Just read every word of this thread and two things.
1) Thank you. I have now learned that simply paying my loans down as quickly as possible is not only a poor financial decision, but - probably more importantly - is not the way I want to live my life. I think it was this post that convinced me:
fats provolone wrote:everyone seems to be forgetting that you might die in 20 years. or, even more likely, life won't be worth living in 2035. what's the point of being debt free then?
There was also a post to the effect of: "I went to law school for three years, worked my ass off for four years, and being debt-free is all I have to show for it."
2) I'd like to test my knowledge and confirm with you guys that this is the right plan.
Debt: ~$155K at start of employment (mid-Sept 2016). Repayment begins November 2016.
Interest: Weighted average is ~6.4%
Income: After housing/tax, I'll net about $120K (including bonus)
Plan: Build up 6-month rainy day fund while making minimum payments on loans, then refi and pay minimum on 10 year plan and invest with the rest.
I don't fully understand PAYE/IBR, but it seems like my discretionary income will be too high (and debt too low) for them to make sense
Thanks to this thread, I realized the importance of an emergency fund. While I know 6 month is on the high end of what is needed, I'm generally risk-averse. It won't take that long to build though. Under this plan, I'm probably looking at refi around Feb 2017. I don't have a plan to go into a PSLF-eligible job, my school has a great LRAP, and I'm rather terrified about not passing the bar, so a refi in September doesn't seem like a good idea to me. Perhaps at bar passage, but not before.
I realize the time of refi could be the point where I am doing something wrong. I'm basically paying thousands of dollars ($155K at 6.2% vs $155K at ~3%) and foregoing returns on investment as a hedge against getting fired in the first five months on the job. This period is a year off, but if you all think this is really dumb and a waste of money, I'm going to start looking into refi now and do it at graduation, which I guess would save me $8K or so if I am indeed not laid off. I'm actually comfortable with that given the risks, but there could be something I'm missing.
Thank you all. I will know the ins and outs of this stuff soon and will then start paying it back myself.
Edit: I know I should be much more thoughtful on exactly what I'll be doing with my earnings pre-refi (i.e., should perhaps invest instead) and that building an emergency fund is another hedge/lost opportunity. Comments on that would be great, but since that's a year away I don't want to take up space on this thread now.