Highlights from the Dave Ramsey Show

QUESTION: Will in Mississippi is a fourth-year medical student about to graduate in a few months. He's accumulated $162,000 in student loans and isn't sure if he should enter into forbearance or begin paying them during his residency. He will make $48,000 a year and is married with three kids. Dave suggests living on the $48,000 and starting to pay off these loans if he can.

ANSWER: The first thing is to add no more debt. The second thing is to commit to, when you come out of school and get the big doc job, continue to live on less than $48,000 a year until you pay this ridiculous student loan back. As far as what to do with it in the meantime, your first goal is to live on the $48,000. If you can't do that, then yes, put it in forbearance.

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QUESTION: Michael in Nashville says his wife has student loan debt. He wants to know if he can negotiate the debt. Dave tells Michael why he shouldn't hold his breath.

ANSWER: They are not. The only thing that would be negotiable is if you are way behind and they've nailed you with a bunch of late fees. Some of the collections and late fees might be negotiable. The interest and the principal is not negotiable, and it's not bankruptable.

There's a reason for that. The government has guaranteed these. They are Sallie Mae loans, which means if the bank doesn't get the money from your wife, it can get it all from the government. Why would they negotiate?

If the balance is $21,000 and you offered them $17,000 cash, they would say no. If it's credit card debt or a second mortgage that's gone bad, there is no government guarantee then. They either need to get their money from you or they're not going to get their money.

If you are four payments behind and they think they are not going to get their money, then they will negotiate with you. That's how people negotiate for pennies on the dollar for stuff like bad credit card debt.

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Question: Deena in Michigan has paid off $100,000 of her student loan and says she qualifies for student loan forgiveness. She has $46,000 in school debt left and wants to know if she should change jobs in order to get the loan forgiveness (which would total $8,800) or keep working at the debt snowball.

Answer: Continue to pelt the debt and be done with it. For $8,800 to come your way, you are manipulating an entire 10-year period of your life, and it's not worth it. You guys have gone through your debt like a hot knife through butter.

I wouldn't change jobs for $8,000 over the scope of my life. You are being pulled and pushed into things that are unnatural for you. They are not the normal flow of your life just for this forgiveness. Instead, I would just plow right through it.

When that happens, you'll be so free and not handcuffed to anything. If it were $400,000, I guess we'd have to talk about it. If it were 20 years, you'd have to think about how to do that. But you're killing it and moving the needle. Good job.

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