Comments on: Student Loan Repayment Guide for Freelancers and the Self-Employed

By: Michael P. Lux, Esq.

Michael P. Lux, Esq. — Wed, 26 Oct 2022 22:42:51 +0000

In reply to Diana. Diana, It sounds to me like you are considering all of the relevant factors. The only obvious thing I see is that you might want to refinance your private loans into a fixed-rate loan. With interest rates on the rise, your 5.5% variable-rate loan is only going to get more expensive. Another thought that occurs to me is that some items that lower your income for student loan payment calculations may not lower your income for mortgage calculations. I'd suggest talking to a mortgage lender to see if your SEP or 401K-S-Corp contributions negatively impact your ability to buy a house. You might be surprised with what they have to say. As for the social security component, it think the situation might be similar. I'm fairly certain that the government has calculators for gaming out what your social security income will look like as future earnings change.

By: Diana

Diana — Wed, 26 Oct 2022 16:27:55 +0000

Hi, I am self employed attorney with approx. 56,000 in federal student loan balance and 51,000 in private student loans that I received between 2003 and 2005. My law school consolidated my federal loans in 2005 at a fixed rate of 2.875% held by a bank/guaranteed by the govt. with a payoff date 10 years down the line, consolidated again in 2021 with the DOE to take advantage of the Covid pause. The 4 private student loans are variable (currently sitting at approx. 5.5%) with a payoff date in early 2026. Lastly, I anticipate 10K in federal student loan forgiveness.
I am 63 with no dependents, self employed, rent in NYC/own no real estate and have about 18,000 in retirement savings in an SEP and a 401K-S-Corp retirement account. The S-Corp was created in 2021 and I am its sole owner.
M dilemma: If I minimize my income under the S-Corp., my min. federal student loan payments may be lowered but I won’t qualify for much of a residential mortgage. In the event of an illness or bankruptcy, the value of my home could be shielded from medical debt collectors/other creditors. Also, I do not know the impact of lower social security payments the last few years of working will have on my social security benefits in 7 years. I don’t know what to do. Please offer your feedback.

By: Michael Lux

Michael Lux — Wed, 24 Feb 2021 02:30:59 +0000

In reply to Detrick. Hi Detrick, Thanks for taking the time to comment and share a link for reference. However, I don't think that link says what you are suggesting. Both the title and the top of the list of job descriptions use the term "not-for-profit" If you or anyone else is trying to determine if their employer is eligible one of the best tools is the PSLF Help tool on studentaid.gov. You can enter your employer information and get the necessary forms to submit for certification. If there is any doubt, I highly recommend that you check it out.

By: Detrick

Detrick — Wed, 24 Feb 2021 02:21:24 +0000

Hello, thank you for this article. I believe for-profit public service employers (ie schools, hospitals) can be PSLF-eligible. See here: https://studentaid.gov/help-center/answers/article/what-not-for-profits-eligible-employers-for-pslf