Student loan payments: get advice and actual numbers here

[Elston Gunn]

Does anyone know where to find a calculator where you can estimate the money saved by making payments on interest AND Principal while still in a non-payment period? I am in a situation where I may be able to pay part of some loans off while in law school

Will you need to take out any further loans? Avoid taking out further loans before paying back the ones you have (because of the origination fees).

[itascot1992]

Does anyone know where to find a calculator where you can estimate the money saved by making payments on interest AND Principal while still in a non-payment period? I am in a situation where I may be able to pay part of some loans off while in law school

Will you need to take out any further loans? Avoid taking out further loans before paying back the ones you have (because of the origination fees).

Will not be taking out any more loans (should i have said that in the original post)

[toplawnerd]

Does anyone know where to find a calculator where you can estimate the money saved by making payments on interest AND Principal while still in a non-payment period? I am in a situation where I may be able to pay part of some loans off while in law school

Will you need to take out any further loans? Avoid taking out further loans before paying back the ones you have (because of the origination fees).

Will not be taking out any more loans (should i have said that in the original post)

Similar situation and also interested in this.

[lacrossebrother]

I don't see how interest rates can stay low anymore. I personally wouldn't take a variable rate at this point w/ Greece and individual states starting to show weakness.

[IrwinM.Fletcher]

I don't see how interest rates can stay low anymore. I personally wouldn't take a variable rate at this point w/ Greece and individual states starting to show weakness.

I agree that rates will move up but Greece and weak state-level/Puerto Rico balance sheets give ammo to the doves, not the hawks.

[mushybrain]

Dumb question, sorry if answered and I missed it in my search. When are we actually supposed to fill out the PAYE/IBR request form after graduating? When I looked through it on studentloans.gov I saw that at the end you have to agree to allow your servicer to end your deferment early if they choose to in order to process the request, so I didn't do it. Someone posted something about needing to wait until 90 days before entering repayment but I didn't see anything else about that. Navient currently says my payments start in Feb.

[Anonymous User]

I was looking for someone in this boat when I was still in school, so I will pay it forward with updates.

Numbers VERY slightly fudged

Me: NYC Biglaw (haven't started), $0 in loans,
Wife : $50k w/slightly more than $100k in loans.
Both have mid 700s credit scores
Looking to Refi her loans and cosign (I know, risky but w/e)

Common Bond: Won't allow me to since I don't have loans
Sofi offered: Fixed: 10-year $1,170 @5.36% Variable: 10-year $1,075 @3.44
GOV: Std $1,180 per month Extd: $650 per month
DRB: Pending Fixed @ 3.5-6.5% Variable @ 2-4%
Only going to refi if DRB hooks me up, Sofi doesn't seem worth it.

For anonymity and clarity I will try to sign any updates/answers with "-DINC"

[Anonymous User]

Looking for advice from people who know more about this sort of thing than I. Thanks in advance for any insight.

$230k debt
$110k liquid assets, $90k of which is a Roth IRA (about $45k of which could be withdrawn without penalty)
Lockstep biglaw job in relatively high CoA location
Wife makes about $40k. We have no short-medium term plans for either a house or children

I'm looking to get into bigfed, but struck out on clerkships (T-6, decent but not great grades), so I'm not sure how likely that is to happen anytime soon (or at all). I'm trying to figure out whether I should a) refinance or not and b) pay the loans aggressively or not. My natural conservative-lawyer inclination is to refinance and try to get them paid off in 2.5-3 years, but giving up the opportunity for LRAP/IBR should things work out is concerning. Thoughts?

[Johann]

I don't see why you would refinance if you are applying to PSLF eligible jobs.

[Anonymous User]

Because it seems likely, if not probable, that I won't get any.

[Johann]

Assuming you are a recent graduate, you can ride out PAYE and make no payments or very low payments on your debt for a couple of years while you apply to federal and local jobs. Just save the money and don't blow it buying things. If you haven't gotten any nibbles on government jobs in the first 18 months and like biglaw enough to stick it out, then refinance.

Just to let everyone know also, there is significant traction right now for legislation that will allow government borrowers to refinance with the government at a lower, market rate. Refinancing so early into the game to save a few thousand dollars is foolish when government repayment programs could save you in the area of 100-200k. .

[Anonymous User]

Debt: about $140,000 (despite paying in-state tuition at a low-cost state school and getting a partial scholarship. Some of that is undergrad though)
Payments: about $150/month
Income: Less than $50k
Plan: Pay as you earn
Important info: my wife also has a low income and about a third of the amount of federal student loans, and we have children, both of which affect the PAYE calculation.
Bonus points: working at a PSLF-eligible job, but considering leaving

If I left and went private I believe my payment would be about $1,300 a month or something absurd like that. Maybe $850 with our income... I can't remember. I keep blanking on the actual number because it makes me want to vomit. I'm going to have to get over that if I want to leave.

[BuckinghamB]

Assuming you are a recent graduate, you can ride out PAYE and make no payments or very low payments on your debt for a couple of years while you apply to federal and local jobs. Just save the money and don't blow it buying things. If you haven't gotten any nibbles on government jobs in the first 18 months and like biglaw enough to stick it out, then refinance.

Just to let everyone know also, there is significant traction right now for legislation that will allow government borrowers to refinance with the government at a lower, market rate. Refinancing so early into the game to save a few thousand dollars is foolish when government repayment programs could save you in the area of 100-200k. .

I was going to refi a little less than half of my debt right away, but now I'm seriously considering PAYEing for a few years to see what develops on this front (while investing the increased monthly cashflows obvi)

[Johann]

Debt: about $140,000 (despite paying in-state tuition at a low-cost state school and getting a partial scholarship. Some of that is undergrad though)
Payments: about $150/month
Income: Less than $50k
Plan: Pay as you earn
Important info: my wife also has a low income and about a third of the amount of federal student loans, and we have children, both of which affect the PAYE calculation.
Bonus points: working at a PSLF-eligible job, but considering leaving

If I left and went private I believe my payment would be about $1,300 a month or something absurd like that. Maybe $850 with our income... I can't remember. I keep blanking on the actual number because it makes me want to vomit. I'm going to have to get over that if I want to leave.

Your monthly payment should be pretty much the same percentage of income under PAYE (close to 10%), so I don't think your calculations are right if your repayment numbers are that drastic.

[Johann]

Assuming you are a recent graduate, you can ride out PAYE and make no payments or very low payments on your debt for a couple of years while you apply to federal and local jobs. Just save the money and don't blow it buying things. If you haven't gotten any nibbles on government jobs in the first 18 months and like biglaw enough to stick it out, then refinance.

Just to let everyone know also, there is significant traction right now for legislation that will allow government borrowers to refinance with the government at a lower, market rate. Refinancing so early into the game to save a few thousand dollars is foolish when government repayment programs could save you in the area of 100-200k. .

I was going to refi a little less than half of my debt right away, but now I'm seriously considering PAYEing for a few years to see what develops on this front (while investing the increased monthly cashflows obvi)

The bill was shot down by some republicans, but I still think foolish to refi so early into the process. November 2016 will be very telling (I'm no democrat but I'm a smart, betting man, and the dems have somewhere around a 75% chance probably), and the fact that you can just save that money and stick it in SPY while riding out PAYE and be as good if not better off (historical avg yearly returns of SPY greater than 7.5% interest and 7 years running now of better returns), it's just way too premature to push your chips in on the private refi side before your career even starts to take shape.

[spleenworship]

Debt: about $140,000 (despite paying in-state tuition at a low-cost state school and getting a partial scholarship. Some of that is undergrad though)
Payments: about $150/month
Income: Less than $50k
Plan: Pay as you earn
Important info: my wife also has a low income and about a third of the amount of federal student loans, and we have children, both of which affect the PAYE calculation.
Bonus points: working at a PSLF-eligible job, but considering leaving

If I left and went private I believe my payment would be about $1,300 a month or something absurd like that. Maybe $850 with our income... I can't remember. I keep blanking on the actual number because it makes me want to vomit. I'm going to have to get over that if I want to leave.

Your monthly payment should be pretty much the same percentage of income under PAYE (close to 10%), so I don't think your calculations are right if your repayment numbers are that drastic.

I think possibly a raise was assumed.

[Johann]

Debt: about $140,000 (despite paying in-state tuition at a low-cost state school and getting a partial scholarship. Some of that is undergrad though)
Payments: about $150/month
Income: Less than $50k
Plan: Pay as you earn
Important info: my wife also has a low income and about a third of the amount of federal student loans, and we have children, both of which affect the PAYE calculation.
Bonus points: working at a PSLF-eligible job, but considering leaving

If I left and went private I believe my payment would be about $1,300 a month or something absurd like that. Maybe $850 with our income... I can't remember. I keep blanking on the actual number because it makes me want to vomit. I'm going to have to get over that if I want to leave.

Your monthly payment should be pretty much the same percentage of income under PAYE (close to 10%), so I don't think your calculations are right if your repayment numbers are that drastic.

I think possibly a raise was assumed.

To be paying 1,300 a month on PAYE, they'd have to be making like 15k a month (probably more given the kids). I get the payment will go up some, but it shouldnt be that drastic is my point as it should still be about 10% of income.

[JenDarby]

This is helpful:

[Danger Zone]

Debt - 70k
Salary - 145

I want to use SoFi or a similar service. I start work in September, so when should I go about contacting them?

Also do they allow prepayment?

I want to be aggressive with my loan and knock it out in a couple of years. Originally I was going to throw my 8k in savings I have at my grad plus loans right off the bat and then live of credit card until my first paycheck. If I plan on using SoFi, should I ditch this plan?

Also, if using SoFi should I just ride out the term and not be aggressive?

I'm conflicted on what I should do. Not sure how long I will be in big law and my S/O want to buy a house after next year.


Other considerations:

S/O with ~50k salary and ~50k debt.

I don't know about prepayment, but I see no reason to wait on contacting SoFi: your loans are accumulating interest, so the sooner you refi, the better.

Don't live off of credit cards unless you have some 0% APR deal going. The interest rates on your credit cards will be > the interest rates on SoFi.

Regarding being aggressive with SoFi, well, it all depends on your risk tolerance. Assuming you get something like a 5% 10-year fixed rate loan with SoFi, it's probably more likely than not (but far from guaranteed) that you could beat that in the private market. That said, investing when you still have loans = leveraging your money, which is a risky strategy. Personally, I'd treat your loans like part of your investment portfolio. The benefit of your loans is that you can guarantee yourself some interest rate gains by paying them off faster. The cost is that by paying off your loans, you lose liquidity. For your particular situation, because you may want to buy a house in a year or so, I would discourage you from paying off your loans particularly aggressively: you'll need to save for a down payment on your house. This also means that you should not be investing your money as aggressively as you might otherwise (because you'll need it in the next year or two, you should be making lower-variability lower-risk investments).

Personally, if I were in your shoes, here's what I would do:

(1) refi with sofi or DRB or common bond ASAP (assuming you get a good interest rate). Put your loans in some combination of 5- and 10-year fixed depending on your budgetary flexibility (and be cautious -- you never know how having a baby, losing your job, etc, will impact your ability to pay off your loans);

(2) pay the minimum on your loans over the next 1-2 years while saving aggressively for a house down payment, put that savings in something like Vanguard mutual funds with an approximately 70% bonds / 30% stock balance (more weighted towards bonds if you're less risk tolerant, more weighted towards stocks if you're more);

(3) after you buy your house (or if you decide you're not going to buy a home anytime soon), then you can start considering how to balance your savings / loan repayments. Personally, if I were in your shoes at this point, I would treat my loans as part of my portfolio. So if you want to have a 50/50 bonds/stock balance (e.g., an asset allocation designed for neither the particular long- or particular short-term), consider putting the 50% of your "bond investment" funds into paying down your loans instead of actually buying bonds -- I think you'll find that the guaranteed interest rates of your loans will equal or beat the non-guaranteed rates of bond-based funds (and the short-term liquidity you'll lose won't matter if you're not investing for the short term).

I tried applying for a refi today and it didn't work anywhere. Denied at SoFi, and Common Bond and DRB both wanted a current employer (no option for future employment). Seems the best option is to wait until we start working, despite the interest accruing in that time period.

[Anonymous User]

I was looking for someone in this boat when I was still in school, so I will pay it forward with updates.

Numbers VERY slightly fudged

Me: NYC Biglaw (haven't started), $0 in loans,
Wife : $50k w/slightly more than $100k in loans.
Both have mid 700s credit scores
Looking to Refi her loans and cosign (I know, risky but w/e)

Common Bond: Won't allow me to since I don't have loans
Sofi offered: Fixed: 10-year $1,170 @5.36% Variable: 10-year $1,075 @3.44
GOV: Std $1,180 per month Extd: $650 per month
DRB: Pending Fixed @ 3.5-6.5% Variable @ 2-4%
Only going to refi if DRB hooks me up, Sofi doesn't seem worth it.

For anonymity and clarity I will try to sign any updates/answers with "-DINC"

DRB: Fixed: 5@5.00% 10@5.75% 15@6.25% 20@6.50%
Variable [Max at 9%): 5@3.98% 10@4.18% 15@4.25% 20@4.25%
[Plus .25% off for DD)


Willing to continue my Gov forbearance period, and grant me a $100 a month payment until my wife finishes her residency


-DINC

[Anonymous User]

Debt: 50k private loans (I refi'd my federal loans to private - so 5% interest)
Spouse no debt
Liquid (with spouse): 160k (60k of which is in 401k)
Combined salaries: 250k

I paid down loans a ton until I hit 50k then slowed down. Worth it to pay off loans or should we invest the cash savings? Is the market low enough right now? We've been holding onto cash for a good time to buy into the market. Also should we do diversified vanguard or invest in certain stock, etc.?

[Jchance]

I graduated in May, after 6-month grace period, repayment starts in Nov. If I refinance in Nov. or right before first payment due (Dec?), is it true that there is another grace-like period of refinance that doesn't start repayment until 4-6 weeks after refinance (which would make it Jan or even Feb)?

[JenDarby]

I graduated in May, after 6-month grace period, repayment starts in Nov. If I refinance in Nov. or right before first payment due (Dec?), is it true that there is another grace-like period of refinance that doesn't start repayment until 4-6 weeks after refinance (which would make it Jan or even Feb)?

Yes, (at least with CommonBond) the refinance grace period is entirely separate and is around 6 weeks.

[Anonymous User]

Debt: 300k (180k me, 120k spouse)
Salary: Year 1 = clerking, so like $60k me, $60k spouse. Year 2: 170k me, 65k spouse (in a state with no state income tax), plus $50k clerkship bonus.
Payments: ???
Plan: Is this advisable? Live off my spouse's salary, and throw my biglaw salary at loans before I burn out or get pushed out (after maxing out 401K, IRA, home down payment fund, etc). We would live off about $70k for what, 4 years, before the entire balance is paid off? This seems simple, and since it seems simple I'm led to believe it is stupid. Is it?
Random: I plan to go into BigFed some day

What is the best approach to tackle this?

[IrwinM.Fletcher]

4 years is a long time and you never pay down the balance as quickly as you expect.