Student loan payments: Actual numbers

(On Campus Interviews, Summer Associate positions, Firm Reviews, Tips, ...)
Forum rules
Anonymous Posting

Anonymous posting is only appropriate when you are revealing sensitive employment related information about a firm, job, etc. You may anonymously respond on topic to these threads. Unacceptable uses include: harassing another user, joking around, testing the feature, or other things that are more appropriate in the lounge.

Failure to follow these rules will get you outed, warned, or banned.
User avatar
bk1
Posts: 18424
Joined: Sun Mar 14, 2010 7:06 pm

Re: Student loan payments: Actual numbers

Postby bk1 » Wed Dec 23, 2015 5:15 pm

JohannDeMann wrote:You cannot lose govt jobs. It's almost undoable.

Yea but the cost of not having a PSLF-qualifying job is really high for OP.

Anonymous User
Posts: 273567
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Dec 23, 2015 5:51 pm

75k govt poster with $250k + student loan debt here.
Thanks for the advice

I semi hear the sell the car thing because it's too high. But even if I wanted that I'd get nowhere new the 11k owed on it so what's the point?

Also one more question. How would you balance paying the cc debt with building savings?

User avatar
JohannDeMann
Posts: 13831
Joined: Wed Mar 12, 2014 4:25 pm

Re: Student loan payments: Actual numbers

Postby JohannDeMann » Wed Dec 23, 2015 6:00 pm

Anonymous User wrote:75k govt poster with $250k + student loan debt here.
Thanks for the advice

I semi hear the sell the car thing because it's too high. But even if I wanted that I'd get nowhere new the 11k owed on it so what's the point?

Also one more question. How would you balance paying the cc debt with building savings?


you need to get a 0% APR credit card right now for the next 12-15 months. put everything on that. pay down your credit card debt asap. then build savings next. i dont know shit about credit cards but maybe try to transfer that balance to a 0% APR intro card. 2.6k credit card debt should be able to repaid in like 2 months tops.

User avatar
bk1
Posts: 18424
Joined: Sun Mar 14, 2010 7:06 pm

Re: Student loan payments: Actual numbers

Postby bk1 » Wed Dec 23, 2015 6:19 pm

Anonymous User wrote:I semi hear the sell the car thing because it's too high. But even if I wanted that I'd get nowhere new the 11k owed on it so what's the point?

The point is that you'll save money in the long run. E.g., if you sell it for 8k (taking a 3k hit now) and buy a 5k beater, your transportation costs have gone down by 3k total. That said, it's not an enormous amount of savings and 11k for a car with your salary and REPAYE payments is not unreasonable, imo.
Anonymous User wrote:Also one more question. How would you balance paying the cc debt with building savings?

If you can balance transfer as johann suggests, that would be ideal since it'll give you time to pay it off over many months while also fully funding an emergency fund. If you can't do a balance transfer, I would first build a mini emergency fund (e.g., 1k) and then pay everything else to the CC debt. The personal finance idea is that usury level debt, such as CCs, is an emergency and warrants paying off before fully funding your emergency fund. Once the CC debt is gone, build up your emergency fund to 3-6 months worth of expenses (whatever you are comfortable with).

Anonymous User
Posts: 273567
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: Actual numbers

Postby Anonymous User » Sun Dec 27, 2015 8:04 pm

Can someone please help me understand who should be on REPAYE instead of PAYE? At what point, if ever, does that make sense on a BigLaw salary (until flaming out) v. riding out PAYE until the tax bomb? Definitely looks like REPAYE is a bad idea if married compared to married filing separately under PAYE, but I'm not married and I guess could decide to never get married if I saved a shitload of money.

Sorry for unnecessary anon. Username is saywhaaaa.

User avatar
Tiago Splitter
Posts: 15523
Joined: Tue Jun 28, 2011 1:20 am

Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Sun Dec 27, 2015 8:16 pm

Anonymous User wrote:Can someone please help me understand who should be on REPAYE instead of PAYE? At what point, if ever, does that make sense on a BigLaw salary (until flaming out) v. riding out PAYE until the tax bomb? Definitely looks like REPAYE is a bad idea if married compared to married filing separately under PAYE, but I'm not married and I guess could decide to never get married if I saved a shitload of money.

Sorry for unnecessary anon. Username is saywhaaaa.

Under REPAYE the government pays half of your unpaid interest. So if your income is low and the balance will be growing it could make more sense to do REPAYE.

Anonymous User
Posts: 273567
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: Actual numbers

Postby Anonymous User » Sun Dec 27, 2015 11:11 pm

how long did it take everyone to get on paye after applying? I've been waiting for 3 weeks for approval.

saywhaaaa
Posts: 1
Joined: Sun Dec 27, 2015 7:12 pm

Re: Student loan payments: Actual numbers

Postby saywhaaaa » Mon Dec 28, 2015 12:13 am

Thanks, Tiago.

It took 3 weeks for me to be approved for PAYE. I'd allow some additional time since you're hitting the holidays.

xxxman
Posts: 21
Joined: Wed Dec 23, 2015 11:28 pm

Re: Student loan payments: Actual numbers

Postby xxxman » Mon Dec 28, 2015 12:21 am

Did anyone here actually not already the cost of lawschool, how IBR works, or the fact that loans are expected to be repayed??

Anonymous User
Posts: 273567
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon Dec 28, 2015 1:38 am

New Op here.

You all have been giving out such great advice I was hoping I could throw my numbers out there for some guidance. I feel incredibly trapped right now. The stress is enormous! Here are my numbers, please tell me what you think may be helpful.


$167,046.00 total student loan debt (all fed loans undergrad & law) The very little that I have from undergrad is subsidized. I am not currently in repayment, but will be in approx. 10 months. I am currently a 3L.

$24,250 Total credit card debt (3 Cards Total. 1 Card was a refinance one, it has 0% APR until 3/2017, it is maxed right now at 5K. The other two have pretty high interest. And about 15K more of credit left combined.

I have two car loans, my wife’s car (I’m a cosigner), which she usually pays from part time unskilled labor work and my car. My car note is: $6,064. With 3.5% interest. I have a 2012 VW Passat TDI. She has a 2012 VW Jetta, and that Note is $13,500 Approx. with 4% interest. Both of our cars are fairly reliable and have about 50K miles on them.

Mortgage: Is $350 a month, which includes tax and Insurance. The Mortgage is about 4% on a 50K total loan. It is a VA mortgage. I am prior military. I plan on renting this house through a property management company once I start work full time. I am expecting $1200 a month in rent. It is a 3 bedroom 2.5 bath house in the South. Rental property people take 10% of rent to watch over it and collect rent.

Unsecured Loans: (1) Home remodel loan, $4,000 (17.75% APR) (2) Kay Credit, Total $2,500. No interest until 10/2016.


Salary and benefits Information:

I was hired by one of the military branches to be a JAG. My pay and benefits start sometime this coming August, 2016. So I will start getting paid right after the Bar exam.

Total taxable salary is: $63,446.40 yearly. That is pay grade 03E for 2015.

Also include in taxable income a potential $1000 approx. monthly for rental property.

Total un-taxed housing allowance $27,720 yearly. $2,310 monthly, 03E With Dependents. This is based on a northeastern base location. Which is where I will likely be.

Total BAS allowance (for sustenance), un-taxed: $253.63 a month. $3,043.56 for the year.

100% free health care and dental for my wife and I. We have no children.

My wife is an undergrad student. She will not likely have substantial or consistent income for a while. She works part time unskilled labor positions right now. She may attend law school. We aren’t sure about that right now. And we don’t have kids currently.


Summary: Total yearly income before taxes is: $106,209.96. So these are all of my numbers currently. As I said above, I am a 3L. I am at a T25 with median grades. I will likely be a Jag for at least the next 8 years. The next 4 years minimum because that is what my current employment contract is for. Afterward I was considering moving on to be an AUSA. Or I may stay in and retire from the military. I already have 4 years of the 20 completed. So the clear plan for the student loans is to do some income based repayment that will keep my loan payments as low as possible until I can use PSLF 10 years down the road. What else can I do here? Am I screwed? Will it be sometime until I have a middle class lifestyle? Any advice or tips whatsoever? Please help.

ballouttacontrol
Posts: 502
Joined: Tue Sep 15, 2015 9:00 pm

Re: Student loan payments: Actual numbers

Postby ballouttacontrol » Mon Dec 28, 2015 1:51 am

First thing first I would take out more loans if possible to cover that credit card debt. Screw paying 26% or whatever on thousands of $

If you're doing PSLF, student loan $ is basically play money. PAYE that shit out for 10 years and you're good

bjohnsobf
Posts: 43
Joined: Wed Mar 31, 2010 10:36 pm

Re: Student loan payments: Actual numbers

Postby bjohnsobf » Mon Dec 28, 2015 10:28 am

what the above said... + you're doing PAYE - PSLF when you start JAG max your TSP as much as you can to keep your AGI down. You might get away with a year of 0$ payments. Use that time to pay those credit cards.

User avatar
jessuf
Posts: 12578
Joined: Tue Mar 22, 2011 8:27 pm

Re: Student loan payments: Actual numbers

Postby jessuf » Mon Dec 28, 2015 12:51 pm

Anonymous User wrote:$270k total student loan debt(all fed loans ugrad & law)
$2.6k credit card debt
$11k car loan
Rent $1,050-$1,100 a month

$75k salary govt job
Repaye soon and obviously will do PLSF.

Advice/tips?

Govt employee here. You didn't put when you will graduate, so I will assume 2016. The tldr is that you want to pay the absolute minimum for 10 years if you stay in govt. I recommend that if you don't plan on it, you at least consider it because your student debt amount is unreal.

Your goals should be:

(1) Enter repayment right before your job starts so you can get full credit for PSLF. If you wait out the 6 month grace period like a lot of my coworkers, you won't benefit from getting those 6 months of work as credit because you weren't in repayment;

(2) Try to recertify each year using your tax returns from the previous tax year. E.g., if you enter repayment in the end of summer 2016, try to use your return from TY2015 to certify your income for REPAYE. If your TY2015 income was below a certain cap (I am too lazy to find a link but the calculators factor it in and it's something like $18.5k for a one-person household), your monthly payments will be $0 for the next year. If your loan servicer demands that you use a pay stub and not a tax return, you can at least get away with saying you're unemployed if you enter repayment right before your job starts. Then you will get the $0/month for the next year. When it comes time to recertify, try to use your TY 2016 return, which will be lower than your current income unless you made bank during 3L year somehow. If your loan servicer opposes, tell them that using the income on your pay stub doesn't include the adjustments/deductions you're eligible for. Some loan servicers demand pay stubs and my friends who have them were not very pushy on the issue, so I'm not sure if it is possible to convince them to let you use tax returns. However, fedloans at least does.

(3) Submit PSLF certification on a yearly basis or whenever you leave a job. Your loan servicer will update the credit you have towards forgiveness in your account. If you wait out the grace period to enroll in repayment, you will not get PSLF credit for the months you worked during the grace period.

(4) Obviously apply for school-funded LRAP or any LRAP provided by your government agency.

(5) Try to max out your roth/traditional IRA. If you're fed govt, you can't play with your 401k contribution (it's automatic). This will reduce your income for purposes of recertifying the next year.

(6) Try to pay off or down your credit card debt and car loan during year 1, when your student loan payments will be lowest (or $0).

The biggest tip is entering repayment before you start work. I only did this because of TLS advice from people like dresden. None of my co-workers did this, and now they're not getting PSLF credit for the grace period and some of them have pretty significant monthly payments because their servicers required them to certify with pay stubs and not tax returns. Both of these can be avoided by enrolling before your start date.

Anonymous User
Posts: 273567
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon Dec 28, 2015 5:21 pm

2015 graduate
$70k total student loan debt (federal)
No other debt
Rent: $1,400/m
Car loan: $224/m
Student loan payment: $315
Income: $2,800/m (non-law job I have maintained throughout law school)

Not soliciting advice. Just venting.

User avatar
JenDarby
Posts: 13324
Joined: Wed Oct 20, 2010 3:02 am

Re: Student loan payments: Actual numbers

Postby JenDarby » Mon Dec 28, 2015 5:24 pm

Anonymous User wrote:$70k total student loan debt (federal)
No other debt
Rent: $1,400/m
Car loan: $224/m
Student loan payment: $315
Income: $2,800/m (non-law job I have maintained throughout law school)

Not soliciting advice. Just venting.

Is $2,800/m your gross? Those payments seem high, what repayment plan are you on?

Anonymous User
Posts: 273567
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon Dec 28, 2015 5:33 pm

JenDarby wrote:
Anonymous User wrote:$70k total student loan debt (federal)
No other debt
Rent: $1,400/m
Car loan: $224/m
Student loan payment: $315
Income: $2,800/m (non-law job I have maintained throughout law school)

Not soliciting advice. Just venting.

Is $2,800/m your gross? Those payments seem high, what repayment plan are you on?

$2,800 is net.

I'm on the lowest repayment plan that was available. I forget what it's called.

Anonymous User
Posts: 273567
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon Dec 28, 2015 7:33 pm

'14 Grad here:
$240k debt
$75k/yr Fed Job

With PAYE, my payment is $425/mo - married filing single (SO has no loans).

My agency pays my monthly payments though (at least this year), so I don't pay anything.

Anonymous User
Posts: 273567
Joined: Tue Aug 11, 2009 9:32 am

Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon Dec 28, 2015 9:32 pm

2014 grad here.
Total student debt 265k at an average of more than 7% interest (was 272k at graduation and a large % of my debt is at 7.9%). No other debt besides student loans.
NYC big law and single. In 2015, I paid 2k a month for student loans + 1/3 of my bonus, and plan on doing the same this year.
5% of my income goes in unmatched 401k, and I also take $1,000 a month and invest it to savings account or SPY ETF.

I thought about re-financing, but am scared of economy going down and getting canned. Am I doing things really wrong?

User avatar
Tiago Splitter
Posts: 15523
Joined: Tue Jun 28, 2011 1:20 am

Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Mon Dec 28, 2015 10:55 pm

Anonymous User wrote:2014 grad here.
Total student debt 265k at an average of more than 7% interest (was 272k at graduation and a large % of my debt is at 7.9%). No other debt besides student loans.
NYC big law and single. In 2015, I paid 2k a month for student loans + 1/3 of my bonus, and plan on doing the same this year.
5% of my income goes in unmatched 401k, and I also take $1,000 a month and invest it to savings account or SPY ETF.

I thought about re-financing, but am scared of economy going down and getting canned. Am I doing things really wrong?

Don't put that $1,000 a month into an account that isn't tax-advantaged. If you feel relatively confident you will continue to have a high income for the foreseeable future you should look into refinancing those loans to see if you can get that high rate down.

User avatar
2014
Posts: 5834
Joined: Sat Jun 05, 2010 3:53 pm

Re: Student loan payments: Actual numbers

Postby 2014 » Tue Dec 29, 2015 9:05 am

I'm making a large payment today to hit the $2500 interest deduction - is there anything I need to do to ensure the payment counts as "interest"? My loans just hit repayment of that is relevant.

User avatar
gk101
Posts: 3695
Joined: Fri May 30, 2008 6:22 pm

Re: Student loan payments: Actual numbers

Postby gk101 » Tue Dec 29, 2015 9:20 am

2014 wrote:I'm making a large payment today to hit the $2500 interest deduction - is there anything I need to do to ensure the payment counts as "interest"? My loans just hit repayment of that is relevant.

are you making more than 72k this year?

gabewatch
Posts: 114
Joined: Wed Dec 16, 2009 1:15 am

Re: Student loan payments: Actual numbers

Postby gabewatch » Tue Dec 29, 2015 10:58 am

gk101 wrote:
2014 wrote:I'm making a large payment today to hit the $2500 interest deduction - is there anything I need to do to ensure the payment counts as "interest"? My loans just hit repayment of that is relevant.

are you making more than 72k this year?


I think its 80K. https://www.irs.gov/publications/p970/ch04.html

User avatar
gk101
Posts: 3695
Joined: Fri May 30, 2008 6:22 pm

Re: Student loan payments: Actual numbers

Postby gk101 » Tue Dec 29, 2015 11:05 am

gabewatch wrote:
gk101 wrote:
2014 wrote:I'm making a large payment today to hit the $2500 interest deduction - is there anything I need to do to ensure the payment counts as "interest"? My loans just hit repayment of that is relevant.

are you making more than 72k this year?


I think its 80K. https://www.irs.gov/publications/p970/ch04.html

thanks, they must've increased the limit since I last looked at it. I thought 2014 was doing biglaw but he might be in his stub year

User avatar
lacrossebrother
Top 17 consensus poster
Posts: 6875
Joined: Wed Jul 30, 2014 11:15 pm

Re: Student loan payments: Actual numbers

Postby lacrossebrother » Tue Dec 29, 2015 11:06 am

gabewatch wrote:
gk101 wrote:
2014 wrote:I'm making a large payment today to hit the $2500 interest deduction - is there anything I need to do to ensure the payment counts as "interest"? My loans just hit repayment of that is relevant.

are you making more than 72k this year?


I think its 80K. https://www.irs.gov/publications/p970/ch04.html

1. my nelnet straight up said that my shit is all interest ( i made same payment)
2. the phase out cap has nothing to do with that. also, just to be clear, phase out is from 65k-80k of MAGI. But yea, if you're in that range, try to make a big IRA/401k contribution if you haven't already.
3. big thing is (if on PAYE), make sure you don't click "don't advance payment" so that your payment covers future months too (i.e. no payments for jan-march)

User avatar
2014
Posts: 5834
Joined: Sat Jun 05, 2010 3:53 pm

Re: Student loan payments: Actual numbers

Postby 2014 » Tue Dec 29, 2015 11:11 am

gk101 wrote:
2014 wrote:I'm making a large payment today to hit the $2500 interest deduction - is there anything I need to do to ensure the payment counts as "interest"? My loans just hit repayment of that is relevant.

are you making more than 72k this year?

No I'm a stub year

lacrossebrother wrote:
gabewatch wrote:
gk101 wrote:
2014 wrote:I'm making a large payment today to hit the $2500 interest deduction - is there anything I need to do to ensure the payment counts as "interest"? My loans just hit repayment of that is relevant.

are you making more than 72k this year?


I think its 80K. https://www.irs.gov/publications/p970/ch04.html

1. my nelnet straight up said that my shit is all interest ( i made same payment)
2. the phase out cap has nothing to do with that. also, just to be clear, phase out is from 65k-80k of MAGI. But yea, if you're in that range, try to make a big IRA/401k contribution if you haven't already.
3. big thing is (if on PAYE), make sure you don't click "don't advance payment" so that your payment covers future months too (i.e. no payments for jan-march)


So it was obvious on your servicer's website? I'm thinking I may have to call mine since it's less clear.




Return to “Legal Employment”

Who is online

The online users are hidden on this forum.