Student loan payments: Actual numbers

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Sat Nov 23, 2013 4:45 pm

Amicus_Curiae2013 wrote:Great thread. I wished it also included school range e.g HYS, CCN, MVP etc...
Thanks for the great contribution!


Totally. It would be even more useful if it included vault range, URM status, journal, etc.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Sat Nov 23, 2013 4:52 pm

zweitbester wrote:
Amicus_Curiae2013 wrote:Great thread. I wished it also included school range e.g HYS, CCN, MVP etc...
Thanks for the great contribution!


Totally. It would be even more useful if it included vault range, URM status, journal, etc.

:lol:

Amicus_Curiae2013
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Re: Student loan payments: Actual numbers

Postby Amicus_Curiae2013 » Sat Nov 23, 2013 5:00 pm

zweitbester wrote:
Amicus_Curiae2013 wrote:Great thread. I wished it also included school range e.g HYS, CCN, MVP etc...
Thanks for the great contribution!


Totally. It would be even more useful if it included vault range, URM status, journal, etc.


Would be awesome!

NYstate
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Re: Student loan payments: Actual numbers

Postby NYstate » Sat Nov 23, 2013 8:04 pm

Amicus_Curiae2013 wrote:
zweitbester wrote:
Amicus_Curiae2013 wrote:Great thread. I wished it also included school range e.g HYS, CCN, MVP etc...
Thanks for the great contribution!


Totally. It would be even more useful if it included vault range, URM status, journal, etc.


Would be awesome!


Are you serious with this? If so, maybe make another thread where you explain why it matters to you. Why it doesn't matter- schools cost the same and there are no jobs. For some reason 0Ls don't grasp that getting a job requires more than just going to a certain T14 or having certain credentials.

I would add something about job searches but most of these posters seem to have jobs they got through OCI.

On topic: I have no debt. I lived at home and used money I inherited from my Dad for tuition. I am extremely debt averse. I would not have gone into the debt that is required for law school and my family wouldn't have supported it. I would have done something else instead of law school.

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Cicero76
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Re: Student loan payments: Actual numbers

Postby Cicero76 » Sat Nov 23, 2013 10:12 pm

Most of the awfulness ITT seems to revolve around the 7.9% interest rate meaning that the principal never seems to reduce. What does it mean for those of us in school now that the rate is 5.41%? Does it make no substantive difference because the amount of loans are so high anyway?

Amicus_Curiae2013
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Re: Student loan payments: Actual numbers

Postby Amicus_Curiae2013 » Sat Nov 23, 2013 10:17 pm

It was a cynical response to the previous poster.

I was initially just curious to see if there was a significant correlation between school ranking and (first) earnings. It is nice to see a variety of schools listed in some poster's descriptions. That's all.

Very informative thread.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Sat Nov 23, 2013 10:27 pm

Cicero76 wrote:Most of the awfulness ITT seems to revolve around the 7.9% interest rate meaning that the principal never seems to reduce. What does it mean for those of us in school now that the rate is 5.41%? Does it make no substantive difference because the amount of loans are so high anyway?



The higher the amount is, the more difference those percentage points make. I have a student loan for $800 sitting at around 3.6%. It makes no real difference to me if it goes a little higher (though if it goes credit card high, I might have to start rapidly paying that shit down).

I also think programs like SoFi are a godsend. If you can nab that 2.xx% interest, you're looking at loans that you'll have paid off in 10 years. And if you're in big law, you'll have paid less total than you would have under PAYE (assuming standard law school debt size and market salary), to make no mention of the tax bomb at the end which IIRC hasn't been removed.

At 2.xx% interest, your money allocation strategy changes. When you have 7%+ loans, aside from having an emergency fund, you should be throwing every dime at those loans. At 2.xx% interest, you're looking at just paying minimum payments and rolling the rest of the cash into an index fund at Vanguard. It's a better use of cash. And you have to resist the urge to vomit every time you see a high loan balance. Get used to it, because you'll soon have a mortgage at a higher interest than 2.xx%.

The big picture here is that you should divert your money to where you'll get the biggest punch. Paying off a 7% interest loan guarantees you a 7% return on your money. There are very few passively managed investments today that can beat that. And you can't actively manage investments because you're in big law (unless you're very, very talented or experienced--I actively invest but it took me years to reach the point of sustained, high profitability). At 2.xx% interest, you can get better return elsewhere.

Someone above pointed out DBBank as well. Not a huge fan of them. I get that their fixed interest rate shit is competitive, but their variable lending practices seem predatory and the sign up process doesn't inspire confidence in that area. I've heard great things about SoFi, on the other hand, and actively encourage my buddies to refinance through them.

Pre-ITE, you would've taken your government loans and refinanced through Chase, Bank of America, etc., for a lower interest rate. When I talk to senior associates, the reason they still have debt is that they refinanced when interest rates were so low and such refinancing options were still being offered by the above banks, so keeping that debt on hand isn't as bad. Today, refinancing options are few.

TL;DR: If you're sitting above 5% or so, just throw as much money as possible at them. If you're sitting high and mighty at 2.xx%, just do minimum payments. Higher liquidity and other investments are much more worth it in that case.

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lonerider
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Re: Student loan payments: Actual numbers

Postby lonerider » Sat Nov 23, 2013 11:00 pm

.
Last edited by lonerider on Sat May 10, 2014 2:41 pm, edited 1 time in total.

NYstate
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Re: Student loan payments: Actual numbers

Postby NYstate » Sat Nov 23, 2013 11:12 pm

zweitbester wrote:
Cicero76 wrote:Most of the awfulness ITT seems to revolve around the 7.9% interest rate meaning that the principal never seems to reduce. What does it mean for those of us in school now that the rate is 5.41%? Does it make no substantive difference because the amount of loans are so high anyway?



The higher the amount is, the more difference those percentage points make. I have a student loan for $800 sitting at around 3.6%. It makes no real difference to me if it goes a little higher (though if it goes credit card high, I might have to start rapidly paying that shit down).

I also think programs like SoFi are a godsend. If you can nab that 2.xx% interest, you're looking at loans that you'll have paid off in 10 years. And if you're in big law, you'll have paid less total than you would have under PAYE (assuming standard law school debt size and market salary), to make no mention of the tax bomb at the end which IIRC hasn't been removed.

At 2.xx% interest, your money allocation strategy changes. When you have 7%+ loans, aside from having an emergency fund, you should be throwing every dime at those loans. At 2.xx% interest, you're looking at just paying minimum payments and rolling the rest of the cash into an index fund at Vanguard. It's a better use of cash. And you have to resist the urge to vomit every time you see a high loan balance. Get used to it, because you'll soon have a mortgage at a higher interest than 2.xx%.

The big picture here is that you should divert your money to where you'll get the biggest punch. Paying off a 7% interest loan guarantees you a 7% return on your money. There are very few passively managed investments today that can beat that. And you can't actively manage investments because you're in big law (unless you're very, very talented or experienced--I actively invest but it took me years to reach the point of sustained, high profitability). At 2.xx% interest, you can get better return elsewhere.

Someone above pointed out DBBank as well. Not a huge fan of them. I get that their fixed interest rate shit is competitive, but their variable lending practices seem predatory and the sign up process doesn't inspire confidence in that area. I've heard great things about SoFi, on the other hand, and actively encourage my buddies to refinance through them.

Pre-ITE, you would've taken your government loans and refinanced through Chase, Bank of America, etc., for a lower interest rate. When I talk to senior associates, the reason they still have debt is that they refinanced when interest rates were so low and such refinancing options were still being offered by the above banks, so keeping that debt on hand isn't as bad. Today, refinancing options are few.

TL;DR: If you're sitting above 5% or so, just throw as much money as possible at them. If you're sitting high and mighty at 2.xx%, just do minimum payments. Higher liquidity and other investments are much more worth it in that case.


Senior associates didn't have the option of PAYE or IBR. They werent losing any loan forgiveness or default protection if they lost their job. (plus they have to have started with a much smaller balance given the tuition increases over the past few years.)To me the biggest issue with private refinancing is that you are throwing away a huge safety net you might need or want someday.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Sat Nov 23, 2013 11:43 pm

No risk, no reward. But I realize I'm preaching to the wrong choir on that one.

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sawwaverunner
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Re: Student loan payments: Actual numbers

Postby sawwaverunner » Sat Nov 23, 2013 11:53 pm

Law-School/Undergrad Debt: $55,ooo
Income: $51,ooo
Monthly Payment: $55/month - Pay As You Earn payment [IBR plan] / PSLF program
Graduated- 2o12
Note: Payment is low because I have a household of 3 and plan on doing ten year Public Service Loan Forgiveness program.

09042014
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Re: Student loan payments: Actual numbers

Postby 09042014 » Sun Nov 24, 2013 11:30 am

lonerider wrote:
Amicus_Curiae2013 wrote:It was a cynical response to the previous poster.

I was initially just curious to see if there was a significant correlation between school ranking and (first) earnings. It is nice to see a variety of schools listed in some poster's descriptions. That's all.

Very informative thread.


Big law (mostly) pays lock step salary. There is a correlation between school ranking and Big Law employment. Once you get big law employment, you get the exact same salary. Look at the Vault profiles for a couple firms, looking at the salary they pay. Asking about a correlation between school ranking and earnings doesn't make any sense.

Cravath, vault #2, pays the same as Stroock, vault #95.
http://www.vault.com/company-profiles/l ... e-llp.aspx
http://www.vault.com/company-profiles/l ... n-llp.aspx



Cravath pays below a ton of NYC firms when you count bonuses.

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Young Marino
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Re: Student loan payments: Actual numbers

Postby Young Marino » Sun Nov 24, 2013 12:20 pm

sawwaverunner wrote:Law-School/Undergrad Debt: $55,ooo
Income: $51,ooo
Monthly Payment: $55/month - Pay As You Earn payment [IBR plan] / PSLF program
Graduated- 2o12
Note: Payment is low because I have a household of 3 and plan on doing ten year Public Service Loan Forgiveness program.

Sounds like the PSLF program has really helped a lot of people. Were you dead set on working in the public sector or was something you were forced into doing because of the loans?

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sawwaverunner
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Re: Student loan payments: Actual numbers

Postby sawwaverunner » Sun Nov 24, 2013 12:34 pm

Young Marino wrote:
sawwaverunner wrote:Law-School/Undergrad Debt: $55,ooo
Income: $51,ooo
Monthly Payment: $55/month - Pay As You Earn payment [IBR plan] / PSLF program
Graduated- 2o12
Note: Payment is low because I have a household of 3 and plan on doing ten year Public Service Loan Forgiveness program.

Sounds like the PSLF program has really helped a lot of people. Were you dead set on working in the public sector or was something you were forced into doing because of the loans?


I was pretty set on public interest work. I interned at my public interest office my 2L summer and really liked the laid back atmosphere. I also did a year EJW Fellowship at my current office before becoming a staff attorney. I could probably handle the loans without PSLF, but ten years of low payments and then having the rest discharged would be terrific.

PSLF is great, but IBR is really a huge help.

Void
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Re: Student loan payments: Actual numbers

Postby Void » Sun Nov 24, 2013 2:13 pm

Young Marino wrote:
sawwaverunner wrote:Law-School/Undergrad Debt: $55,ooo
Income: $51,ooo
Monthly Payment: $55/month - Pay As You Earn payment [IBR plan] / PSLF program
Graduated- 2o12
Note: Payment is low because I have a household of 3 and plan on doing ten year Public Service Loan Forgiveness program.

Sounds like the PSLF program has really helped a lot of people. Were you dead set on working in the public sector or was something you were forced into doing because of the loans?


You ask this as if public sector jobs are backup plans or last resort options that people can be forced into when they have no other choices. It's not the 90s anymore, and the days of "if biglaw doesn't work out I can always just be a public defender" are long gone. Public service gigs, even at the state level, are fiercely competitive, and unless you tailor your law school experience & resume towards public interest law from the get-go, you will probably be locked out, even with great grades and school rank and everything else that you might expect would help you. HR at my job is more likely to trash a top 10% T-14 resume with no public interest on it than a TTT above median who has devoted his/her time to relevant study & experience.

Total Litigator
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Re: Student loan payments: Actual numbers

Postby Total Litigator » Sun Nov 24, 2013 2:56 pm

helfer snooterbagon wrote:
fenton wrote:
Total Litigator wrote:
dixiecupdrinking wrote:You can take the standard deduction and still take the student loan interest deduction. The problem is the income cap.


If you are correct, then Turbotax gone and done me wrong.


He's right.
http://www.irs.gov/taxtopics/tc456.html

Generally people who make less than $70k don't itemize their deductions. That would be a particularly cruel joke for congress to play.


The issue is that interest on student loans is an adjustment to income - it is taken off at the top and reduces your adjusted gross income (AGI). Deductions are applied a bit later on in the process. I am almost positive tubo tax did not do the calculation wrong, it is a solid program. Edit: Sorry for going off topic.



Whoops, you guys are right, my bad.

dudders
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Re: Student loan payments: Actual numbers

Postby dudders » Sun Nov 24, 2013 3:01 pm

zweitbester wrote:
Amicus_Curiae2013 wrote:Great thread. I wished it also included school range e.g HYS, CCN, MVP etc...
Thanks for the great contribution!


Totally. It would be even more useful if it included vault range, URM status, journal, etc.


How is this helpful? My loans don't give a damn where I went to school or what journal I'm on. I wouldn't want 0Ls using these out-of-context anecdotes to gauge their chances at BigLaw or something.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Sun Nov 24, 2013 3:06 pm

dudders wrote:
zweitbester wrote:
Amicus_Curiae2013 wrote:Great thread. I wished it also included school range e.g HYS, CCN, MVP etc...
Thanks for the great contribution!


Totally. It would be even more useful if it included vault range, URM status, journal, etc.


How is this helpful? My loans don't give a damn where I went to school or what journal I'm on. I wouldn't want 0Ls using these out-of-context anecdotes to gauge their chances at BigLaw or something.


I was going to say, "woosh," but maybe that would've gone over your head too. So to be clear:

I was being sarcastic.

jd20132013
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Re: Student loan payments: Actual numbers

Postby jd20132013 » Sun Nov 24, 2013 6:57 pm

Is there a thread similar to this but more tailored to people posting their loan repayment strategies and answering questions?

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kay2016
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Re: Student loan payments: Actual numbers

Postby kay2016 » Sun Nov 24, 2013 6:59 pm

jd20132013 wrote:Is there a thread similar to this but more tailored to people posting their loan repayment strategies and answering questions?


Maybe this thread? viewtopic.php?f=10&t=183509

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon Nov 25, 2013 3:08 am

0L here, looking for any JAG actual numbers out there? Is Uncle Sam nice to commissioned officers and law school debt?

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Big Shrimpin
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Re: Student loan payments: Actual numbers

Postby Big Shrimpin » Wed Nov 27, 2013 2:14 pm

Started with 185k debt, paid down to like 147k over a year

3.5k(ish)/mo

MFH biglaw 160k+market bonus

Trying to pay them all ASAP, prioritizing DAT 7.9% direct loan burden before the smaller staffords (just pay mins).

HOAPING not to get shitcanned.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Nov 29, 2013 4:55 pm

3rd year associate in biglaw

Debt: ~$160K plus spouse's $80K (started with ~$190K for me, $120K for spouse)
Income: ~$170K plus ~$50K from spouse salary
Monthly payments: $1,450/month (plus spouse's grad loans ~$800/month)

Some of you may ask - how the hell did you not pay more down on your loans? Throw in a wedding and saving/buying a house and it can put a pretty big dent in your income. I'm really hoping we can get this repaid in the next 10 years. It probably won't happen. 15years is probably more realistic (maybe 20) based upon the fact that I probably can't last in big law and we want to have kids soon.

We don't live extravagantly. As much as you think you will be just put all of your income towards your loans, you won't. Dry cleaning bills add up, clothes add up (even if you aren't super into fashion...biz clothes are expensive), take-out adds up (because you have no time to cook/shop), and you will want to enjoy yourself a little bit during the small pockets of free time that you have (e.g., not just staying home for a vacation, going to a concert, etc.). It depends on how old you are. If you went college to law school, can put off buying/saving for a home because you aren't going to have kids soon and/or don't have to save for a wedding, then you can put a big dent in there. My spouse's loans would probably be close to paid off if we hadn't saved aggressively for a house and had to pay for our own wedding. Think very carefully about your lifestyle, financial plan and be realistic. Best savings tip is to bring your own lunch. It's healthier and saves you a ton of cash. I am super thankful I got big law - I would have been fucked otherwise.

joblawl
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Re: Student loan payments: Actual numbers

Postby joblawl » Sun Dec 01, 2013 8:57 pm

Debt: $77k
Income: $120k
Payments: $950 on a 10-year plan.

Anyone have thoughts on how much should be allocated to savings compared to paying down debt? I keep saying that I'm going to put aside an emergency fund, but it's tempting to just throw all I can at the loans.... My plan is to pay the minimum on my loans until I hit $10k-12k in savings - then hit the loans hard and allocate a much smaller percentage of my income towards savings. How are you folks balancing savings/loan repayments?

Void
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Re: Student loan payments: Actual numbers

Postby Void » Sun Dec 01, 2013 9:57 pm

joblawl wrote:Debt: $77k
Income: $120k
Payments: $950 on a 10-year plan.

Anyone have thoughts on how much should be allocated to savings compared to paying down debt? I keep saying that I'm going to put aside an emergency fund, but it's tempting to just throw all I can at the loans.... My plan is to pay the minimum on my loans until I hit $10k-12k in savings - then hit the loans hard and allocate a much smaller percentage of my income towards savings. How are you folks balancing savings/loan repayments?


What are these savings you speak of? Paycheck to paycheck up in here.




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