Student loan payments: Actual numbers

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Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Thu Apr 09, 2015 5:56 pm

Wow I am blown away by the COL in the NYC/DC/Cali markets. Those prices are unreal for an apartment.

Looking for a little budgeting advice.

I will have to begin paying my student loans next month. My balance is absurdly high (something like $250K total ugrad and law) but I am working a public sector job making around 73K ($3,600 a month net) in one of Atlanta, Charlotte, Dallas, Houston and my rent for my 1BR apt in a nice area very near public transit is $925 before utilities. I'm on IBR and I will look into my school's LRAP but I think my salary is basically too high. I cannot do PAYE but I am on IBR. Right now the Feds are telling me I will have to pay a little under $600 a month; I also have a car payment of around $360 a month. Car insurance is over $100 a month. Obviously I'm on PLSF but I am wondering if there is anything else I can (or should be) doing to tackle my student loan debt. I've heard people on here suggest things like specific sorts of investments and the like but I am not very knowledgeable about that sort of thing. Any advice is appreciated.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Thu Apr 09, 2015 6:07 pm

Anonymous User wrote:Wow I am blown away by the COL in the NYC/DC/Cali markets. Those prices are unreal for an apartment.

Looking for a little budgeting advice.

I will have to begin paying my student loans next month. My balance is absurdly high (something like $250K total ugrad and law) but I am working a public sector job making around 73K ($3,600 a month net) in one of Atlanta, Charlotte, Dallas, Houston and my rent for my 1BR apt in a nice area very near public transit is $925 before utilities. I'm on IBR and I will look into my school's LRAP but I think my salary is basically too high. I cannot do PAYE but I am on IBR. Right now the Feds are telling me I will have to pay a little under $600 a month; I also have a car payment of around $360 a month. Car insurance is over $100 a month. Obviously I'm on PLSF but I am wondering if there is anything else I can (or should be) doing to tackle my student loan debt. I've heard people on here suggest things like specific sorts of investments and the like but I am not very knowledgeable about that sort of thing. Any advice is appreciated.

If you're going to get your loans forgiven tax free with PSLF there's no reason to be worried about reducing your debt. If you want to reduce your IBR payments you'll need to reduce your Adjusted Gross Income. The most common way to do this is through pre-tax retirement contributions to either an IRA, an employer plan (in your case probably the TSP or 403(b)) or both.

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SemperLegal
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Re: Student loan payments: Actual numbers

Postby SemperLegal » Thu Apr 09, 2015 6:07 pm

Anonymous User wrote:
I know people with ~700 sf apartments with rent about $4166. Mine's about 2500 but is going up 10% with rent increases.

That's why I'm complaining about MFH COL. It's nuts. It's impossible to find a decent apartment (500 or more sf, within 1 hr of the MFH office) for less than 2k.


Just a heads up, all of these stops inside the red line have less than an hour commute to NYC. I pay 1750 for a two-"bedroom" (ones really an office) with parking in a high rise seconds from the train.


Image

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Re: Student loan payments: Actual numbers

Postby JasonSehorn » Thu Apr 09, 2015 6:20 pm

[quote="SemperLegal"][quote="Anonymous User"]

I know people with ~700 sf apartments with rent about $4166. Mine's about 2500 but is going up 10% with rent increases.

That's why I'm complaining about MFH COL. It's nuts. It's impossible to find a decent apartment (500 or more sf, [b]within 1 hr of the MFH office[/b]) for less than 2k.[/quote]

Just a heads up, all of these stops inside the red line have less than an hour commute to NYC. I pay 1750 for a two-"bedroom" (ones really an office) with parking in a high rise seconds from the train.


[img]http://i.imgur.com/A5rkSZ9m.jpg[/img][/quote]

This may be off topic but I have a question you could probably answer. Going to be starting in NYC in the fall and have a very large loan debt to pay off. Do you save money by livin that far outside of Manhattan with the added transportation costs?

exitoptions
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Re: Student loan payments: Actual numbers

Postby exitoptions » Thu Apr 09, 2015 6:28 pm

JasonSehorn wrote:
SemperLegal wrote:
Anonymous User wrote:
I know people with ~700 sf apartments with rent about $4166. Mine's about 2500 but is going up 10% with rent increases.

That's why I'm complaining about MFH COL. It's nuts. It's impossible to find a decent apartment (500 or more sf, within 1 hr of the MFH office) for less than 2k.


Just a heads up, all of these stops inside the red line have less than an hour commute to NYC. I pay 1750 for a two-"bedroom" (ones really an office) with parking in a high rise seconds from the train.


Image


This may be off topic but I have a question you could probably answer. Going to be starting in NYC in the fall and have a very large loan debt to pay off. Do you save money by livin that far outside of Manhattan with the added transportation costs?


If your office is in midtown, where most firms are, you will not pay much more than a monthly subway pass to take NJT in. The PATH monthly is actually around $20 less than a subway monthly. So yes, you will save a ton of money living in North Jersey. There are still parts of Jersey City that come in a couple grand less than a similar size apartment in Manhattan or Brooklyn. Queens is also a good option if you prefer the other side of the river.

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SemperLegal
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Re: Student loan payments: Actual numbers

Postby SemperLegal » Thu Apr 09, 2015 6:32 pm

JasonSehorn wrote:
SemperLegal wrote:
Anonymous User wrote:
I know people with ~700 sf apartments with rent about $4166. Mine's about 2500 but is going up 10% with rent increases.

That's why I'm complaining about MFH COL. It's nuts. It's impossible to find a decent apartment (500 or more sf, within 1 hr of the MFH office) for less than 2k.


Just a heads up, all of these stops inside the red line have less than an hour commute to NYC. I pay 1750 for a two-"bedroom" (ones really an office) with parking in a high rise seconds from the train.


Image


This may be off topic but I have a question you could probably answer. Going to be starting in NYC in the fall and have a very large loan debt to pay off. Do you save money by livin that far outside of Manhattan with the added transportation costs?


Maybe, but only because you avoid city tax, might be able to pay for your train ticket with pretax dollars ($100-250 for a monthly). Also, your location in MFH matters (can you walk from Penn Station/Port Authority?), as well as your firm's black car policy (NJ transit trains and some buses become very infrequent after 2am).

A terrific apartment in a safe, decent area can be around 1.5k, but your social life is going to take a huge hit because in NJ you can be safe, fun, or cheap, pick two. Additional savings will be from a much lower cost of food/clothes/entertainment.

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lhanvt13
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Re: Student loan payments: Actual numbers

Postby lhanvt13 » Thu Apr 09, 2015 6:36 pm

Tiago Splitter wrote:
lhanvt13 wrote:I'll have around 220k debt when I graduate. Would it be better to ask my wife for assistance in repaying so I can pay off ASAP or should I just ride out min payments and take the tax bomb? Sorry, I don't know anything about taxes or loan repayments... Our combined income will be ~ 375k.

You're going to get crushed on PAYE (and may not even qualify) unless you file separately which may not even work depending your situation. Assuming you have no intention of going into government or non-profit work you're probably best off just refinancing to get the lowest rate possible.

ah I see.. Thanks for the info. I guess I'll refinance and also try to pay off asap.
JohannDeMann wrote:
lhanvt13 wrote:I'll have around 220k debt when I graduate. Would it be better to ask my wife for assistance in repaying so I can pay off ASAP or should I just ride out min payments and take the tax bomb? Sorry, I don't know anything about taxes or loan repayments... Our combined income will be ~ 375k.


uhhhhhhh you would never have a tax bomb in this situation...

?? I'm not sure I understand

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Thu Apr 09, 2015 6:40 pm

Johann is saying you'll have to pay so much under PAYE you will end up paying off the debt before anything is forgiven after 20 years.

exitoptions
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Re: Student loan payments: Actual numbers

Postby exitoptions » Thu Apr 09, 2015 6:50 pm

lhanvt13 wrote:
Tiago Splitter wrote:
lhanvt13 wrote:I'll have around 220k debt when I graduate. Would it be better to ask my wife for assistance in repaying so I can pay off ASAP or should I just ride out min payments and take the tax bomb? Sorry, I don't know anything about taxes or loan repayments... Our combined income will be ~ 375k.

You're going to get crushed on PAYE (and may not even qualify) unless you file separately which may not even work depending your situation. Assuming you have no intention of going into government or non-profit work you're probably best off just refinancing to get the lowest rate possible.

ah I see.. Thanks for the info. I guess I'll refinance and also try to pay off asap.
JohannDeMann wrote:
lhanvt13 wrote:I'll have around 220k debt when I graduate. Would it be better to ask my wife for assistance in repaying so I can pay off ASAP or should I just ride out min payments and take the tax bomb? Sorry, I don't know anything about taxes or loan repayments... Our combined income will be ~ 375k.


uhhhhhhh you would never have a tax bomb in this situation...

?? I'm not sure I understand


I suppose it's technically possible for you to get forgiveness if you have a very low income and your wife has a very high income. You would have to file separately and you could keep your payments low. Your wife would lose a ton of money filing separately though, so she would effectively be subsidizing your loans anyway. But, if you're making six figures, you are going to end up paying your debt off before the forgiveness period becomes effective. So in that situation you should refinance and pay off as quickly as you can (unless you can invest at a higher average rate of return).

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lhanvt13
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Re: Student loan payments: Actual numbers

Postby lhanvt13 » Thu Apr 09, 2015 7:20 pm

Thanks for the reply guys. I'm sure I have a basic understanding now. In order to handle matters like this, should I go to an accountant or bank representative to find out what method would end up being the cheapest option for refinancing?

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Apr 10, 2015 12:39 pm

SemperLegal wrote:
JasonSehorn wrote:
SemperLegal wrote:
Anonymous User wrote:
I know people with ~700 sf apartments with rent about $4166. Mine's about 2500 but is going up 10% with rent increases.

That's why I'm complaining about MFH COL. It's nuts. It's impossible to find a decent apartment (500 or more sf, within 1 hr of the MFH office) for less than 2k.


Just a heads up, all of these stops inside the red line have less than an hour commute to NYC. I pay 1750 for a two-"bedroom" (ones really an office) with parking in a high rise seconds from the train.


Image


This may be off topic but I have a question you could probably answer. Going to be starting in NYC in the fall and have a very large loan debt to pay off. Do you save money by livin that far outside of Manhattan with the added transportation costs?


Maybe, but only because you avoid city tax, might be able to pay for your train ticket with pretax dollars ($100-250 for a monthly). Also, your location in MFH matters (can you walk from Penn Station/Port Authority?), as well as your firm's black car policy (NJ transit trains and some buses become very infrequent after 2am).

A terrific apartment in a safe, decent area can be around 1.5k, but your social life is going to take a huge hit because in NJ you can be safe, fun, or cheap, pick two. Additional savings will be from a much lower cost of food/clothes/entertainment.


Sameanon -- TYFT. Already live in Jersey City but the PATH train sucks -- packed shoulder to shoulder at all times, smells bad (lots of body odor/curry), only getting busier with all the new high rises. Will probably just move out and take the train -- just sucks that with the walk/drive to train and walk/subway to office, I'm looking at minimum 70 minute commute each day.

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Stringer6
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Re: Student loan payments: Actual numbers

Postby Stringer6 » Fri Apr 10, 2015 1:11 pm

SemperLegal wrote:
Anonymous User wrote:
I know people with ~700 sf apartments with rent about $4166. Mine's about 2500 but is going up 10% with rent increases.

That's why I'm complaining about MFH COL. It's nuts. It's impossible to find a decent apartment (500 or more sf, within 1 hr of the MFH office) for less than 2k.


Just a heads up, all of these stops inside the red line have less than an hour commute to NYC. I pay 1750 for a two-"bedroom" (ones really an office) with parking in a high rise seconds from the train.


Image


yea i have a huge 1br for 1550. 50 minutes to midtown.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Fri Apr 10, 2015 1:17 pm

LOL at us for living in a place where a $1500 1 br with a 2 hour daily commute is a good deal.

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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Fri Apr 10, 2015 1:20 pm

lhanvt13 wrote:Thanks for the reply guys. I'm sure I have a basic understanding now. In order to handle matters like this, should I go to an accountant or bank representative to find out what method would end up being the cheapest option for refinancing?


You should prolly just shop your refi rate against SoFi, DRB and commonbond. Most people in this thread use SoFi.

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Re: Student loan payments: Actual numbers

Postby XxSpyKEx » Fri Apr 10, 2015 2:24 pm

JenDarby wrote:LOL at us for living in a place where a $1500 1 br with a 2 hour daily commute is a good deal.


It's funny, because you can get a really nice 1 bedroom apartment in an amazing part of downtown Chicago for $1,500 /month. Chicago's not as large as NYC, but it's cleaner, a shitload less crowded, and has almost all the big city living shit that NYC does. Frankly, if you're talking about living an hour away from NYC anyways, you're getting a much higher QOL by living in Chicago. The only thing that sucks is that the legal market in Chicago is really small relative to the size of the city, so it's hard to break into for people who don't have ties here.
Last edited by XxSpyKEx on Fri Apr 10, 2015 2:26 pm, edited 1 time in total.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Fri Apr 10, 2015 2:26 pm

XxSpyKEx wrote:
JenDarby wrote:LOL at us for living in a place where a $1500 1 br with a 2 hour daily commute is a good deal.


It's funny, because you can get a really nice 1 bedroom apartment in an amazing part of downtown Chicago for $1,500 /month. Chicago's not as large as NYC, but it's cleaner, a shitload less crowded, and has almost all the big city living shit that NYC does. Frankly, if you're talking about living an hour away from NYC anyways, you're getting a much higher QOL by living within Chicago. The only thing that sucks is that the legal market in Chicago is really small relative to the size of the city, so it's hard to break into for people who don't have ties here.


also the weather is even shittier. nbd.

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Re: Student loan payments: Actual numbers

Postby XxSpyKEx » Fri Apr 10, 2015 2:29 pm

Old Gregg wrote:
XxSpyKEx wrote:
JenDarby wrote:LOL at us for living in a place where a $1500 1 br with a 2 hour daily commute is a good deal.


It's funny, because you can get a really nice 1 bedroom apartment in an amazing part of downtown Chicago for $1,500 /month. Chicago's not as large as NYC, but it's cleaner, a shitload less crowded, and has almost all the big city living shit that NYC does. Frankly, if you're talking about living an hour away from NYC anyways, you're getting a much higher QOL by living within Chicago. The only thing that sucks is that the legal market in Chicago is really small relative to the size of the city, so it's hard to break into for people who don't have ties here.


also the weather is even shittier. nbd.


Meh. I think NYC weather was worse this past winter than Chicago (oddly). Overall, winters suck in both places, so not really a good factor to spend 2-3 times as much to live in NYC for. Paying more to live in SoCal or Hawaii would be understandable.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Fri Apr 10, 2015 3:27 pm

XxSpyKEx wrote:
Old Gregg wrote:
XxSpyKEx wrote:
JenDarby wrote:LOL at us for living in a place where a $1500 1 br with a 2 hour daily commute is a good deal.


It's funny, because you can get a really nice 1 bedroom apartment in an amazing part of downtown Chicago for $1,500 /month. Chicago's not as large as NYC, but it's cleaner, a shitload less crowded, and has almost all the big city living shit that NYC does. Frankly, if you're talking about living an hour away from NYC anyways, you're getting a much higher QOL by living within Chicago. The only thing that sucks is that the legal market in Chicago is really small relative to the size of the city, so it's hard to break into for people who don't have ties here.


also the weather is even shittier. nbd.


Meh. I think NYC weather was worse this past winter than Chicago (oddly). Overall, winters suck in both places, so not really a good factor to spend 2-3 times as much to live in NYC for. Paying more to live in SoCal or Hawaii would be understandable.


agreed. i think nyc in general is a shithole. loving my waterless california

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Re: Student loan payments: Actual numbers

Postby wildhaggis » Fri Apr 10, 2015 4:08 pm

This is going to be slightly off-topic, but does relate directly to the tax bomb issue and, as a consequence, student loan payments under IBR/PAYE.

First of all, please forgive the ignorance that will surely be on display in the following sentences. My question is pretty simple: why is student loan debt *not* considered what is, effectively, a bubble? As we all know, a popular headline for large publications over the past few years has been the occurrence of aggregate student loan debt surpassing some other form of consumer debt in the aggregate (i.e. credit card debt, auto debt, whatever). This always leads to talk of a student loan bubble due to debt ballooning beyond debtors' ability pay, which, in turn, leads to even more discussion on why student loan debt isn't a bubble. I understand the basic logic behind why student loan debt isn't a bubble - basically, flexible payment terms prevent absolute insolvency or default, meaning the bubble will never "pop."

All that said, I'm not sure that this is the case. Doesn't this have to blow up at some point? I mean, if the argument is that IBR/PAYE (used by an exponentially growing number of debtors) prevent a bubble or crash situation through low payment terms, then what of tax liability brought about by forgiveness of debt subject to high interest rates and low monthly payments (resulting in ballooning balances) being treated as income? Of course, you are only taxed to the extent of your solvency, but to the extent a debtor has amassed assets in pre-forgiveness, we are looking at debtors selling their homes (if there is equity in the home), cashing out retirement accounts (which, in turn, could incur additional tax penalty), or withdrawing cash funds from bank accounts to satisfy a potentially immense IRS bill, not to mention wage garnishment. If a great deal of IBR/PAYE debtors are forgiven en masse due to the forgiveness time table, won't we see a great deal of this type of asset sell-off or financial institution withdrawal happening all at once to pay taxes? Wouldn't this technically have a "bubble" or crash effect?

Of course, this also ignores potential market sluggishness brought about by debtors using income to service high interest rate student loans or declining to acquire assets due to their inevitable liquidation upon debt forgiveness.

Please feel free to let me know that I have no clue what the fuck I'm talking about. I understand the term bubble is used loosely nowadays, but I think my idea is conveyed relatively coherently. Perhaps I haven't given this enough thought, but I'm genuinely curious and too time-pressed at work to do anything other than throw my inquiry up on TLS.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Fri Apr 10, 2015 4:20 pm

The average student loan debt is like 30k. We're in a different kind of "bubble" when we talk about law school debt but for the vast majority of student borrowers the numbers are much less than what we're talking about here.

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strodriguez3
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Re: Student loan payments: Actual numbers

Postby strodriguez3 » Fri Apr 10, 2015 4:25 pm

0L appreciating the hell out of this.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Fri Apr 10, 2015 6:34 pm

Tiago Splitter wrote:The average student loan debt is like 30k. We're in a different kind of "bubble" when we talk about law school debt but for the vast majority of student borrowers the numbers are much less than what we're talking about here.


yes... but average starting salary is far lower than $160k, so while absolute numbers might not be that high, they are still high as a proportion of what people are making.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Fri Apr 10, 2015 6:36 pm

Old Gregg wrote:
Tiago Splitter wrote:The average student loan debt is like 30k. We're in a different kind of "bubble" when we talk about law school debt but for the vast majority of student borrowers the numbers are much less than what we're talking about here.


yes... but average starting salary is far lower than $160k, so while absolute numbers might not be that high, they are still high as a proportion of what people are making.

The numbers are high but not disaster-inducing when forgiven 20 years later. My only point is that I don't foresee the kind of panic selling to pay off the debt forgiveness tax bill that concerned the other guy.

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Stringer6
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Re: Student loan payments: Actual numbers

Postby Stringer6 » Sat Apr 11, 2015 9:53 am

XxSpyKEx wrote:
JenDarby wrote:LOL at us for living in a place where a $1500 1 br with a 2 hour daily commute is a good deal.


It's funny, because you can get a really nice 1 bedroom apartment in an amazing part of downtown Chicago for $1,500 /month. Chicago's not as large as NYC, but it's cleaner, a shitload less crowded, and has almost all the big city living shit that NYC does. Frankly, if you're talking about living an hour away from NYC anyways, you're getting a much higher QOL by living in Chicago. The only thing that sucks is that the legal market in Chicago is really small relative to the size of the city, so it's hard to break into for people who don't have ties here.


That thing about the legal market is kind of a big deal

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Sat Apr 11, 2015 9:57 am

i think the chicago market being hard to break into thing is kind of overblown. just IME and from former classmates I know who went there.

that said, tons of my former classmates who ended up working in chicago now find themselves in the bay area.




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