Student loan payments: get advice and actual numbers here Forum

[bk1]

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]

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?

[Johann]

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.

[bk1]

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.

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]

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.

[Tiago Splitter]

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]

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

[saywhaaaa]

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]

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]

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]

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]

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.

[jess]

.

[Anonymous User]

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.

[JenDarby]

$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]

$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]

'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]

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?

[Tiago Splitter]

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.

[2014]

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.

[gk101]

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]

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

[gk101]

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

[lacrossebrother]

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)

[2014]

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

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.