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Thread: 15k, pay off student loans or invest?

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    Veteran Member Adrienne7's Avatar
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    Default 15k, pay off student loans or invest?

    Hello all, needing some $$ savvy advice. I am coming into a chunk of about 15k. I have probably 40k in student loans with 3 more years of grad school to go. Will likely graduate with 100k or more in loans and plan on doing a revised income based repayment plan. There is a possibility of another 15k gift yearly for the next couple years. So would it be smarter to invest this, or pay off 15k of Grad Plus loans? I am definitely going to need to take out more loans over the next 3 years until I graduate. Should I pay as early as possible to get ahead of the interest, or invest and rely on the income based repayment plan later on?

    Thanks so much!!

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    Veteran Member Adrienne7's Avatar
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    Default Re: 15k, pay off student loans or invest?

    And if I do invest, how do I find out the best kinds of investments that amount of money? Thanks, I am new to even having the option of saving let alone investing something.

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    God/dess arielbriel's Avatar
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    Default Re: 15k, pay off student loans or invest?

    I would put it in a retirement account === compounding interests.

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    God/dess Zofia's Avatar
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    Default Re: 15k, pay off student loans or invest?

    Quote Originally Posted by Adrienne7 View Post
    Hello all, needing some $$ savvy advice. I am coming into a chunk of about 15k. I have probably 40k in student loans with 3 more years of grad school to go. Will likely graduate with 100k or more in loans and plan on doing a revised income based repayment plan. There is a possibility of another 15k gift yearly for the next couple years. So would it be smarter to invest this, or pay off 15k of Grad Plus loans? I am definitely going to need to take out more loans over the next 3 years until I graduate. Should I pay as early as possible to get ahead of the interest, or invest and rely on the income based repayment plan later on?

    Thanks so much!!
    How much do you expect to make with this degree?

    Currently Grad Plus loans are at 7.08% interest. No, and let me repeat that, NO investment will guarantee a 7% annual return, year after year after year. (I know that average returns in the stock market are higher, but those are averages. Some years are higher some lower.) So, this is expensive debt. You do not borrow money at 7.08% to make less with your investments. If you are getting a $15,000 windfall, use it to pay down your debt.

    Look for scholarships. Every school has them and there are millions of dollars of scholarships available in the world. Go find them and reduce your borrowing demand.

    INCOME! You are asking a question on a dancer website, so presumably you are a dancer. As you know, with just a little more effort, we can make much more money. So, think about adding an extra shift every week. That's got to be worth $400-$1000. When I was dancing, one shift a week usually paid all my basic living expenses for that week. That freed up a lot of income for tuition, books, and the other stuff that college costs.

    Repayment. Why are you looking at income based repayment? That traps you in payments for a degree for 20+ years! If a degree won't generate enough income to pay it off in ten years, don't even think about borrowing money to get that degree. You will be poor forever.

    HTH
    Z

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    Veteran Member Adrienne7's Avatar
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    Default Re: 15k, pay off student loans or invest?

    Thank you so much for the replies!! Excellent points, ok I will definitely pay off the debt.

    I might consider picking up a shift a week, but I am in Portland where the average is more like $200 to $350 a shift. Also I am 37 and after doing this for 15ish years very off and on, my knees hurt and the thought of dealing with customers makes me feel a dark and barely spreadable disgust and rage, soooo..... I still have my looks but am extremely over it and jaded as fuck. Might be worth one or two more years though...

    I do have an RN degree as a backup, so I can work summers doing that, though I hate the work and it makes me physically and mentally unwell to do it full time, hence the career change. I am learning acupuncture which is a passion but might not pay as well as nursing. But if push comes to shove I can work as a nurse for a while, while building my acupuncture practice. Either way will be good to have less debt...

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    God/dess Zofia's Avatar
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    Default Re: 15k, pay off student loans or invest?

    Quote Originally Posted by Adrienne7 View Post
    Thank you so much for the replies!! Excellent points, ok I will definitely pay off the debt.
    You are most welcome.

    I might consider picking up a shift a week, but I am in Portland where the average is more like $200 to $350 a shift. Also I am 37 and after doing this for 15ish years very off and on, my knees hurt and the thought of dealing with customers makes me feel a dark and barely spreadable disgust and rage, soooo..... I still have my looks but am extremely over it and jaded as fuck. Might be worth one or two more years though...
    Didn't know Portland was that weak. For $200 a night, I wouldn't strip either!

    I do have an RN degree as a backup, so I can work summers doing that, though I hate the work and it makes me physically and mentally unwell to do it full time, hence the career change. I am learning acupuncture which is a passion but might not pay as well as nursing. But if push comes to shove I can work as a nurse for a while, while building my acupuncture practice. Either way will be good to have less debt...
    Have you looked into management? The pay is good, and not on your feet as much.

    XOXO
    Z

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    Veteran Member Adrienne7's Avatar
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    Default Re: 15k, pay off student loans or invest?

    I don't think I am cut out for management if I am honest with myself looking into some lower impact nursing specialties though

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