Loan Payment Calculator - this almost gave me an aneurysm

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
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crombot
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Loan Payment Calculator - this almost gave me an aneurysm

Postby crombot » Thu Jan 14, 2010 11:13 am

http://www.finaid.org/calculators/loanpayments.phtml

I was thinking about the choices for schools that I have thus far and whether or not to withdraw from GULC's waitlist, and decided to see just how much of an impact paying sticker for law school would have financially.

This was DEFINITELY an eye-opener for me. It's funny that on the Acceptances Forum, people are just so excited to get in.....then you think about the $$, and it is quite sobering.

Enjoy.

Yimbeezy
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby Yimbeezy » Thu Jan 14, 2010 11:26 am

crombot wrote:http://www.finaid.org/calculators/loanpayments.phtml

I was thinking about the choices for schools that I have thus far and whether or not to withdraw from GULC's waitlist, and decided to see just how much of an impact paying sticker for law school would have financially.

This was DEFINITELY an eye-opener for me. It's funny that on the Acceptances Forum, people are just so excited to get in.....then you think about the $$, and it is quite sobering.

Enjoy.


When a bunch of prestige-loving people congregate on a forum, it can lead to group-think prestige-drunkenness. QED.

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vanwinkle
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby vanwinkle » Thu Jan 14, 2010 11:28 am

Paying sticker at any law school is essentially like taking out a mortgage, except you don't get a place to live out of the deal.

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GATORTIM
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby GATORTIM » Thu Jan 14, 2010 11:29 am

vanwinkle wrote:Paying sticker at any law school is essentially like taking out a mortgage (on a dump), except you don't get a place to live out of the deal.


fix'd

avacado111
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby avacado111 » Thu Jan 14, 2010 11:30 am

vanwinkle wrote:Paying sticker at any law school is essentially like taking out a mortgage, except you don't get a place to live out of the deal.


hahahaha
your paying 150k-200k for mental enrichment.

it scares me to think my t14 degree will cost me that much.

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vanwinkle
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby vanwinkle » Thu Jan 14, 2010 11:36 am

Think about it this way. You're contributing to the economic recovery by keeping law schools from having to lay off people! :wink:

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crombot
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby crombot » Thu Jan 14, 2010 1:56 pm

Yimbeezy wrote:
When a bunch of prestige-loving people congregate on a forum, it can lead to group-think prestige-drunkenness. QED.


Easy with the group-think. Just thinking back on that RC passage gives me the heebie jeebies. Same with the ever-so-ironic 'cakewalk' passage.

Yimbeezy
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby Yimbeezy » Thu Jan 14, 2010 2:00 pm

crombot wrote:
Yimbeezy wrote:
When a bunch of prestige-loving people congregate on a forum, it can lead to group-think prestige-drunkenness. QED.


Easy with the group-think. Just thinking back on that RC passage gives me the heebie jeebies. Same with the ever-so-ironic 'cakewalk' passage.


But when thinking about the cakewalk, do we invite the sharing of diverse opinions which helps us come to better conclusions, or does our group cohesion lead to the silencing of critical thoughts?

:mrgreen:

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crombot
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby crombot » Thu Jan 14, 2010 4:11 pm

Yimbeezy wrote:
crombot wrote:
Yimbeezy wrote:
When a bunch of prestige-loving people congregate on a forum, it can lead to group-think prestige-drunkenness. QED.


Easy with the group-think. Just thinking back on that RC passage gives me the heebie jeebies. Same with the ever-so-ironic 'cakewalk' passage.


But when thinking about the cakewalk, do we invite the sharing of diverse opinions which helps us come to better conclusions, or does our group cohesion lead to the silencing of critical thoughts?

:mrgreen:


TLS is definitely the latter. We think we know everything. :)

heathbar88
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby heathbar88 » Thu Jan 14, 2010 4:26 pm

I was just playing around with the calculator and for a $150k loan, with a 6.5% interest rate, paid back in 5 years it's a little under $3000/month. That doesn't really seem like that much to me, if you're making over $10,000/month after taxes and having loans paid off in 5 years is great; $7000/month is an absolutely livable salary (even in NYC, considering I make about 1/6 of $7000 and get along just fine living frugally), especially in places like TX. Of course, this is assuming you're making $165k out of law school and for me (and I assume other posters), full sticker at a T10 is worth the risk of not getting biglaw.

EDIT: But then again, maybe I'm missing something, because the calculator says one might experience difficulty trying to this pay this loan at a $250k+ salary. What am I not getting?
Last edited by heathbar88 on Thu Jan 14, 2010 4:32 pm, edited 1 time in total.

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Kiersten1985
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby Kiersten1985 » Thu Jan 14, 2010 4:29 pm

GATORTIM wrote:
vanwinkle wrote:Paying sticker at any law school is essentially like taking out a mortgage (on a dump), except you don't get a place to live out of the deal.


fix'd


Yeah, but you'll hopefully get a great paying job out of it. So you're essentially paying for great livelihood.

(I use the term "great" loosely :wink: )

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scolinos
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby scolinos » Thu Jan 14, 2010 4:40 pm

I just fooled around with a $150,000 loan. fml. I hope I can get some scholarships.

UCInfo
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby UCInfo » Thu Jan 14, 2010 6:08 pm

heathbar88 wrote:I was just playing around with the calculator and for a $150k loan, with a 6.5% interest rate, paid back in 5 years it's a little under $3000/month. That doesn't really seem like that much to me, if you're making over $10,000/month after taxes and having loans paid off in 5 years is great; $7000/month is an absolutely livable salary (even in NYC, considering I make about 1/6 of $7000 and get along just fine living frugally), especially in places like TX. Of course, this is assuming you're making $165k out of law school and for me (and I assume other posters), full sticker at a T10 is worth the risk of not getting biglaw.

EDIT: But then again, maybe I'm missing something, because the calculator says one might experience difficulty trying to this pay this loan at a $250k+ salary. What am I not getting?

All federal loans assume a 10-year payback, so you wouldn't have to pay at that substantial monthly level unless you were deadset on paying back in 5 years.

Paying off that loan with a Big Law job shouldn't be a concern. The problem is if you don't land a $165,000-a-year job.

OP's point was that for most people, $3,000 a month or even $1,500 a month is a ton of money. Most Americans don't even spend $1,500 a month on their mortgage. And you'd have to pay that for something intangible each month. Sure, it's an intangible that should pay for itself in both money and career enjoyment (otherwise, why would anyone do it?), but there's always a risk it will not pay off.

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crombot
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby crombot » Thu Jan 14, 2010 6:32 pm

UCInfo wrote:
Paying off that loan with a Big Law job shouldn't be a concern. The problem is if you don't land a $165,000-a-year job.

OP's point was that for most people, $3,000 a month or even $1,500 a month is a ton of money. Most Americans don't even spend $1,500 a month on their mortgage. And you'd have to pay that for something intangible each month. Sure, it's an intangible that should pay for itself in both money and career enjoyment (otherwise, why would anyone do it?), but there's always a risk it will not pay off.


Exactly. Plus, most (if not all) of BigLaw is restructuring associate salaries. Unfortunately, law school tuition is not adjusting with it. In 2013, starting salaries at the largest firms could be barely over 100k. And the rest of the market will adjust downwards as well.

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lt0826
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby lt0826 » Thu Jan 14, 2010 7:07 pm

Cost of living can be really high in a lot of the cities where biglaw is located as well. And there is a lot of pressure to keep up with joneses so to speak: expensive suits and accessories, expensive restaurants, nice car, nice place to live that all adds up. Also you will be in a high tax bracket and hopefully putting money into IRAs so while it seems like a lot of money, after expenses and paying off your student loans and taxes it won't be that much - especially in cities like NYC, SF, and Boston.

Anonymous Loser
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby Anonymous Loser » Thu Jan 14, 2010 7:12 pm

heathbar88 wrote:I was just playing around with the calculator and for a $150k loan, with a 6.5% interest rate, paid back in 5 years it's a little under $3000/month. That doesn't really seem like that much to me, if you're making over $10,000/month after taxes and having loans paid off in 5 years is great; $7000/month is an absolutely livable salary (even in NYC, considering I make about 1/6 of $7000 and get along just fine living frugally), especially in places like TX. Of course, this is assuming you're making $165k out of law school and for me (and I assume other posters), full sticker at a T10 is worth the risk of not getting biglaw.

EDIT: But then again, maybe I'm missing something, because the calculator says one might experience difficulty trying to this pay this loan at a $250k+ salary. What am I not getting?


I suspect what you are not getting is the improbability of taking home anything close to $10,000 monthly on a $165,000 annual salary. Can you explain how you've arrived at this figure?

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NosferatuDracon
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby NosferatuDracon » Thu Jan 14, 2010 7:15 pm

crombot wrote:
UCInfo wrote:
Paying off that loan with a Big Law job shouldn't be a concern. The problem is if you don't land a $165,000-a-year job.

OP's point was that for most people, $3,000 a month or even $1,500 a month is a ton of money. Most Americans don't even spend $1,500 a month on their mortgage. And you'd have to pay that for something intangible each month. Sure, it's an intangible that should pay for itself in both money and career enjoyment (otherwise, why would anyone do it?), but there's always a risk it will not pay off.


Exactly. Plus, most (if not all) of BigLaw is restructuring associate salaries. Unfortunately, law school tuition is not adjusting with it. In 2013, starting salaries at the largest firms could be barely over 100k. And the rest of the market will adjust downwards as well.


Lets just assume after taxes you take home $65000 a year...That's $5416 a month.

So lets assume you have a $300,000 mortgage that means your monthly payment with taxes and insurance would be somewhere around...$2500

Law school loans...assuming $180,000 debt would be $2072 a month

Now since you'll be living in the city there's no real reason to have a car that would leave you with $900 a month for the rest of your expenses...maybe I'm just too used to living frugally but that doesn't sound half bad to me.

And as long as firms don't actually drop their salaries down to $100,000...right now they are still at 145,000...you'll be okay. Not to mention that you'll be getting a pretty significant raise every year...to the tune of around 600 extra a month assuming 10,000 raise a year...that's not even counting bonus payout.

That's the reason most people are okay with it.

somethingclever
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby somethingclever » Thu Jan 14, 2010 7:27 pm

If you are living in Philly $900/month *might* cover rent, food, transportation and a few nights out. However if you are in DC/NYC/Boston, that won't even cover your rent.

Otherwise the reasoning seems sound. I actually think you might clear more than $65k after taxes, but that's pure speculation.

heathbar88
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby heathbar88 » Thu Jan 14, 2010 7:39 pm

Anonymous Loser wrote:
heathbar88 wrote:I was just playing around with the calculator and for a $150k loan, with a 6.5% interest rate, paid back in 5 years it's a little under $3000/month. That doesn't really seem like that much to me, if you're making over $10,000/month after taxes and having loans paid off in 5 years is great; $7000/month is an absolutely livable salary (even in NYC, considering I make about 1/6 of $7000 and get along just fine living frugally), especially in places like TX. Of course, this is assuming you're making $165k out of law school and for me (and I assume other posters), full sticker at a T10 is worth the risk of not getting biglaw.

EDIT: But then again, maybe I'm missing something, because the calculator says one might experience difficulty trying to this pay this loan at a $250k+ salary. What am I not getting?


I suspect what you are not getting is the improbability of taking home anything close to $10,000 monthly on a $165,000 annual salary. Can you explain how you've arrived at this figure?


I just ballparked it..$10,000/month=$120k/year which seems about right. Even ITE, the firms I'm interested in in TX are starting at 165k +bonuses.

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GeePee
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby GeePee » Thu Jan 14, 2010 7:48 pm

Just for reference... you probably will want to evaluate a decent portion of your loans at the 7.9% rate instead, since the likelihood of you getting all those stafford loans is pretty low.

ratherbesurfing
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby ratherbesurfing » Thu Jan 14, 2010 7:48 pm

a
Last edited by ratherbesurfing on Sat Feb 06, 2010 9:43 pm, edited 1 time in total.

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GATORTIM
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby GATORTIM » Thu Jan 14, 2010 7:49 pm

ITT: Neurosis overwhelms TLSers as they collectively speculate how much debt they will incur and what their salaries will be 3+ years from now while also managing to figure in the COL for cities which they cannot be certain to reside.

Edit: also incorporating future interest rates
Last edited by GATORTIM on Thu Jan 14, 2010 7:51 pm, edited 2 times in total.

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beesknees
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby beesknees » Thu Jan 14, 2010 7:50 pm

heathbar88 wrote:I was just playing around with the calculator and for a $150k loan, with a 6.5% interest rate, paid back in 5 years it's a little under $3000/month. That doesn't really seem like that much to me, if you're making over $10,000/month after taxes and having loans paid off in 5 years is great; $7000/month is an absolutely livable salary (even in NYC, considering I make about 1/6 of $7000 and get along just fine living frugally), especially in places like TX. Of course, this is assuming you're making $165k out of law school and for me (and I assume other posters), full sticker at a T10 is worth the risk of not getting biglaw.

EDIT: But then again, maybe I'm missing something, because the calculator says one might experience difficulty trying to this pay this loan at a $250k+ salary. What am I not getting?


You're missing:
1) $160k in Manhattan is basically middle class
2) If you aren't in Manhattan or Chicago or LA where the COL completely ridiculus, then you probably aren't making $160k/year right out of LS
3) It seems only 1/3 of T10 classes are getting those salaries. The other 2/3, poor bastards, are going to have to pay those loans off on half that salary.
4) Even if your scenario pans out, you're still paying about a third of your money to student loan debt. Financial advisors typically advise that your total debts should be about 10-15% of your income.

I'm thinking about paying sticker at Michigan, but when I go through the numbers and consider my statistical chance of pulling one of those top jobs, it really scares me. Now, that's not saying I couldn't bust my ass and get lucky, but to wager such a large sum on money on my ability to outperform a group of people I have absolutely no idea about except that they scored in the 97-99%ile on the LSAT and had great grades... well, that has me thinking twice.

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NosferatuDracon
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby NosferatuDracon » Thu Jan 14, 2010 7:51 pm

somethingclever wrote:If you are living in Philly $900/month *might* cover rent, food, transportation and a few nights out. However if you are in DC/NYC/Boston, that won't even cover your rent.

Otherwise the reasoning seems sound. I actually think you might clear more than $65k after taxes, but that's pure speculation.


I already included a mortgage so the 900 would only be necessary for the food, transport and nights out...unless you're eating out all the time I think 900 could get you through in most cities...granted I've never lived in New York but I know you could make it on that in DC as I have friends there that do live off that much or less probably even.

And again...that's only for the first year...and doesn't include bonuses.

I too agree that you are likely to clear more than $65k after takes, but for pure speculation I figured I'd be conservative with my explaination.

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reasonable_man
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Re: Loan Payment Calculator - this almost gave me an aneurysm

Postby reasonable_man » Thu Jan 14, 2010 7:55 pm

Why is it that everyone on TLS gets an offer to work at a biglaw firm after law school? Thus, why is this scenario the only one that is ever even contemplated?




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