I’m 62 years old with $100,000 in student loans and $13,000 in credit card debt. What can I do? – Market observation | Vette Leader

How to get out of student loan debt

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Question: I work as a nurse for a small for-profit agency. I am employed and have no option for overtime. I only have time every other weekend that I could do overtime. I have serious medical problems with huge medical bills. I have $13,000 in credit card debt, over $100,000 in student loan debt, I owe about $40,000 on my home loan, and I have a car payment. I am 62 and my full retirement age is 67. I have very little retirement savings. My student loan payment is over $700 a month on an income-based repayment plan. If this continues in August I will be running a budget deficit of $200/month! What can I do? When do you think I should retire in terms of student loans?

Answers: You’re already doing some things right, like an income-based repayment plan that helps you manage debt. But here’s the catch: “Because you work for a for-profit agency, you are not eligible for Public Service Loan Forgiveness (PSLF), which is unfortunate as your loans would be forgiven after 120 qualifying payments if you had worked full-time for.” a government agency or non-profit organization, while the loans are repaid in an income-based repayment plan in the Direct Loan program,” says Mark Kantrowitz, author of Who graduates from college? Who does not?.

Do you have questions about debt reduction? Email to chill@marketwatch.com.

You could also try asking your employer for a raise or bonus. “Your loan payments will increase as your income increases, but your income may increase enough to cover your budget deficit. Nurses are in demand, so your employer may be willing to pay more to keep you as an employee. Cite your high student loan debt as a reason you need a raise,” says Kantrowitz.

If you’re unable to pay off all of your debt, Anna Helhoski, student loan expert at NerdWallet, says you should contact your lender or service provider to see what options are available to you. “If your discretionary income has changed, you may be eligible for a lower student loan payment,” says Helhoski.

Note that you’re doing this because your loans are federal and you have an income-based repayment schedule Not want to refinance your loans. However, for readers with higher-rate personal loans, here are the lowest student loan rates you may qualify for.

Retirement savings and student loan debt

If you’re on an income-based repayment plan and don’t have a pension plan, consider the following: “When you reach retirement age with no pension plans, you’ll be dependent on Social Security for your living expenses. The loan payment under an income-based amortization plan is zero if your income is less than 150% of the poverty line,” Kantrowitz says. So chances are you’ll have a much lower student loan payment when you retire. Surprisingly, a calculated Bafög payment of zero under an income-related repayment scheme counts as repayment, and after a total of 240 (20 years) or 300 (25 years) payments, depending on the type of income-related repayment scheme, the remainder of the debt can be forgiven.

Another thing to consider is that pushing the retirement age increases the amount you get from Social Security each month, which could help you manage your debt better. However, sometimes you don’t have a choice when to retire as health can get in the way.

dealing with other debts

Given that you have a variety of debts, Andrew Pentis, a certified student loan counselor and student debt expert at Student Loan Hero, recommends consulting a free or low-cost credit counselor at a nonprofit credit counseling agency like the National Foundation for Credit Counseling or InCharge. “They can explore with you the possibility of a debt management plan that will organize your various outstanding balances and potentially lower your payments as you work towards a debt-free income,” says Pentis.

It’s also important that you work to either make more money or spend less, or both, says Tatiana Tsoir, chartered accountant and author of Dream bold, start smart. “A part-time job, even if it’s infrequent and outside of working hours, could be an opportunity to increase your income,” says Tsoir. Another thing Tsoir says you can try is negotiating with your credit card companies to reduce your debt. “If you can improve your cash flow, you could try aggressively paying down credit card debt without increasing the balance again. This could free up a few hundred dollars to save for retirement, and as you pay off other debt, your savings can increase,” says Kantrowitz.

Creating a descriptive budget to track where your money goes each month is also something to consider. Kantrowitz recommends keeping receipts for each expense and recording them in a spreadsheet where you mark each expense as mandatory or optional. “Also group them into broad categories like food, entertainment, housing, taxes and insurance. At the end of each month, add up the categories and tags and you’ll see what you’re spending your money on,” says Kantrowitz.

And Bobby Matson, founder and CEO of Payitoff, a fintech that enables financial institutions to offer student loan refinancing and restructuring plans, says you might want to consider giving up your car and using public transportation, or review whether you are entitled to free or discounted public transport, depending on your medical issues. “Some or all of your medical debt may be able to be negotiated for a lower amount, and similarly you can likely negotiate a lower repayment amount on your credit card or refinance the balance at a significantly lower interest rate,” says Matson.

The advice, recommendations or reviews in this article are those of MarketWatch Picks and have not been verified or endorsed by our trading partners.

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