Student Debt Information?
A student of mine came in today and asked about some information about his debt. I wanted to get some information about what the best option is for him. He will be graduating here next spring with federal loan debt at around $ 44,000 and private debt at around $ 5250. The interest rate is 6.80% on the federal and 6.0% on the private.
He has already contracted with a company that pays him a salary of $ 35,000 per year plus full benefits and moving expenditures. After he completes a 22 week training program his pay will increase to $ 40,000. What is the best option for him? Should he be saving more of that money or paying off his debt faster by making more than the minimum. If so how much should he save and how much should he designate to his loans. The minimum for the federal loans is right around $ 230/mo and the private is something like $ 165/mo.
He has no credit card, car loans, or mortgages.