these loans?
We Can Help Answer These Questions And More!