Paying of Student Loan Plan 1 and 2

Hello

My partner is a high earner 70k+ and has both a plan 1 and 2 as she did 2 degrees.

Plan 1 seems lower interest so no drama but the interest rates of plan 2  is way too high

Is there a way to pay off the entirety of plan 2 but leave plan 1?

Replies

  • NatrcNatrc Forumite
    62 Posts
    10 Posts Name Dropper
    Forumite
    63e300 said:
    Hello

    My partner is a high earner 70k+ and has both a plan 1 and 2 as she did 2 degrees.

    Plan 1 seems lower interest so no drama but the interest rates of plan 2  is way too high

    Is there a way to pay off the entirety of plan 2 but leave plan 1?
    I think you can overpay on the specific loan, it really is as simple as the link above. 
    I can totally understand your partners plan 2 dilemma/stress - I am also a plan 2 large loan holder (recently graduated) and set to be a high earner in the future, and the interest is beyond eye watering. 
    I would reccomend doing some basic calculations (i think there are calculators out there if you do a quick google) and work out whether it would be optimal for you to overpay now (I would avoid overpaying in small chunks unless you can pay the whole loan off over a relatively short period as the small chunks may just get consumed by interest and thats just money wasted) or whether it would be optimal to pay the minimum each month and let the loan wipe at 30 years post graduation. If you have enough either now or in the very near future to pay the plan 2 loan off in full, that is likely going to be the best financial choice, but if thats unlikely, it may be better in the long term to not overpay, and to invest your money elsewhere for better gains. 

    Good luck
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