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Student loans

Chris Farrell Feb 23, 2010

Question: I currently have some loans (40K) both undergrad and grad school. I am just graduating and am getting a job in China. However, I will pay the rate in China so I will be paid in Yuan. So comparatively I will be paid well by the Chinese standards, when converted to dollars the rate is definitely less. I calculated the amount and it will be equivalent to 800 dollars per-month. So my question is, what are my options? Just so you know am a computer Engineer so this is a good opportunity. Ian, Lowell, MA

Answer: What an adventure to live and work in China at a moment when the Asian giant is emerging as a major force in the global economy. I can well imagine that working in China will give your new career a good boost.

With that in mind, I would consider for the moment planning on repaying the monthly minimum amount on your student loans. There are a number of options available to you for lowering your monthly tab, assuming that these are federally-sponsored loans or mostly government-backed loans. A good source of information for researching your payback choices is The U.S. Department of Education is also worth checking out at

Of course, the potential price you’ll pay for cutting monthly upfront payments is a higher overall principal-and-interest bill for your education. I say “potential” because there is no prepayment penalty with student loans. So, by moving to China you’re continuing your investment in your chosen field. But in light of the currency translation issue it’s probably a good move to minimize the debt repayments. But I would strongly recommend that you accelerate your student loan repayment plan when your career takes off and you’re earning a higher income.

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