Student loan payments: Actual numbers

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2014
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Re: Student loan payments: Actual numbers

Postby 2014 » Tue Apr 28, 2015 5:01 pm

Assuming a roughly 2% difference (like 3.5 vs 5.5) does anyone smarter than I have an opinion on variable vs fixed for refi-ing my D rated traunch of steaming grad plus debt?

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lacrossebrother
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Re: Student loan payments: Actual numbers

Postby lacrossebrother » Tue Apr 28, 2015 5:23 pm

Why is your debt d tranche--are you unemployed? Why refi

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2014
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Re: Student loan payments: Actual numbers

Postby 2014 » Tue Apr 28, 2015 5:28 pm

Fair point, let's call it like CCC. Firm job but with a not ideal debt to income ratio.

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lacrossebrother
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Re: Student loan payments: Actual numbers

Postby lacrossebrother » Tue Apr 28, 2015 5:31 pm

Do paye then

rtb2008x
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Re: Student loan payments: Actual numbers

Postby rtb2008x » Wed Apr 29, 2015 6:47 pm

If I owe about $200k in loans,
and I plan to utilize PSLF doing gov. work for 10 years,
can I also use the IBR? And just pay based on my salary?? (salary = ~$50k)

It seems odd because on the 10-yr. Standard Plan I'd be paying back $200k+
But with IBR, I'd only have to pay back like half of that within 10 years?

Is this correct?

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Wed Apr 29, 2015 6:49 pm

rtb2008x wrote:If I owe about $200k in loans,
and I plan to utilize PSLF doing gov. work for 10 years,
can I also use the IBR? And just pay based on my salary?? (salary = ~$50k)

It seems odd because on the 10-yr. Standard Plan I'd be paying back $200k+
But with IBR, I'd only have to pay back like half of that within 10 years?

Is this correct?

Yes anyone can do IBR or PAYE. Do PAYE if you are eligible (meaning no loans taken before October 2007.)

rtb2008x
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Re: Student loan payments: Actual numbers

Postby rtb2008x » Wed Apr 29, 2015 6:58 pm

Tiago Splitter wrote:
rtb2008x wrote:If I owe about $200k in loans,
and I plan to utilize PSLF doing gov. work for 10 years,
can I also use the IBR? And just pay based on my salary?? (salary = ~$50k)

It seems odd because on the 10-yr. Standard Plan I'd be paying back $200k+
But with IBR, I'd only have to pay back like half of that within 10 years?

Is this correct?

Yes anyone can do IBR or PAYE. Do PAYE if you are eligible (meaning no loans taken before October 2007.)



Thanks!

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XxSpyKEx
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Re: Student loan payments: Actual numbers

Postby XxSpyKEx » Wed Apr 29, 2015 7:51 pm

Tiago Splitter wrote:
rtb2008x wrote:If I owe about $200k in loans,
and I plan to utilize PSLF doing gov. work for 10 years,
can I also use the IBR? And just pay based on my salary?? (salary = ~$50k)

It seems odd because on the 10-yr. Standard Plan I'd be paying back $200k+
But with IBR, I'd only have to pay back like half of that within 10 years?

Is this correct?

Yes anyone can do IBR or PAYE. Do PAYE if you are eligible (meaning no loans taken before October 2007.)


Also need a final disbursement or consolidation after Oct. 1, 2011. Supposedly everyone will be allowed to go on PAYE at the end of this year under Obama's executive order. Heard that could result in getting hit with the PSLF cap of $57,500, but who really knows, they might just cap forgiveness for everyone at that amount, which would suck for people who have been doing PI for years with the plan to get PSLF.

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2014
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Re: Student loan payments: Actual numbers

Postby 2014 » Fri May 15, 2015 1:29 pm

Just did exit counseling, seems I am supposed to be making $400k or so to comfortably manage my debt load. I'll go ahead and just try harder I guess.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Fri May 15, 2015 3:24 pm

2014 wrote:Just did exit counseling, seems I am supposed to be making $400k or so to comfortably manage my debt load. I'll go ahead and just try harder I guess.


Much like everything in life, Paul Rudd in Forgetting Sarah Marshall has the secret - 1) Do less. You are doing too much. The less you do, the more you do. 2) When life gives you lemons, say fuck the lemons and bail.

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XxSpyKEx
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Re: Student loan payments: Actual numbers

Postby XxSpyKEx » Fri May 15, 2015 4:05 pm

JohannDeMann wrote:
2014 wrote:Just did exit counseling, seems I am supposed to be making $400k or so to comfortably manage my debt load. I'll go ahead and just try harder I guess.


Much like everything in life, Paul Rudd in Forgetting Sarah Marshall has the secret - 1) Do less. You are doing too much. The less you do, the more you do. 2) When life gives you lemons, say fuck the lemons and bail.


But what if you already got the lemon (otherwise known as a JD) and the federal government won't let you bail on the loans?!?

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Thu May 21, 2015 10:21 am

https://scontent-dfw1-1.xx.fbcdn.net/hp ... e=5560494F

Above is a breakdown of my loans. I'm getting 6k from the gov to pay off a chunk. TCR is to pay off the largest loan instead of the highest interest rate ones (that are smaller in amount), right?

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Thu May 21, 2015 10:46 am

Anonymous User wrote:https://scontent-dfw1-1.xx.fbcdn.net/hphotos-xta1/v/t34.0-12/11303641_10206646603353134_1978698213_n.jpg?oh=9340d3cbc52e4398658644047ae27124&oe=5560494F

Above is a breakdown of my loans. I'm getting 6k from the gov to pay off a chunk. TCR is to pay off the largest loan instead of the highest interest rate ones (that are smaller in amount), right?


No dude. Clear the 7.5% interest loans.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Thu May 21, 2015 1:04 pm

Even if the larger loans (with smaller interest rates) create more additional money than the smaller loans (with higher interest rates)?

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AVBucks4239
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Re: Student loan payments: Actual numbers

Postby AVBucks4239 » Thu May 21, 2015 1:13 pm

Anonymous User wrote:Even if the larger loans (with smaller interest rates) create more additional money than the smaller loans (with higher interest rates)?

Yes. I used to hold the same misconception as you (hey, this higher balance loan is accruing more total interest per month, let's pay that off), but that's not mathematically right.

The best way somebody explained it to me was to imagine that all of your loans are $1 loans. So instead of having a $21,840 loan at 6.55% and a $3,383 loan at 7.65%, imagine you have 21,840 $1 loans at 6.55% and 3,383 $1 loans at 7.65%. You get the best return by paying the loans with the higher rate.

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beach_terror
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Re: Student loan payments: Actual numbers

Postby beach_terror » Thu May 21, 2015 1:30 pm

... or you just look at it as paying interest vs principal. Paying $$ toward interest is wasted money.

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chiguy99
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Re: Student loan payments: Actual numbers

Postby chiguy99 » Fri May 22, 2015 1:47 pm

Debt: 164k
Salary: 50k w/ potential for much more but no guarantee (non-legal gig with payoff coming in yr3 and beyond (hopefully))

Correct me if I'm wrong, but doesn't it make most sense (not just for me but for most ppl) to take on a 25 yr plan (level or graduated) with super low monthly payments then apply extra directly to the Grad PLUS loans to eliminate those ASAP? This way you just knock off the top interest loans one-by-one instead of spreading one lump sum payment evenly across all your loans with varying interest rates.

I just cant seem to see why this wouldn't be more effective, but have some reservations for some reason. Thoughts?

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AVBucks4239
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Re: Student loan payments: Actual numbers

Postby AVBucks4239 » Fri May 22, 2015 2:03 pm

chiguy99 wrote:Debt: 164k
Salary: 50k w/ potential for much more but no guarantee (non-legal gig with payoff coming in yr3 and beyond (hopefully))

Correct me if I'm wrong, but doesn't it make most sense (not just for me but for most ppl) to take on a 25 yr plan (level or graduated) with super low monthly payments then apply extra directly to the Grad PLUS loans to eliminate those ASAP? This way you just knock off the top interest loans one-by-one instead of spreading one lump sum payment evenly across all your loans with varying interest rates.

I just cant seem to see why this wouldn't be more effective, but have some reservations for some reason. Thoughts?

Right idea, but you should apply for PAYE to have even lower payments in order to target the highest interest rate loans.

Also, not sure on what you're doing with your career, but you might want to build up liquidity/research paying off your loans more before you jump into the deep end and begin paying off your loans.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Fri May 22, 2015 2:03 pm

Yeah you could do that but you should do it under PAYE so that interest doesn't capitalize. Just PAYE.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Fri May 22, 2015 2:07 pm

JohannDeMann wrote:Yeah you could do that but you should do it under PAYE so that interest doesn't capitalize. Just PAYE.

If/once you no longer qualify as having financial hardship then interest does capitalize (topping out at 10% of initial loans). People never seem to mention this but should be aware, especially if they anticipate and do end up making far more and have any thoughts of paying off loans rather than riding it out for 20 years.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Fri May 22, 2015 2:29 pm

People never need to mention it because almost always you can qualify as having a financial hardship. I can be a non-equity partner at my firm and qualify for financial hardship.

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chiguy99
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Re: Student loan payments: Actual numbers

Postby chiguy99 » Sat May 23, 2015 11:31 am

Are the fin hardship calculations really that easy to fall into? I was initially thinking not PAYE for the very reason that I fully anticipate being out of fin hardship in yr 3, 4, 5 ... Def sometime before the yr 20. IF things go as planned, PAYE pmts will exceed an extended plan in just a couple yrs and 10% capitalization is a hard pill to swallow

Also- build up liquidity in what sense?
Last edited by chiguy99 on Sat May 23, 2015 11:37 am, edited 1 time in total.

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chiguy99
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Re: Student loan payments: Actual numbers

Postby chiguy99 » Sat May 23, 2015 11:35 am

Once again, this was all under the assumption fin hardship under PAYE is fairly easy to earn out of as one progresses in their non-pub interest job. If the whole partner in a firm comment has any validity, that changes things.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Sat May 23, 2015 11:43 am

chiguy99 wrote:Are the fin hardship calculations really that easy to fall into? I was initially thinking not PAYE for the very reason that I fully anticipate being out of fin hardship in yr 3, 4, 5 ... Def sometime before the yr 20. IF things go as planned, PAYE pmts will exceed an extended plan in just a couple yrs and 10% capitalization is a hard pill to swallow

Depends on the debt level. You go out of financial hardship if the PAYE minimum exceeds the 10 year plan payments. The 10% capitalization isn't much of an issue: capitalization for someone with 200k debt means about an extra 100 bucks a month in interest. It's not like there's some big up front cost you'll incur if you fall out of financial hardship.

Regarding your last post, again it depends on the debt level. Someone starting with 250k in debt needs to make upwards of 400k to be out of financial hardship.

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Anastasia Dee Dualla
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Re: Student loan payments: Actual numbers

Postby Anastasia Dee Dualla » Sat May 23, 2015 12:32 pm

At this point, it might be helpful to rename this thread the student loan discussion and start a new numbers only one; just a thought.




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