Ask Terry Questions Student Loans

Student Loans

By Terry Savage on August 19, 2023 | College Savings / Student Loans

Good afternoon, I enjoy hearing you when I can and watching you on WGN. My question is in regards to my sons student loan(s). He has 2 Gov’t loans totalling about $4200 and he has 1 private loan around $1700. The Govt loans will be coming off the pause and he has been paying the private loan. He is getting married Nov 2024, needs a car, wants a house etc. He wants to pay off the Govt loans. I told him IF you can afford it, but you may be better paying the Private loan off and carrying the balance of the Govt loans and continue to make payments + extra towards pricipal. I believe the Govt loans are fixed rate at about 5 – 5.5% What would your suggestion be?

Terry Says

The private loan almost surely has a higher rate. Pay that off first, asap. And, frankly, I think they should spend less on the wedding etc and pay off that Federal student loan quickly. There is no sense paying ANY interest on this loan. It builds up over the years. Best idea –postpone the wedding and use it also as a celebration for being debt-free!! (Do you think you can sell that idea?? If not, it would be a great wedding gift to “match” him 50/50 for the loan repayment!)



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