How to pay off student loan

Paying for College
21

OP here.

Below is more detailed situation:

$19,000 is all direct subsidized loan, so there is no interest accumulating now.

We can do without borrowing but it will lower our savings to under the 6-month-worth of income emergency fund threshold.

After graduation, we can still save 6 additional months during the grace period and we can pay if all off without interest.

This will indeed lower our savings to under the threshold. However, since we don’t have to save for tuition anymore, we can build the emergency fund quite fast.

My husband is a bit worried to go down the threshold. (and he believes paying little by little will build her credit history)

I say pay it at once even though we will be under the threshold for a few months (maybe 4 to 5 months.)

22

You will make her last college payment months before her loan payment will be due. Can you bump up your savings starting at that time?

23

You are right. Yes. The last tuition payment should be in December so we can start building up our savings from there. We will still go under the threshold if we decide to pay it all off.

24

During this chaotic time, It may not be wise to raid your emergency fund, and I think 6 months is actually not enough, a year is better.

My spouse suddenly got laid off last fall, and boy was I glad we had a healthy emergency fund.

Previously, DH had been trying to get me to agree to spend some of it on some home repairs and a new car. In the end, it was a good thing I did not listen to him.