I am weighing a few options as it relates to my finances, and wanted to get some thoughts.
I am an attorney that had to take out student loans to fund law school (no undergraduate loans). While I had no trouble finding a job out of law school, I was just starting to get on my feet financially, so I opted for the federal “Income Based Repayment” option. Paying $400 – 600 per month seemed a lot better than $1,500 a month.
As it stands, I have three sources of debt: (i) mortgage - $145k; (ii) student loans - $145k; and (iii) installment loan for car - $6k. No credit card, medical or any other type of debt.
I have been following Dave Ramsey’s plan, which seems to be working well. I am now in a position where I am making significantly more money (~ $130k plus bonuses), so I am in a much better financial position and want to being tackling my loans student loans.
As my income is increasing, my Income Based Repayment payment is getting closer to what my payment would be under normal terms. I would like to refinance my federal loans with a private provider to reduce the interest rate and have a manageable repayment term and monthly payment.
But one issue I face is I am married and have three kids, and am the sole breadwinner. Under the federal program, if I were to die the government would forgive my student loans and it would have no impact on my estate. If I went private and subsequently died, the debt would not be forgiven and would be a liability to my estate.
One thing I thought about was taking out extra life insurance for the student loan amount.
Has anyone dealt with this before? If so, how did you handle it?
Submitted March 14, 2017 at 09:52AM by osusuperman26 http://ift.tt/2mVZdDw
