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Ask Dave

Income-Sensitive Payments?

Sarah should do a fixed payment plus a little more to pay back her student loans after she consolidates them.

QUESTION: Sarah wants to consolidate her student loans.  Should she do income-sensitive payments or graduated payments?

ANSWER: I think you should do a fixed payment plus a little more.  Cut your budget down to bare bones, maybe take a second part-time job and have the student loans paid off in a couple years.  I don’t recommend debt consolidation, but I do recommend consolidating student loans.