Student loan payments: get advice and actual numbers here

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Thu Mar 22, 2018 12:47 pm

Currently at a T30, significant ties to the area. Not going big law and will finish school between 65-70k debt between UG and law school.

Is this payable on small firm salary of 65-75k? Seems to be what I'd be earning in my market according to lawyer friends. I know it's not sticker debt but still beginning to freak out since I passed on full ride at a lower ranked school which presumably would've landed me in the same place I'm in now.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Thu Mar 22, 2018 6:58 pm

Currently at a T30, significant ties to the area. Not going big law and will finish school between 65-70k debt between UG and law school.

Is this payable on small firm salary of 65-75k? Seems to be what I'd be earning in my market according to lawyer friends. I know it's not sticker debt but still beginning to freak out since I passed on full ride at a lower ranked school which presumably would've landed me in the same place I'm in now.


The general rule is that if you can keep your total debt at or below your yearly income, it is manageable. There are obviously many exceptions to that rule -- but without knowing your COL, debt terms, family support obligations, etc., it's impossible to say more than $65-70k debt can be payable on a yearly income of $65-75k.

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Johann

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Re: Student loan payments: get advice and actual numbers here

Postby Johann » Thu Mar 22, 2018 9:27 pm

Anonymous User wrote:Currently at a T30, significant ties to the area. Not going big law and will finish school between 65-70k debt between UG and law school.

Is this payable on small firm salary of 65-75k? Seems to be what I'd be earning in my market according to lawyer friends. I know it's not sticker debt but still beginning to freak out since I passed on full ride at a lower ranked school which presumably would've landed me in the same place I'm in now.

PAYE and REPAYE will be your friends. Learn up on them now. You could service it without these, but why even bother trying. Use the fedloan programs to your advantage.

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Re: Student loan payments: get advice and actual numbers here

Postby clerk1251 » Mon Mar 26, 2018 3:50 pm

clerk1251 wrote:Someone once posted a spreadsheet that was set up to calculate ones repayment of their FRB loan, but I can't seem to find it anywhere. It was really helpful with all the values and equations already filled in, and all you needed to do was plug in your individual numbers. It even had comparisons to a non FRB loan, as well as a calculation to figure out what you'd forgo by keeping the minimum 3500 balance in the account.

If anyone happens to have a link to download this spreadsheet, or even something similar, I'd greatly appreciate it!


bump... anyone?

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Re: Student loan payments: get advice and actual numbers here

Postby v5junior » Fri Apr 06, 2018 10:56 am

Who these days is offering the best interest rates for refinancing other than First Republic?

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Fri Apr 06, 2018 10:07 pm

I would appreciate any and all advice on how I should go about repaying my loans when I graduate this year:

Debt: $65k
Interest rates: 8k at 3.8%, 57k at ~5-6%
Rent: 1600
Income: $155k + bonus (biglaw secondary market)

Very motivated to buy a condo or something similar as soon as possible to put monthly payments into equity as opposed to rent.

Curious if you all think I should 1) refinance my loans and 2) if i should focus on paying off loans over investing or saving up to buy a place?

Thanks!

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Apr 16, 2018 2:00 pm

Would appreciate feedback on my current repayment plan. Just finished my exit counseling and did some calculations, repayment begins in January 2019. I plan on using the 3 months or so i'll be working this year to try and pay back most of my advance, put together a bit of a rainy day fund, etc.

Debt: 170k (i'd like to note that this is 5k higher than my original estimate, despite doing a 1L SA and making around 20k as a 3L. Part of that is due to undergrad loans I thought were getting paid off, most of it is due to wildly underestimating living expenses. Professional wardrobes, dope vacations and dating are expensive.)
Interest rates: Average 6%
Income: 180k (NY Biglaw)

The plan:

According to Paycheck city, I will be bringing in $8,438 a month after taxes and assuming tax free contribution of $1,500 per month to a 401(k).

Rent: 2k (living with a roommate somewhere not particularly cool, hoping to keep this under 2k)
Loans: 3k
Living Expenses: 2k (I think I can stick to this, I spent less than $500 a week as a summer and I was absolutely out of control.)
Clothes/Furniture/Vacation Fund: $500

This leaves me with $938 bucks a month. Some of that will go to healthcare (not sure how much the contribution is), but I should have some money to play around with every month.

I will probably use a decent chunk of my bonus on vacation, hopefully I will make it a few years and can sink some of those meatier bonuses into loans.

Does this make sense? I'm pretty bummed about having so much debt, but even living in NY it seems like i'll do alright. I obviously won't be living with a roommate in Murray Hill or wherever for very long, but I think any ramp-up in cost of living will be more than matched by salary increases. IF anyone has thoughts, i'd appreciate feedback.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Apr 16, 2018 2:46 pm

Anonymous User wrote:Would appreciate feedback on my current repayment plan. Just finished my exit counseling and did some calculations, repayment begins in January 2019. I plan on using the 3 months or so i'll be working this year to try and pay back most of my advance, put together a bit of a rainy day fund, etc.

Debt: 170k (i'd like to note that this is 5k higher than my original estimate, despite doing a 1L SA and making around 20k as a 3L. Part of that is due to undergrad loans I thought were getting paid off, most of it is due to wildly underestimating living expenses. Professional wardrobes, dope vacations and dating are expensive.)
Interest rates: Average 6%
Income: 180k (NY Biglaw)

The plan:

According to Paycheck city, I will be bringing in $8,438 a month after taxes and assuming tax free contribution of $1,500 per month to a 401(k).

Rent: 2k (living with a roommate somewhere not particularly cool, hoping to keep this under 2k)
Loans: 3k
Living Expenses: 2k (I think I can stick to this, I spent less than $500 a week as a summer and I was absolutely out of control.)
Clothes/Furniture/Vacation Fund: $500

This leaves me with $938 bucks a month. Some of that will go to healthcare (not sure how much the contribution is), but I should have some money to play around with every month.

I will probably use a decent chunk of my bonus on vacation, hopefully I will make it a few years and can sink some of those meatier bonuses into loans.

Does this make sense? I'm pretty bummed about having so much debt, but even living in NY it seems like i'll do alright. I obviously won't be living with a roommate in Murray Hill or wherever for very long, but I think any ramp-up in cost of living will be more than matched by salary increases. IF anyone has thoughts, i'd appreciate feedback.


If you don't plan on ever working for the govt you should absolutely refinance your loans. You can get that monthly payment under $2k.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Apr 16, 2018 4:56 pm

Anonymous User wrote:
Anonymous User wrote:Would appreciate feedback on my current repayment plan. Just finished my exit counseling and did some calculations, repayment begins in January 2019. I plan on using the 3 months or so i'll be working this year to try and pay back most of my advance, put together a bit of a rainy day fund, etc.

Debt: 170k (i'd like to note that this is 5k higher than my original estimate, despite doing a 1L SA and making around 20k as a 3L. Part of that is due to undergrad loans I thought were getting paid off, most of it is due to wildly underestimating living expenses. Professional wardrobes, dope vacations and dating are expensive.)
Interest rates: Average 6%
Income: 180k (NY Biglaw)

The plan:

According to Paycheck city, I will be bringing in $8,438 a month after taxes and assuming tax free contribution of $1,500 per month to a 401(k).

Rent: 2k (living with a roommate somewhere not particularly cool, hoping to keep this under 2k)
Loans: 3k
Living Expenses: 2k (I think I can stick to this, I spent less than $500 a week as a summer and I was absolutely out of control.)
Clothes/Furniture/Vacation Fund: $500

This leaves me with $938 bucks a month. Some of that will go to healthcare (not sure how much the contribution is), but I should have some money to play around with every month.

I will probably use a decent chunk of my bonus on vacation, hopefully I will make it a few years and can sink some of those meatier bonuses into loans.

Does this make sense? I'm pretty bummed about having so much debt, but even living in NY it seems like i'll do alright. I obviously won't be living with a roommate in Murray Hill or wherever for very long, but I think any ramp-up in cost of living will be more than matched by salary increases. IF anyone has thoughts, i'd appreciate feedback.


If you don't plan on ever working for the govt you should absolutely refinance your loans. You can get that monthly payment under $2k.


Yeah, I plan on doing that. I’m a little leery because my school has an awesome loan repayment program that is a great insurance policy, but if I feel comfortable after 1 year I’ll refinance. Hoping to get my credit score into the 800s in the mean time.

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Re: Student loan payments: get advice and actual numbers here

Postby Atlanta Trapstar » Tue Apr 17, 2018 12:50 am

Johann wrote:i would REPAYE. a 10 year refi with 3200/month in rent is gonna be tight. 10 year 3.35 compared to 25 year 4.35% or whatever your effective rate on REPAYE are both pretty consistent with market. which means neither is that compelling over the other. so yeah, id stay with the one then that has debt forgiveness and tons of protections attached, which is not market. i.e., REPAYE is the better deal.

fwiw, this is my new philosophy. i think all new lawyers who are approaching or>200k in debt regardless of outcome (i.e., even those in biglaw), should do one of these plans for at least 2 years.

Do you have govt loans and not refinancing, you should follow one of these plans:
(1) PAYE: max cash flow, invest in SP500 index, max401k and HSA to lower payments, ride out 20 years of forgiveness and maybe tax bomb. (If you want to make some options on tax bomb, we can prolly make a deal in 5 years once I have more money).
(2) do you want to eventually pay down your loan and are throwing tons of cash but don’t want to lose fed gov protections in case you get biglaw canned? REPAYE: file for repaye with stub year income. Your monthly payment should be like $350ish (I think, ballpark). HALF of Your monthly interest accrued above your payment (350) will be paid by the fed gov. Eg you accrue 1k interest per month on 200k of debt (6%), that means 650 of accrued interest is not paid. Gov knocks your interest down 325. You make a payment beyond your loan requirement to whatever your hearts desire in addition. Over the course of the year, your 12k in interest (6%) has been subsidized by the fed gov to the tune of $3900 (1.95%) making your effective interest rate (4.05%). Now what does FRB really have on you?!?!

This is the strategy I did out of law school. Due to some shit, I’ve not saved anything yet. And having watched my loan balance increase from like 175 to 190k, I’m confronted with whether I should refinance now and start hitting the loans hard. House/marriage/kids/SAHM aren’t concepts i thought about when i graduated but they’re a lot scarier now.

My PAYE payments will still be less than interest growth for 1 more year.
2018 PAYEment:$570/mo
2019: $800
2020: $1055
Loans: 190k at 6.55% with 17 years to go.
Forgiveness with 5% wage growth? ~$75k.
Total payments: $285k plus $25k bomb= $310k.

Monthly take home after tax & rent: $6k
10 year refi(4.875): $240k

I think you ignore the interest component when determining federal loan growth?
If so, quick math would show that $600 vs $2000/month refi’d would cost me about $16800 and yield $17300 difference in total loan balance. Assuming I can be good and bank that, that’s only a 3% savings on my money for next year. So I need to guarantee 3.6% return on investment to do better than refi. That seems reasonable, so I need to stomach this shit out and just trust PAYE for at least another year. But it’s hard. Being 38 with $170k worth of student loan debt is going to feel pretty bad. Obviously, the goal is to have slightly more than that in the bank tho. Just a lot of discipline.

Just my data points for this thread. And my math is probably wrong.

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Re: Student loan payments: get advice and actual numbers here

Postby Johann » Tue Apr 17, 2018 1:34 am

Atlanta Trapstar wrote:
Johann wrote:i would REPAYE. a 10 year refi with 3200/month in rent is gonna be tight. 10 year 3.35 compared to 25 year 4.35% or whatever your effective rate on REPAYE are both pretty consistent with market. which means neither is that compelling over the other. so yeah, id stay with the one then that has debt forgiveness and tons of protections attached, which is not market. i.e., REPAYE is the better deal.

fwiw, this is my new philosophy. i think all new lawyers who are approaching or>200k in debt regardless of outcome (i.e., even those in biglaw), should do one of these plans for at least 2 years.

Do you have govt loans and not refinancing, you should follow one of these plans:
(1) PAYE: max cash flow, invest in SP500 index, max401k and HSA to lower payments, ride out 20 years of forgiveness and maybe tax bomb. (If you want to make some options on tax bomb, we can prolly make a deal in 5 years once I have more money).
(2) do you want to eventually pay down your loan and are throwing tons of cash but don’t want to lose fed gov protections in case you get biglaw canned? REPAYE: file for repaye with stub year income. Your monthly payment should be like $350ish (I think, ballpark). HALF of Your monthly interest accrued above your payment (350) will be paid by the fed gov. Eg you accrue 1k interest per month on 200k of debt (6%), that means 650 of accrued interest is not paid. Gov knocks your interest down 325. You make a payment beyond your loan requirement to whatever your hearts desire in addition. Over the course of the year, your 12k in interest (6%) has been subsidized by the fed gov to the tune of $3900 (1.95%) making your effective interest rate (4.05%). Now what does FRB really have on you?!?!

This is the strategy I did out of law school. Due to some shit, I’ve not saved anything yet. And having watched my loan balance increase from like 175 to 190k, I’m confronted with whether I should refinance now and start hitting the loans hard. House/marriage/kids/SAHM aren’t concepts i thought about when i graduated but they’re a lot scarier now.

My PAYE payments will still be less than interest growth for 1 more year.
2018 PAYEment:$570/mo
2019: $800
2020: $1055
Loans: 190k at 6.55% with 17 years to go.
Forgiveness with 5% wage growth? ~$75k.
Total payments: $285k plus $25k bomb= $310k.

Monthly take home after tax & rent: $6k
10 year refi(4.875): $240k

I think you ignore the interest component when determining federal loan growth?
If so, quick math would show that $600 vs $2000/month refi’d would cost me about $16800 and yield $17300 difference in total loan balance. Assuming I can be good and bank that, that’s only a 3% savings on my money for next year. So I need to guarantee 3.6% return on investment to do better than refi. That seems reasonable, so I need to stomach this shit out and just trust PAYE for at least another year. But it’s hard. Being 38 with $170k worth of student loan debt is going to feel pretty bad. Obviously, the goal is to have slightly more than that in the bank tho. Just a lot of discipline.

Just my data points for this thread. And my math is probably wrong.


i think your math is roughly right. another thing to consider if you are 38 years old: federal loans are completely forgiven if you die. refi-ed loans are not. while there is like a 2.5% chance you die in the next 17 years, thats another 4k+ in the calculation for fed loans. finally, gotta look at the timing of the payments. the fedloan is backloaded, which minimizes the present value of that total. and, what happens if you get shitcanned or WANT to do something lower paying? you wont be golden handcuffed.

i think PAYE is pretty clear here.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Tue Apr 17, 2018 9:19 am

Does anyone have a good excel formula for approximating federal loan growth, accounting for the no capitalization idea?
I had used something like:
pmt(blendrate/12, months, payment, -principal) + accrued interest.
But the payment actually should go exclusively to interest right?
Do you need to basically setup an if statement whereby the formula changes once you start making payments on the principal?

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Re: Student loan payments: get advice and actual numbers here

Postby boredtodeath » Tue Apr 17, 2018 1:20 pm

Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:Would appreciate feedback on my current repayment plan. Just finished my exit counseling and did some calculations, repayment begins in January 2019. I plan on using the 3 months or so i'll be working this year to try and pay back most of my advance, put together a bit of a rainy day fund, etc.

Debt: 170k (i'd like to note that this is 5k higher than my original estimate, despite doing a 1L SA and making around 20k as a 3L. Part of that is due to undergrad loans I thought were getting paid off, most of it is due to wildly underestimating living expenses. Professional wardrobes, dope vacations and dating are expensive.)
Interest rates: Average 6%
Income: 180k (NY Biglaw)

The plan:

According to Paycheck city, I will be bringing in $8,438 a month after taxes and assuming tax free contribution of $1,500 per month to a 401(k).

Rent: 2k (living with a roommate somewhere not particularly cool, hoping to keep this under 2k)
Loans: 3k
Living Expenses: 2k (I think I can stick to this, I spent less than $500 a week as a summer and I was absolutely out of control.)
Clothes/Furniture/Vacation Fund: $500

This leaves me with $938 bucks a month. Some of that will go to healthcare (not sure how much the contribution is), but I should have some money to play around with every month.

I will probably use a decent chunk of my bonus on vacation, hopefully I will make it a few years and can sink some of those meatier bonuses into loans.

Does this make sense? I'm pretty bummed about having so much debt, but even living in NY it seems like i'll do alright. I obviously won't be living with a roommate in Murray Hill or wherever for very long, but I think any ramp-up in cost of living will be more than matched by salary increases. IF anyone has thoughts, i'd appreciate feedback.


If you don't plan on ever working for the govt you should absolutely refinance your loans. You can get that monthly payment under $2k.


Yeah, I plan on doing that. I’m a little leery because my school has an awesome loan repayment program that is a great insurance policy, but if I feel comfortable after 1 year I’ll refinance. Hoping to get my credit score into the 800s in the mean time.


How is your monthly payment $3k on $170k worth of loans? That's much higher than the 10 year standard repayment plan. Before I refi'd my monthly payment was about $3k on $300k worth of loans on the 10 year repayment plan. Something is off here.

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Re: Student loan payments: get advice and actual numbers here

Postby boredtodeath » Tue Apr 17, 2018 1:26 pm

Anonymous User wrote:Does anyone have a good excel formula for approximating federal loan growth, accounting for the no capitalization idea?
I had used something like:
pmt(blendrate/12, months, payment, -principal) + accrued interest.
But the payment actually should go exclusively to interest right?
Do you need to basically setup an if statement whereby the formula changes once you start making payments on the principal?


Are you talking about in an income-based repayment scenario where your payments are not covering interest? Student Loan Hero has good calculators that show total amount paid/total amount forgiven/etc on these plans: https://studentloanhero.com/calculators ... alculator/

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Tue Apr 17, 2018 2:09 pm

That calculator doesn’t let me distinguish between principal and accrued interest though. It also doesn’t allow me to modify the number of payments remaining or estimate my loan balance at specific points in time.

I’m trying to create an excel formula that calculates my future student loan balance accounting for the no accrual on interest rule.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Tue Apr 17, 2018 7:26 pm

boredtodeath wrote:
Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:Would appreciate feedback on my current repayment plan. Just finished my exit counseling and did some calculations, repayment begins in January 2019. I plan on using the 3 months or so i'll be working this year to try and pay back most of my advance, put together a bit of a rainy day fund, etc.

Debt: 170k (i'd like to note that this is 5k higher than my original estimate, despite doing a 1L SA and making around 20k as a 3L. Part of that is due to undergrad loans I thought were getting paid off, most of it is due to wildly underestimating living expenses. Professional wardrobes, dope vacations and dating are expensive.)
Interest rates: Average 6%
Income: 180k (NY Biglaw)

The plan:

According to Paycheck city, I will be bringing in $8,438 a month after taxes and assuming tax free contribution of $1,500 per month to a 401(k).

Rent: 2k (living with a roommate somewhere not particularly cool, hoping to keep this under 2k)
Loans: 3k
Living Expenses: 2k (I think I can stick to this, I spent less than $500 a week as a summer and I was absolutely out of control.)
Clothes/Furniture/Vacation Fund: $500

This leaves me with $938 bucks a month. Some of that will go to healthcare (not sure how much the contribution is), but I should have some money to play around with every month.

I will probably use a decent chunk of my bonus on vacation, hopefully I will make it a few years and can sink some of those meatier bonuses into loans.

Does this make sense? I'm pretty bummed about having so much debt, but even living in NY it seems like i'll do alright. I obviously won't be living with a roommate in Murray Hill or wherever for very long, but I think any ramp-up in cost of living will be more than matched by salary increases. IF anyone has thoughts, i'd appreciate feedback.


If you don't plan on ever working for the govt you should absolutely refinance your loans. You can get that monthly payment under $2k.


Yeah, I plan on doing that. I’m a little leery because my school has an awesome loan repayment program that is a great insurance policy, but if I feel comfortable after 1 year I’ll refinance. Hoping to get my credit score into the 800s in the mean time.


How is your monthly payment $3k on $170k worth of loans? That's much higher than the 10 year standard repayment plan. Before I refi'd my monthly payment was about $3k on $300k worth of loans on the 10 year repayment plan. Something is off here.


To clarify, I plan on sinking 3k a month into loans, which is in excess of my 10 year payment plan. Would rather kill that debt ASAP before I have to start worrying about starting a family.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Sun Apr 29, 2018 11:25 am

I’m currently on REPAYE and I am not eligible for PAYE. My soon-to-be spouse makes $75k and I make $120k. He has no loans but I have $200k+. I’m working for the federal government and have 8 years left for PSLF. Looking at calculators, it seems I have two options to keep my payments down: (1) don’t get married and keep the benefit of 10% payments on REPAYE; or (2) switch to IBR after getting married and file separately so I only pay 15%. With REPAYE’s marriage penalty I don’t see another option. Am I missing something here?

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Re: Student loan payments: get advice and actual numbers here

Postby Johann » Sun Apr 29, 2018 7:08 pm

Anonymous User wrote:I’m currently on REPAYE and I am not eligible for PAYE. My soon-to-be spouse makes $75k and I make $120k. He has no loans but I have $200k+. I’m working for the federal government and have 8 years left for PSLF. Looking at calculators, it seems I have two options to keep my payments down: (1) don’t get married and keep the benefit of 10% payments on REPAYE; or (2) switch to IBR after getting married and file separately so I only pay 15%. With REPAYE’s marriage penalty I don’t see another option. Am I missing something here?

yeah youve identified the 2 possible options. just make sure your math is really good on finding the best option because there's the 5% of AGI difference, also a difference poverty limit for household of 2 people that REPAYE uses, also tax penalties if you file separately like can't deeduct student loan interest (not sure youd qualify anyways with household income would be tight depending on income deferred)

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Sun Apr 29, 2018 9:15 pm

Johann wrote:
Anonymous User wrote:I’m currently on REPAYE and I am not eligible for PAYE. My soon-to-be spouse makes $75k and I make $120k. He has no loans but I have $200k+. I’m working for the federal government and have 8 years left for PSLF. Looking at calculators, it seems I have two options to keep my payments down: (1) don’t get married and keep the benefit of 10% payments on REPAYE; or (2) switch to IBR after getting married and file separately so I only pay 15%. With REPAYE’s marriage penalty I don’t see another option. Am I missing something here?

yeah youve identified the 2 possible options. just make sure your math is really good on finding the best option because there's the 5% of AGI difference, also a difference poverty limit for household of 2 people that REPAYE uses, also tax penalties if you file separately like can't deeduct student loan interest (not sure youd qualify anyways with household income would be tight depending on income deferred)


We also have no children. All of the calculations I’ve done seem to show that being married costs us on the low end at least $3,300 more per year than not being married. It’s making us consider just holding off on legally getting married for another 8 years, which is so ridiculous. IBR filing separately costs about $300 more per month. REPAYE cost about $600 more per month. Unless I’m missing something, I don’t think including my spouse on federal benefits is with $300/m.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Tue Jun 19, 2018 2:11 pm

Wish I found this post sooner. I appreciate any advice as I am in my early 40s so I don't have the same time to make things up as others do.

Graduated: 2017 - in house corporate attorney
Debt: 85k (includes about $14K from undergrad).
Payments: $950
Plan: 10 year (standard loan - 5.8 - 6.3%)
Income: $145K + 25-35% annual bonus ($35 - $45K). Expect 4-5% yearly merit raises with promotion potential
Mortgage: $1450 - 20 years left (owe $195K with about $105K equity)
Other Debt: $20K auto loan (1.9%) + $3-5K credit card debt (0% - appliances/household)

Middle aged, married, kids, and horrible with finances earlier on in life so catching up. Some of you on here are WAY smarter than I was at a young age - way to go! $350K in 401K with 12% contribution rates (4% company match plus 5-7% annual discretionary deposit). I plan on upping the 401K contribution 1% each year up to maximum. No real savings to speak of other than the 401K (fully vested). No college savings for kids (yeah I know - bad). We live in an affordable small town market so cost of living is cheap but kids are expensive and approaching teenage years.

So - is it better to knock out the student loans or look to invest more? If I can get 10% return on investment that is better than paying down a 6% interest loan - right? However, I worry that the market is heading towards a downturn at some point so I worry about putting too much into the market because I am exposed on my 401K. Thought about real estate too. I never really had money before to worry about investing so I am just starting to look at this. Luckily, we were so bad with our money we never got used to any of the finer things in life but I would like to travel more. I make a good living, but do not feel as though I do. My work-life balance is great though, low stress job after finishing law school.

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courtneylove

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Re: Student loan payments: get advice and actual numbers here

Postby courtneylove » Wed Jun 27, 2018 4:25 pm

Anonymous User wrote:
So - is it better to knock out the student loans or look to invest more? If I can get 10% return on investment that is better than paying down a 6% interest loan - right? However, I worry that the market is heading towards a downturn at some point so I worry about putting too much into the market because I am exposed on my 401K. Thought about real estate too. I never really had money before to worry about investing so I am just starting to look at this. Luckily, we were so bad with our money we never got used to any of the finer things in life but I would like to travel more. I make a good living, but do not feel as though I do. My work-life balance is great though, low stress job after finishing law school.



Knock out the credit card debt before anything else. You can refinance your student loans and get a lower rate... if you get your interest rate under 5% it would make more sense to invest, rather than paying them down quickly. 5.8-6% is high, especially considering how much greater your annual income is than your total loan balance. Try using Credible to see what rates are available to you. If you live in an area served by First Republic Bank they have great student loan refi rates too. You should read through other threads on this board... lots of advice on loan refinancing. I used TLS's advice to refi mine last year.

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Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Jul 16, 2018 2:38 pm

Graduated: 2017 - corporate associate in biglaw
Debt: 300k
Payments: $2090
Plan: 20 year (Earnest)
Income: $190k + $15k bonus (Cravath scale firm)

No credit card debt, still renting. Wife has no student loans or any debt.

Anonymous User
Posts: 316621
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Jul 16, 2018 2:41 pm

courtneylove wrote:
Anonymous User wrote:
So - is it better to knock out the student loans or look to invest more? If I can get 10% return on investment that is better than paying down a 6% interest loan - right? However, I worry that the market is heading towards a downturn at some point so I worry about putting too much into the market because I am exposed on my 401K. Thought about real estate too. I never really had money before to worry about investing so I am just starting to look at this. Luckily, we were so bad with our money we never got used to any of the finer things in life but I would like to travel more. I make a good living, but do not feel as though I do. My work-life balance is great though, low stress job after finishing law school.



Knock out the credit card debt before anything else. You can refinance your student loans and get a lower rate... if you get your interest rate under 5% it would make more sense to invest, rather than paying them down quickly. 5.8-6% is high, especially considering how much greater your annual income is than your total loan balance. Try using Credible to see what rates are available to you. If you live in an area served by First Republic Bank they have great student loan refi rates too. You should read through other threads on this board... lots of advice on loan refinancing. I used TLS's advice to refi mine last year.


Ummm, no don't do credit card debt first. This isn't normal credit card debt, it's interest free (probably for 18-30 months as part of signing up for a store credit card like Home Depot or something). Just make sure to pay it off before it starts accruing interest. Until then, 0% financing is free money.

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boredtodeath

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Re: Student loan payments: get advice and actual numbers here

Postby boredtodeath » Mon Jul 16, 2018 5:22 pm

Anonymous User wrote:Graduated: 2017 - corporate associate in biglaw
Debt: 300k
Payments: $2090
Plan: 20 year (Earnest)
Income: $190k + $15k bonus (Cravath scale firm)

No credit card debt, still renting. Wife has no student loans or any debt.


We're in a similar position. Why did you decide to refinance so soon, if you don't mind my asking? I refi'd the same amount with FRB and partly regret it.

Anonymous User
Posts: 316621
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Jul 16, 2018 5:33 pm

boredtodeath wrote:
Anonymous User wrote:Graduated: 2017 - corporate associate in biglaw
Debt: 300k
Payments: $2090
Plan: 20 year (Earnest)
Income: $190k + $15k bonus (Cravath scale firm)

No credit card debt, still renting. Wife has no student loans or any debt.


We're in a similar position. Why did you decide to refinance so soon, if you don't mind my asking? I refi'd the same amount with FRB and partly regret it.


Anon you quoted. I decided to refi because otherwise my student loan payments would be about $4k/month, and at a much higher interest rate. I can still pay $4k a month if I wanted to, my interest rate is just a handful of points lower.



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