Question: Has this group discussed student loans yet? I am currently carrying about $38,000, and am interested in ways to pay it back as frugally as possible.

I have heard that through the direct student loan program you can pay a percentage of your income monthly towards your loans, which are forgiven after 25 years if they are not paid off at that point. Has anyone else heard of this, and do they know what the percentages are?

Answer: So, I don’t get it….is your intent to pay back as little as possible and wait out the 25 years so that the balance gets forgiven? This isn’t frugality, it’s living off others — who absorb that unpaid debt through their tax burden.

I know that student loans are tought – I was $22,000 in debt when I graduated 14 years ago – but generally the payment terms *are* reasonable and they should have been clear at the time you assumed them.

Please think this through, if this is your intent. Programs like student loans will not survive if their traditionally high rate of payback start to fall…. Review the terms of each of your loans, and see whether you can get a partial or full repayment credit for joining the Peace Corps or something. Certain Federally funded loans had such a provision, and at $38K, you could afford to give up a year in exchange for the loan value.

I don’t know what the Peace Corps offers now, but it used to two years, with a $10,000 stipend. That would work out to $24K a year after taxes and after expenses, if you could work such a deal.

And such a deal it would be, too, to travel to a cool place like Burundi or Baltimre and dodge bullets.

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