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Those rates are on the high side but not too crazy. About half of my loans were direct loans with a variable rate which was about 1.9% at the time although they
by mcot2 14y ago
Those rates are on the high side but not too crazy. About half of my loans were direct loans with a variable rate which was about 1.9% at the time although they could have changed. Without knowing his exact situation I can't really make a judgement.
With possible consolidation and accelerated payment plans there are even more options. Looking long term you want to get as much money as possible into retirement accounts and iras while you are young. I think the article even mentioned that he took a tax hit to deplete a retirement account and he also didn't contribute to a matching 401k. That's essentially just burning money...
- pilom 14y agoI agree with you on the 401k business, that was silly. As for consolidation, just for your information, consolidating federal loans changed in 2006 when federal loans went to all fixed rates. It used to be, with variable rate student loans you could consolidate at a lower interest rate if rates changed. Since 2006 all Federal loans are a fixed rate and all consolidations will just set your consolidation rate at the weighted average of the smaller loans. Thus most students who plan to pay more than the minimum payments are better off not consolidating and paying off higher interest loans first. But that guy did make some poor financial decisions.