Archives for March 3, 2016

Ask The Readers: Refinancing Student Loan Debt?

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

college_shirtSometimes I get questions about dealing with student loan debt, but I no longer feel well-qualified to answer. I graduated in 2000 with roughly $30,000 in student loan debt myself, but I never participated in any government-backed repayment plan, nor did I refinance it into a lower interest loan. Roughly 70% of students are graduating with debt today as opposed to 60% in 2000, according to this NPR chart:

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Once I started earning income, I did the “live cheap like a student” thing (not hard, I was a grad student for most of the time) and paid off the debt in about four years. If I had a bigger balance or a tighter budget today, I might do things differently given the current options. I know there are smart readers out there with more recent experience, so I ask you:

How did/are you handling your student loan debt?

Perhaps one of these government-backed repayment plans? If so, which one did you pick and why? Some limit your payment due to 10% to 20% of “discretionary” income, and some will even forgive the remaining balance after 20 to 25 years.

  • Pay As You Earn Repayment Plan (PAYE)
  • Revised Pay As You Earn Repayment Plan (REPAYE)
  • Income-Based Repayment Plan (IBR)
  • Income-Contingent Repayment Plan (ICR)

Did you refinance your loan privately through a student loan start-up or traditional bank? Why did you pick yours over the competitors? Some examples:

  • SoFi.com
  • CommonBond
  • Earnest
  • Local community bank or credit union
  • National bank or credit union like Navy Federal

Please share your experiences, positive or negative, in the comments. It will help me focus my own research. You can also me directly.

Pay with Discover Card Cash Back Points at Amazon.com ($15 First-Time Bonus)

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

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If you have cash back rewards accrued from Discover credit cards, you can use them to buy eligible items at Amazon.com. The redemption rate is $1 in Cash Back Bonus = $1 to spend at Amazon, which is the same rate as their statement credit redemptions. The only potential added benefit is the lack of minimum redemption amount (and any linked promotions…).

You’ll need to connect an eligible Discover credit card that earns Cash Back rewards, including:

First-time user bonus for Amazon Prime members. There is a first-time user bonus for up to $15 off your order when you use Pay with Points with Discover for the first time and are an Amazon Prime member (trial membership doesn’t count). The terms state this is a targeted offer, but I was able to use this successfully despite not being sent this offer directly. An important tip from the terms is the following:

If you are enrolling in the Shop with Points Program for the first time or have just become a Prime member, please be aware that it may take up to 72 hours before your promotional code will be accepted and applied.

Here is the page to sign up for Shop With Points using Discover. Again, you may need to wait 72 hours if you just signed up before applying this code.

Here are the directions, via FW:

  • Add products sold and shipped by Amazon.com to your Shopping cart.
  • Choose a Discover Shop with Points enrolled card as a payment method.
  • Enter the promo code DISC16EVER in the box provided on the checkout page, and pay for at least part of your order with CashBack Bonus
  • Up to $15 of savings will be reflected on the final checkout page.

Here is a screenshot of my successful application of this offer, using only $1 of Discover Cash Back (click to enlarge):

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(No, I didn’t actually buy the $500 Eero Mesh Router system, but I was just researching it as I’ve been having some WiFi coverage issues in my house. Sounds cool, but pricey.)

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