Reddit Personal Finance,
I have been a long time lurker on this thread, however have never had the need to post anything to Reddit until recently, so it was time to make an account. I apologize in advance if I mess up anything in posting.
I was raised by a single mother who did a phenomenal job, but doesn't manage money all that well. Growing up, things were very tough for her, but she never let us kids know. My brother passed away when I was young followed by my father. Then my grandmother moved in with us to help raise the kids while my mom worked, but began developing Alzheimer's Disease. My mother took it upon herself to take care of my grandmother while working full-time for 7 years straight. This took a toll on everyone, but we were glad to do it. As a kid/teen, I had everything I could hope for, she never let money troubles affect her children, even after a bankruptcy in 2008 and losing our house.
At the time, she made ~$60,000/year, and contributed moderately into her 401(k). She was a widow for a long time and never dated or anything, only focusing on her kids. Eventually, she met a guy across the country and got married, but she cashed in her 401(k) to move us across country, to a place where her same job only makes ~$40,000/year, but she was finally happy and focused on herself, something we (her kids) supported 100%. I began going to a four year, public university to become a professional pilot shortly after that. I applied to many scholarships, but ended up only getting ~$10,000, for a notoriously expensive degree. I worked full time along with school, but my extra-curricular activities and flying classes meant I did not make enough money at my job to cover anything but food and earn mild college spending cash. I knew student loans were required, and asked her to apply to them for me, but I thought they were all in MY name. Come to find out, only a handful are in my name, of which she says I "couldn't get any more money in your name", and had to do a parent PLUS loan. I was fine with this, but knew I didn't want her paying back any of it.
I just logged in to her account after 4 years and just about passed out, despite following PF all the time, I don't know what to do. Please see below:
My direct loans: Through "Nelnet" Principal: $3,500 Outstanding: $3,525 Interest Rate: 3.860% Principal: $2,000 Outstanding: $2,285 Interest Rate: 3.860% Principal: $4,500 Outstanding: $4,500 Interest Rate: 4.660% Principal: $2,000 Outstanding: $2,250 Interest Rate: 4.660% Principal: $5,500 Outstanding: $5,500 Interest Rate: 4.290% Principal: $5,500 Outstanding: $5,500 Interest Rate: 3.760% Principal: $2,000 Outstanding: $2,144 Interest Rate: 4.290% Principal: $2,000 Outstanding: $2,051 Interest Rate: 3.760%
Current Balance: $27,757.93
Her Parent PLUS loans: Through "My Great Lakes", U.S. Department of Education
Principal: $34,947 Outstanding: $43,229.21 Interest Rate: 6.410% "Fees"???? $734+$734 Principal: $16,896 Outstanding: $20,171.83 Interest Rate: 7.210% Fees $362+$362 Principal: $23,342 Outstanding: $27,681.14 Interest Rate: 7.210% Fees $489+$511 Principal: $14,860 Outstanding: $16,569.86 Interest Rate: 6.840% Fees $318+$318 Principal: $12,900 Outstanding: $14,384.32 Interest Rate: 6.840% Fees $276+$276 Principal: $16,544 Outstanding: $17,258.14 Interest Rate: 6.310% Fees $352+$354
Current Balance: $139,474.50
Total: $167,231
Recently I got a job in my field, making $40,000/year base pay + between $20,000-$30,000 additional depending on how busy we are flying, but figure around $65,000/year.
Because I read PF all the time, I sometimes tell my parents about what I read, like that rule of thumb for saving for retirement. I asked them how much they had saved, and my step dad has about $50,000 my mom less than $5,000. They are 50 and 51 years old. They live in the moment, each owning nicer cars and motorcycles. They enjoy life, but I am worried of course. I told my mom about my concerns and she says "I'm not worried, I know I can't retire, I'll work until I'm 80, but I love working anyway."
I can't change how they live their life of course, but I do NOT want them to have to pay anything back on these loans. They've offered, but they need to focus on their lives. They could never pay this off anyway.
I have a 740 credit score, should I transfer my mom's loans into my name? Like through SoFi for example? Or should I just pay them the money and have them pay under their name?
Also, should I follow the PF flowchart, which is the plan, or does Reddit recommend a different course of action? Moreover, what other options do I have to pay these off that I may not know about? I plan on living as cheaply as possible.
TL;DR How should I pay for these loans so that my parents are unaffected?
Thank you very much in advance.
Submitted July 07, 2017 at 11:11PM by usfcartwrights http://ift.tt/2uB1q8G
