Student loan payments: Actual numbers

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Pokemon
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Re: Student loan payments: Actual numbers

Postby Pokemon » Mon Apr 04, 2016 8:00 pm

Anonymous User wrote:Soon-to-be graduate here.

Debt: 20,000
Income: I'm clerking for two years at 60,000 and then 75,000. I'm either doing midlaw after my clerkships (110,000) or biglaw (presumably 185,000 + 70,000 bonus).
Other: My first clerkship is in an city where COA is pretty high, but my second on is in a city where it's pretty cheap to live. We will have our first baby around when I graduate. My spouse and I worked throughout law school to pay down the debt. I will be the only source of income.

Two questions: (1) what repayment plan should I select? (2) how actively would you pay down the debt? I imagine I could pay the debt down during my clerkships, but I could just make minimum payments until I start at a law firm and take care of it pretty quickly.



Does it matter. Your debt is too low to be an issue.

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Mon Apr 04, 2016 8:23 pm

Yeah, unless you missed a zero, that's an offensively low amount of debt. You don't need advice, just pay $2k/month for 10 months and enjoy your future.

petra
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Re: Student loan payments: Actual numbers

Postby petra » Mon Apr 04, 2016 11:14 pm

Similar question as above but a little rougher numbers:

Graduating with:
-27k (including interest) in fed loans
-about 70-80k in loans from family. Interest with parents not set in stone but around 1-2%.

Moving to a high COL area for bar study in June and starting in Sept/Oct. The firm supplies in the 10-15k range for bar study, which will just cover rent before starting work (rent is 2500-3000k. Yes, it's high, no, I can't really get around it, nor would I want to because I don't spend much on anything else). Parents are willing to continue loaning money for COL (food, utilities) until I start work.

Questions:

1. Am I stupid to take out more fed loans (5-10k range) to cover extra costs for this summer and maybe a small bar trip to give myself a safety net? If not stupid, how much? Terrified of the fed loan interest rates. I'd like to start being independent from parents and also don't feel comfortable asking them for more of a loan so I can get drunk on a beach, so thinking about taking out more.
2. How long will it take me to pay off that fed loan? Is refi an option or is it too low to bother? Ideally would like to get it done as quickly as possible if refi isn't an option.
3. How long to pay off parents? (Note: they want the money back, but want me to pay down the fed loan first, and don't seem to be too stressed about getting it back fast.) Is there something I should be doing with salary, like 401k or something, before repaying them?

gabewatch
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Re: Student loan payments: Actual numbers

Postby gabewatch » Mon Apr 04, 2016 11:18 pm

[quote="petra"]

-about 70-80k in loans from family. Interest with parents not set in stone but around 1-2%.

I'd like to start being independent from parents. . .

You're about 70-80k away.

Tls2016
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Re: Student loan payments: Actual numbers

Postby Tls2016 » Mon Apr 04, 2016 11:39 pm

gabewatch wrote:
petra wrote:
-about 70-80k in loans from family. Interest with parents not set in stone but around 1-2%.

I'd like to start being independent from parents. . .

You're about 70-80k away.


More than that with COA while living in a 3,000 apartment to study for the bar exam.

OP: your federal loans are minimal and it sounds like your parents don't care. If I were you I would live somewhere cheaply to study for the bar, but whatever you borrow you should be able to repay. It seems ridiculous to borrow money for a bar trip but knock yourself out.

Won't your firm expect the advance to be repaid as well?

My advice is to come up with a clear agreement to repay your parents and put it in writing. Get it all set up so you will know what your payment will be. You should maximize your retirement savings and a emergency fund too.

petra
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Re: Student loan payments: Actual numbers

Postby petra » Tue Apr 05, 2016 12:19 am

Tls2016 wrote:
gabewatch wrote:
petra wrote:
-about 70-80k in loans from family. Interest with parents not set in stone but around 1-2%.

I'd like to start being independent from parents. . .

You're about 70-80k away.


More than that with COA while living in a 3,000 apartment to study for the bar exam.

OP: your federal loans are minimal and it sounds like your parents don't care. If I were you I would live somewhere cheaply to study for the bar, but whatever you borrow you should be able to repay. It seems ridiculous to borrow money for a bar trip but knock yourself out.

Won't your firm expect the advance to be repaid as well?

My advice is to come up with a clear agreement to repay your parents and put it in writing. Get it all set up so you will know what your payment will be. You should maximize your retirement savings and a emergency fund too.



Yeah, I'm aware I'm not financially independent from parents until I repay them (and would like to do that quickly since they were nice enough to loan). Thank you for advice re setting up agreement in writing.

How much of net pay per paycheck should go toward retirement and emergency savings?

Unfortunately, lease is up and I have to move. Don't want to move twice in less than six months so figured I'd just move into a permanent place a bit earlier. Also don't want roommates while in bar study.

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TheWalkingDebt
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Re: Student loan payments: Actual numbers

Postby TheWalkingDebt » Fri Apr 08, 2016 12:06 pm

As an incoming 0L this thread has been invaluable in helping me to prepare myself mentally for various situations. I think it would be helpful for some of us who are trying to be more prepared financially if those who have gone through the entire law school process could discuss non-scholarship ways of reducing debt load (the obvious being a reduction in QOL). How much does being a TA help? Some folks were SAs in 1L summer, best way to go about this (from what I understand it is quite difficult to get an SA position as a 1L)?

Based on my current scholarship/other numbers, I'm probably going to end up in the Johann wheelhouse of 215k in loans with undergrad/grad/law school combined (stoked to qualify for REPAYE though). It seems like REPAYE is the best option for at least year 1 (and probably 2-3 years). But if there are preventative ways to mitigate some loans and keep my debt under 185k total (starting from 70k in undergrad and grad), it'd be great to get a better understanding of how to go about that. Thanks everyone again!

I've been riding these beautiful minimum payments for undergrad and grad loans for 4 years now. Paying the minimum is nice.

Numbers (anticipated)
Debt: ~215k (70k from undergrad/grad going into 1L year)
Savings: ~20k at start of 1L
Job goal: big law (I'm one of those rare sadists that loves the grind).

I'm curious what you all think would be the best approach for me if these numbers were to not change dramatically one way or the other.

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Danger Zone
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Re: Student loan payments: Actual numbers

Postby Danger Zone » Fri Apr 08, 2016 12:29 pm

I'd highly recommend you not go to a law school that will cost you $200k, for starters.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Apr 08, 2016 3:12 pm

Nevermind.
Last edited by Anonymous User on Sat Apr 09, 2016 5:44 pm, edited 1 time in total.

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jessuf
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Re: Student loan payments: Actual numbers

Postby jessuf » Fri Apr 08, 2016 3:44 pm

I want to switch from IBR to REPAYE. Can I only do that when my recertification period comes up?

LarrySanders
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Re: Student loan payments: Actual numbers

Postby LarrySanders » Sat Apr 09, 2016 1:58 am

TheWalkingDebt wrote:Job goal: big law (I'm one of those rare sadists that loves the grind).

Unless you have a previous career in I-banking you have no idea what the grind is.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Apr 09, 2016 3:14 am

jessuf wrote:I want to switch from IBR to REPAYE. Can I only do that when my recertification period comes up?


Pretty sure you can switch whenever and the application process is the same as what you do when you re certify. Log in to loan provider and just click change repayment plan. I think but I don't fuck with this

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Apr 13, 2016 5:25 pm

Graduating in a month and unsure about what to do regarding my loans.

Debt = $200k
Income = Biglaw market ($160k)

I'm thinking about refinancing as opposed to PAYE...is that TCR given my debt load?

Also, a wealthy uncle of mine has offered to beat interest rate quotes from refi lenders if I decide to go that route. He said he'd give me the same terms (10 year repayment) with a fixed rate .5% below the best of what either SoFi, Commonbond, or DRB would offer. I'm inclined to take him up on the offer given it'd be nice to have my debt off the books (credit purposes) and to save on the interest, but I'm a bit wary of being in debt to someone in my family. Any thoughts?

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Danger Zone
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Re: Student loan payments: Actual numbers

Postby Danger Zone » Wed Apr 13, 2016 5:32 pm

How long does it take to go from standard repayment to IBR or REPAYE? I applied a couple weeks ago and really want them to hurry up. Damn loans.

WhiteCollarBlueShirt
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Re: Student loan payments: Actual numbers

Postby WhiteCollarBlueShirt » Wed Apr 13, 2016 5:49 pm

Anonymous User wrote:Graduating in a month and unsure about what to do regarding my loans.

Debt = $200k
Income = Biglaw market ($160k)

I'm thinking about refinancing as opposed to PAYE...is that TCR given my debt load?

Also, a wealthy uncle of mine has offered to beat interest rate quotes from refi lenders if I decide to go that route. He said he'd give me the same terms (10 year repayment) with a fixed rate .5% below the best of what either SoFi, Commonbond, or DRB would offer. I'm inclined to take him up on the offer given it'd be nice to have my debt off the books (credit purposes) and to save on the interest, but I'm a bit wary of being in debt to someone in my family. Any thoughts?


I'll let you know in about 16-18 years. I am your future. I chose PAYE (I also had more debt than you); friends' chose SoFi. I left biglaw cause screw it, those servicing debt providers are still all tied to biglaw. They'll probably feel better than me in their late 30's (though who knows), but I 1000% feel better than them in my late 20's.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Wed Apr 13, 2016 5:56 pm

^ a part of me really hopes people stick around that long because as a non big law refi person (around 180k or so total debt at graduation), I'm very curious to see how we all turn out financially. I have nine more years on my refi, so I should be debt free in my mid to late 30s. We'll see how every other financial aspect of my life goes. If nothing else, I'm forced not to live too extravagantly.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Wed Apr 13, 2016 5:58 pm

I'd go PAYE but you can justify it either way as long as you get a low enough interest rate on the refi. I wouldn't borrow from your uncle or any family member unless it's the kind of relationship where the guy will likely just forgive a bunch of it down the road.

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Wed Apr 13, 2016 6:00 pm

JenDarby wrote:^ a part of me really hopes people stick around that long because as a non big law refi person (around 180k or so total debt at graduation), I'm very curious to see how we all turn out financially. I have nine more years on my refi, so I should be debt free in my mid to late 30s. We'll see how every other financial aspect of my life goes. If nothing else, I'm forced not to live too extravagantly.

For some reason the debt doesn't sound SO bad when I'm like "yeah, ten years is totally reasonable. Hell, 20 years doesn't sound that bad" until I put it in terms of what age I'll be.

Thinking I'll be debt free at 39 on a standard plan makes me wanna barf.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Wed Apr 13, 2016 6:01 pm

Mlk&Ckies wrote:
JenDarby wrote:^ a part of me really hopes people stick around that long because as a non big law refi person (around 180k or so total debt at graduation), I'm very curious to see how we all turn out financially. I have nine more years on my refi, so I should be debt free in my mid to late 30s. We'll see how every other financial aspect of my life goes. If nothing else, I'm forced not to live too extravagantly.

For some reason the debt doesn't sound SO bad when I'm like "yeah, ten years is totally reasonable. Hell, 20 years doesn't sound that bad" until I put it in terms of what age I'll be.

Thinking I'll be debt free at 39 on a standard plan makes me wanna barf.

This is one of the many reasons I couldn't do 20 years. I would like to not have to even consider law school debt sooner rather than later.

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A. Nony Mouse
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Re: Student loan payments: Actual numbers

Postby A. Nony Mouse » Wed Apr 13, 2016 7:34 pm

@TheWalkingDebt - if you get SAs both summer at standard biglaw market rates, that's $60k pre-tax. Not sure what that works out to post-tax, and you may have to pay more for housing, but that's the easiest way to reduce your loans (although people suggest the money doesn't go as far as you'd expect).

I'm honestly not convinced there are any other really meaningful ways to reduce debt while in school, as opposed to before you go - non-SA jobs are either unpaid or pay very little, and you have the issue of paying for living expenses over the summer when you don't have loans. Most legal jobs during the school year don't pay much, either, and there are only so many hours you can work. I'm sure people who are careful can shave off a few thousands but in the grand scheme of debt it's not a lot.

(A few people hit the semi-holy grail of getting a TAship in another grad department which comes with a tuition waiver and stipend. This is highly dependent on your school and your qualifications - not all schools offer those benefits, and I think most people who do this have advanced degrees.)

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A. Nony Mouse
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Re: Student loan payments: Actual numbers

Postby A. Nony Mouse » Wed Apr 13, 2016 7:41 pm

Re: changing plans - I submitted everything to switch in March 28, and got an email yesterday telling me they had processed my request. (Of course they also told me I could log on to see the results or wait for the letter, but when I log on, the results don't seem to be there, so... But we'll see. It may be my turn to sit on hold with FedLoan.)

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Apr 13, 2016 10:42 pm

Danger Zone wrote:I'd highly recommend you not go to a law school that will cost you $200k, for starters.


I love you.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Wed Apr 13, 2016 10:46 pm

Anonymous User wrote:
Danger Zone wrote:I'd highly recommend you not go to a law school that will cost you $200k, for starters.


I love you.

mods please out this abuse of anon

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zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Wed Apr 13, 2016 10:46 pm

JenDarby wrote:
Anonymous User wrote:
Danger Zone wrote:I'd highly recommend you not go to a law school that will cost you $200k, for starters.


I love you.

mods please out this abuse of anon


Ha! Accidental anon. No shame to show my face.

Pokemon
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Re: Student loan payments: Actual numbers

Postby Pokemon » Wed Apr 13, 2016 11:49 pm

When switching from IBR to repaye, do advance IBR payments carry over? i have paid so much on IBR that my next payment is not until September. If I switch to repaye, do I still have this buffer or do I start all over and have to pay next month.




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