The following guest post is from long-time reader Rebecca in response to my friend Isabelle’s new budget. I thought anyone with student loans may be interested. 
Thanks Rebecca!
Our Student Loans
I wanted to provide some unsolicited input for Isabelle regarding her student loans. I don’t know what interest rate Loan #2 is at, or who her student loans are with, but I do have quite a bit of experience with student loans in general. My husband and I actually have quite a bit of them, but luckily they are at a combined fixed rate of less than 2%, so they are not a priority for us to pay down. Anyway, back to Isabelle.
Advice
I am going to assume at least one of her loans is with Sallie Mae, since they have a large share of the market. If she does not have Sallie Mae, most student loan servicers probably offer similar options. Sallie Mae has quite a few options to help individuals who are currently struggling with their payments. Some of these require proof of income, and others don’t. In either case, I would suspect she would qualify. In her account, there should be a link for “lower my payment” that will take her to a screen that offers various options.
In the past there was an option to essentially change your student loans to interest only for up to 5 years. From what I recall, there were no income requirements to elect this option. You were also not prohibited from making additional payments, so if it is still available, this option can be use to essentially allow her to shift the principal portion of the Loan #2 payment to Loan #1. I can’t tell if that option is available anymore, it doesn’t appear on my screen but that could be because we already exhausted our 5 years of this.
Other Option
Outside of this particular option, there are income based repayment plans that she might be able to take advantage of, especially if there is a significant difference in the rates of her loans. If she could shift say $100 of payments from loan 2 to 1, My guess is that Loan 1 is on a 15 year repayment and loan 2 is on a 20 year repayment at 3.4% so this would allow her to say about 4% in interest on the extra payments.
Also, just in case you or she wasn’t aware, there are programs specifically for individuals who work in teaching and certain other public sector jobs to forgive portions of student loans for service. I believe these progams are particularly generous for teachers in low income/inner city schools. If this type of position is one Isabelle is considering, you guys should look into the programs more.
Best of Luck to Isabelle in her job hunt!
Crystal’s Comments: This is why I love blogging! I don’t have any experience with student loans so I didn’t have any good advice, but this community is so awesome and we can all learn from each other! Thanks Rebecca!
Student loans are definitely tricky and it depends on which specific loans you have and who they are with. Unfortunately without that information I can’t offer much help. My girlfriend has some private student loans though and they are at variable interest rates so we’re trying to pay them off as soon as we can before rates go up!
I have a different strategy. I am going to school part-time while working full-time. Yes it takes me longer, but I pay my tuition in full every semester from my paycheck, so I do not incur any student loan debt.
Interesting! The place that holds my student loans offers nothing of the sort — but they may be in the minority.
Another great resource is Ready For Zero. I definitely suggest you check it out.
I hate Sallie Mae. I moved all of my loans away from them. Most student loan companies and servicers are sharks. I think your insurance for not using them is encouraging your kids to become world-class athletes so they get huge scholarships! It will lead to fewer sleepless nights for their parents
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