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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Johann

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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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boredtodeath

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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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boredtodeath

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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.

Anonymous User
Posts: 309268
Joined: Tue Aug 11, 2009 9:32 am

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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