I’m a Teacher, Pregnant, and Trying to Pay Off Student Loans


Dear Steve,

I graduated in 2008 with $8000.00 on a private loan through Sallie Mae, which has become Navient. This is a private loan company. I also have federal loans, but those seem to actually be going down, and I am eligible for teacher loan forgiveness on the federal ones.

I am on income-based repayment through Navient, but after 8 years, I owe 7100.00. In 8 years, after paying between $20 and $50 a month, my balance has only gone down $900.00. So basically, I have paid around $1900 for the amount to decrease $900.

Obviously, I need to pay more, but here is my question. I am pregnant and my husband and I have some bills on our credit card from our wedding. Which should I focus on first?

We can’t afford to pay more than the minimum on both the credit cards and the student loan right now. (He already has two jobs and I have one and a baby on the way.)

Is it better to pay off the credit cards first or the student loan? I do get to claim the interest on my taxes for the loan, but I feel like I’m never going to get out from under it.



Dear Emily,

Congratulations on the new addition to the family.

If you are a teacher you may be eligible for the Public Service Loan Forgiveness (PSLF) program.

As silly as this sounds, the payments to date probably do not qualify you for forgiveness unless your loans are already on a Direct Consolidation Loan. Generally, loans must first be consolidated under a Direct Loan and then you can place them on an Income Based Repayment plan like you have now. After 120 on-time payments after you have consolidated them, then the balance can be forgiven.

“However, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF.”

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The rules get even more confusing, “If you have both Direct Loans and other types of federal student loans that you want to consolidate to take advantage of PSLF, it’s important to understand that if you consolidate your existing Direct Loans with the other loans, you will lose credit for any qualifying PSLF payments you made on your Direct Loans before they were consolidated.” – Source

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The interest rates on your credit card debt are most likely higher and so paying off the credit cards would save you the most amount of money. That is is we use that pesky math.

A quick way to repay the credit cards painlessly and faster would be to make at least the minimum payment this month and keep paying at least the payment you make this month, every month. As your credit card balance goes down the minimum payment will go down. Just don’t get addicted to chasing minimum payment crack as it goes down and you’ll dig yourself out faster.

I understand how you might emotionally feel like taking drastic action on your debts with the changes in your life. That’s normal.

But now is probably the time to think about consolidating your federal student loans into a new Direct Loan and electing the IBR repayment. That way at least your payments will count towards something. Consolidating will not cost you anything and it won’t hurt. While your federal student loan balances are not high, and you might actually repay your loans under the IBR before you make 120 payments, it at least hedges your bets.

Life is getting ready to deal you some big financial surprises with a new addition on the way. Kids are expensive. Surprisingly expensive.

So, think about dealing with the federal loans, make your private loan payments, work on paying off the credit cards but almost more importantly, try to start saving a little each month. With children come financial surprises and if you don’t want to start making those credit card balances grow you’ll need an emergency savings account to help with surprises.

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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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