Student loan payments: Actual numbers

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Thu Apr 14, 2016 12:26 am

Danger Zone wrote: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.

not sure. usually a month. but they will hook you up with a deferment while you wait. just tell them you cant afford that payment.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Thu Apr 14, 2016 12:28 am

Pokemon wrote: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.

not sure, but if they dont carry over, just stay on IBR until september and dont switch until then.

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Danger Zone
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Re: Student loan payments: Actual numbers

Postby Danger Zone » Thu Apr 14, 2016 7:22 am

Thanks johann and anony.



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

:lol:

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Apr 15, 2016 12:14 pm

Anonymous User wrote:
Anonymous User wrote:Debt: about $110,000 (walked away from law school: $85,000)
Payments: ~$4,000 or $5,000/mo + bonus
Income: $160,000 (first year salary)
Important info: Work in biglaw in NY; worked TA jobs during law school; had 2 summers of big-law (threw in everything to loans); put advance into loans. Started firm job in September 2014. Finished paying off loans on December 31, 2015. Did not re-finance.



Congrats on being done with loans. Do you mind sharing your rent/living expenses over the course of the year? Any advice based on your experience paying down loans so quickly?

I have about 60k left (after refinancing to ~3% and a starting loan balance of 70k) as a biglaw first year. Trying to determine whether I aggressively pay down (which it seems like you did) or invest the extra money. I think the psychological impact definitely gets to me whenever I see the balance remaining but I'm pretty sure investing is a long-term better move because of my 3% interest rate.


I lived in a studio apartment in the UWS for $2,000-2,200 a month (still live there, though the rent did increase marginally.) Didn't do a lot of going out: maybe a couple of awful Tinder dates. Most of the meals were covered by working late or paid by the firm. No saving, unfortunately. And no 401k. Wanted to nip the loans in the bud ASAP. Good-luck!

FYI: now with my loans out of the way, I'm now doing max contributions for my 401k and saving the same amount as I previously paid on my loans ($4-5K each month).

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skers
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Re: Student loan payments: Actual numbers

Postby skers » Fri Apr 15, 2016 3:28 pm

I think either PAYE or refinance are defensible. I went refi and I'm glad I did. I pay around $3k a month to loans and I definitely spend more money than I should on going out and things and I'm pretty comfortable. Will have loans paid off in 3 years or so.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sat Apr 16, 2016 9:08 am

Hi everyone, I'm looking to benefit from past collective wisdom here

Current 3L, biglaw gig in NYC lined up, but will clerk in 2 years (2018-19)

Debt: 195,000
Loans: All fed.
Interest: between 6.8-7.2%

Since I have a hard exit date, I'm looking to aggressively pay off loans as much as possible. In my instance, does it make sense to refinance?

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Danger Zone
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Re: Student loan payments: Actual numbers

Postby Danger Zone » Sat Apr 16, 2016 10:10 am

Whoa I didn't know REPAYE subsidizes interest, whether your underlying loans are subsidized or not. Just copped 8)

Website wrote:If you have subsidized loans and your monthly payment amount under REPAYE is not sufficient to pay the amount of interest that accrues on a monthly basis, the federal government will subsidize 100% of that accruing interest for the first three consecutive years. After the three-year period is over, the interest that's not covered by your monthly payment will be subsidized at 50% instead of 100%.

Also, if you have unsubsidized loans, your unsubsidized interest will be subsidized at 50% for any period(s) of time that your REPAYE monthly payment due is not sufficient to pay the monthly interest.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sat Apr 16, 2016 11:48 am

Anonymous User wrote:Hi everyone, I'm looking to benefit from past collective wisdom here

Current 3L, biglaw gig in NYC lined up, but will clerk in 2 years (2018-19)

Debt: 195,000
Loans: All fed.
Interest: between 6.8-7.2%

Since I have a hard exit date, I'm looking to aggressively pay off loans as much as possible. In my instance, does it make sense to refinance?


Your case makes a lot of sense to refinance. However, calculate how much loan you'd actually pay off before clerking then refinance only those portions (you don't have to refinance the whole thing, but can refinance parts of your loans). Then once you start clerking, I think it's safe to keep the rest of your loan as federal loans rather than private loans.

Obviously, after refinanced, you'd use your biglaw salary to pay off the refinanced low-interest loans, but the federal portion.

Jchance
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Re: Student loan payments: Actual numbers

Postby Jchance » Sat Apr 16, 2016 11:50 am

^accidental anon

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Sat Apr 16, 2016 12:16 pm

Anonymous User wrote:Hi everyone, I'm looking to benefit from past collective wisdom here

Current 3L, biglaw gig in NYC lined up, but will clerk in 2 years (2018-19)

Debt: 195,000
Loans: All fed.
Interest: between 6.8-7.2%

Since I have a hard exit date, I'm looking to aggressively pay off loans as much as possible. In my instance, does it make sense to refinance?

What's the plan post clerkship?

zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Sat Apr 16, 2016 1:49 pm

Has someone explained if REPAYE is better than PAYE?

zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Sat Apr 16, 2016 1:50 pm

OP you don't want to refinance if you want to go into government.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sat Apr 16, 2016 1:50 pm

Tiago Splitter wrote:
Anonymous User wrote:Hi everyone, I'm looking to benefit from past collective wisdom here

Current 3L, biglaw gig in NYC lined up, but will clerk in 2 years (2018-19)

Debt: 195,000
Loans: All fed.
Interest: between 6.8-7.2%

Since I have a hard exit date, I'm looking to aggressively pay off loans as much as possible. In my instance, does it make sense to refinance?

What's the plan post clerkship?


OP here: As of now, not really sure. I'm looking to start a family, but on the other hand, after some seriously long discussions with ausa's and others, working for the govt sounds pretty good too. That said, I can't complain about biglaw pay

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Sat Apr 16, 2016 1:54 pm

zot1 wrote:Has someone explained if REPAYE is better than PAYE?

Benefits of REPAYE:

1) Available to anyone regardless of when you took your first loan
2) Government subsidizes 50% of your interest

Drawbacks of REPAYE:

1) Regardless of whether you file jointly or separately, your spouse's income is added to yours
2) You have to make payments for 25 years rather than 20 to get forgiveness

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Sat Apr 16, 2016 1:55 pm

Anonymous User wrote:
Tiago Splitter wrote:
Anonymous User wrote:Hi everyone, I'm looking to benefit from past collective wisdom here

Current 3L, biglaw gig in NYC lined up, but will clerk in 2 years (2018-19)

Debt: 195,000
Loans: All fed.
Interest: between 6.8-7.2%

Since I have a hard exit date, I'm looking to aggressively pay off loans as much as possible. In my instance, does it make sense to refinance?

What's the plan post clerkship?


OP here: As of now, not really sure. I'm looking to start a family, but on the other hand, after some seriously long discussions with ausa's and others, working for the govt sounds pretty good too. That said, I can't complain about biglaw pay

I'd just go on PAYE and save a bunch of money while you work. If you end up with 10 years of government service all the loans will get forgiven tax free and you'll be kicking yourself if you paid it off with your own money early on.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Apr 16, 2016 2:01 pm

Danger Zone wrote:Whoa I didn't know REPAYE subsidizes interest, whether your underlying loans are subsidized or not. Just copped 8)

Website wrote:If you have subsidized loans and your monthly payment amount under REPAYE is not sufficient to pay the amount of interest that accrues on a monthly basis, the federal government will subsidize 100% of that accruing interest for the first three consecutive years. After the three-year period is over, the interest that's not covered by your monthly payment will be subsidized at 50% instead of 100%.

Also, if you have unsubsidized loans, your unsubsidized interest will be subsidized at 50% for any period(s) of time that your REPAYE monthly payment due is not sufficient to pay the monthly interest.


yeah man. the gamesmanship allowed in federal debt is a huge reason i think its way preferable to private lenders. 4% interest differences really arent worth it.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Apr 16, 2016 2:03 pm

Anonymous User wrote:Hi everyone, I'm looking to benefit from past collective wisdom here

Current 3L, biglaw gig in NYC lined up, but will clerk in 2 years (2018-19)

Debt: 195,000
Loans: All fed.
Interest: between 6.8-7.2%

Since I have a hard exit date, I'm looking to aggressively pay off loans as much as possible. In my instance, does it make sense to refinance?


since you have a clerkship lined up and a 2 year exit from biglaw, i think this is a perfect situation for PAYE becuase your debt payments will remain minimal and yuo get to kick the can down the road for 4 years before determining whether aggressive repayment is the right option.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Sat Apr 16, 2016 2:06 pm

JohannDeMann wrote:
Anonymous User wrote:Hi everyone, I'm looking to benefit from past collective wisdom here

Current 3L, biglaw gig in NYC lined up, but will clerk in 2 years (2018-19)

Debt: 195,000
Loans: All fed.
Interest: between 6.8-7.2%

Since I have a hard exit date, I'm looking to aggressively pay off loans as much as possible. In my instance, does it make sense to refinance?


since you have a clerkship lined up and a 2 year exit from biglaw, i think this is a perfect situation for PAYE becuase your debt payments will remain minimal and yuo get to kick the can down the road for 4 years before determining whether aggressive repayment is the right option.

I agree with this for anon. If there's a CHANCE of PSLF then PAYE is nearly always the right decision

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sat Apr 16, 2016 2:08 pm

For you finance people out there:

Starting biglaw in the spring. Market paying non-NYC firm. Have about $200,000 in loans. about 150,000 of is @ 5.5%, the other $50,000 is at 7.2%.

I think I may want to be a prosecutor after a couple years of BigLaw, so I want the safety net of federal loans. But, I am not confident enough in REPAYE (or that I will become a prosecutor) that I want to go all in on that either. My thought is: refinance the high interest $50,000 @ 2.1% variable, put the remainder of $150,000 in PAYE. Pay a small REPAYE payment then put the rest toward the refinanced $50,000 to try and pay that off as quick as possible. That way, after 2 years of BIgLaw I'll have that high interest $50K loan paid off, leaving me with aprox. <$150K in federal loans. Then I can make the call from there if I want to jump to GOV and RePaye the rest, or stick in BigLaw a couple more years and pay the rest off. What do y'all think?

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Sat Apr 16, 2016 2:12 pm

For you I say PAYE. 5.5% isn't that much higher than your refi rate will be, and you will pay off the 50k at 7.2% first. Don't give up your safety net on 150k in loans for a couple percent off your interest rate. And at that rate there's not much of a point in doing refi on 50k.

I refi'd (and have zero regrets) because my average was 7.5% and I was 99% sure I would never go Gov. If it had been 5.5% I probably wouldn't have refi'd so easily.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Apr 16, 2016 2:12 pm

zot1 wrote:Has someone explained if REPAYE is better than PAYE?


this is a humongous IT DEPENDS.

depends on when you went to law school and whether your loans are subsidized or not. depends on marriage situation. depends on tax bomb in 20 vs 25 years (i can dream up situations where it would be preferable to have the longer repayment under REPAYE to avoid a tax bomb if your payments are low enough). i havent even begun to run the numbers for myself in this situation and it would be a major daunting task. you would prob need some sort of financial advisor to run these sorts of calcs and theyd have to be very good. i think in most situations, PAYE if eligible will be the better route ( solely because of the shorter time horizon). but there's so many unknown factors its tough to know.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sat Apr 16, 2016 2:14 pm

JenDarby wrote:For you I say PAYE. 5.5% isn't that much higher than your refi rate will be, and you will pay off the 50k at 7.2% first. Don't give up your safety net on 150k in loans for a couple percent off your interest rate. And at that rate there's not much of a point in doing refi on 50k.

I refi'd (and have zero regrets) because my average was 7.5% and I was 99% sure I would never go Gov. If it had been 5.5% I probably wouldn't have refi'd so easily.


Thanks - but I think you may have misread my post. I am only thinking about refinancing $50K of it - the high 7.2% interest loan, at a variable rate of 2.1%

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Apr 16, 2016 2:16 pm

Anonymous User wrote:For you finance people out there:

Starting biglaw in the spring. Market paying non-NYC firm. Have about $200,000 in loans. about 150,000 of is @ 5.5%, the other $50,000 is at 7.2%.

I think I may want to be a prosecutor after a couple years of BigLaw, so I want the safety net of federal loans. But, I am not confident enough in REPAYE (or that I will become a prosecutor) that I want to go all in on that either. My thought is: refinance the high interest $50,000 @ 2.1% variable, put the remainder of $150,000 in PAYE. Pay a small REPAYE payment then put the rest toward the refinanced $50,000 to try and pay that off as quick as possible. That way, after 2 years of BIgLaw I'll have that high interest $50K loan paid off, leaving me with aprox. <$150K in federal loans. Then I can make the call from there if I want to jump to GOV and RePaye the rest, or stick in BigLaw a couple more years and pay the rest off. What do y'all think?


The hedging is probably one of the dumbest things in my opinion. Go all or none. The reason is simple:

The benfit of private refi is locking in a low interest rate is that it doesn't accrue as much interest, so must of these benefits are recognized in years 8-10 of the repayment rather than the first couple years.

The benfit of of federal loans is low payments initially to max cash flow, federal protections in case you get economy fucked, and flexibility in planning with a little bit of risk towards on the future of these policies.

By hedging and go half and half or 1/4 and 3/4 here, you lose the benefit of maxing cash flow to aggressively pay down a low interest rate and thereby lose the benefits of the low interest rates in the 8-10 year time frame. This is mathemmatically the dumbest way to go. Make a decision and stick to your guins.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Sat Apr 16, 2016 2:19 pm

Anonymous User wrote:I think I may want to be a prosecutor after a couple years of BigLaw, so I want the safety net of federal loans. But, I am not confident enough in REPAYE (or that I will become a prosecutor) that I want to go all in on that either.

As long as you don't have awful spending habits, you're not going all in on PAYE or REPAYE by starting out on it. Just save all the money you'd be putting toward your loans, and if you end up in the private sector you'll have a bunch of cash you can toss at the loans as quickly or as slowly as you'd like. It'll cost you a little bit of extra interest but it's worth it for the possibility of massive forgiveness down the line.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Sat Apr 16, 2016 2:37 pm

Anonymous User wrote:
JenDarby wrote:For you I say PAYE. 5.5% isn't that much higher than your refi rate will be, and you will pay off the 50k at 7.2% first. Don't give up your safety net on 150k in loans for a couple percent off your interest rate. And at that rate there's not much of a point in doing refi on 50k.

I refi'd (and have zero regrets) because my average was 7.5% and I was 99% sure I would never go Gov. If it had been 5.5% I probably wouldn't have refi'd so easily.


Thanks - but I think you may have misread my post. I am only thinking about refinancing $50K of it - the high 7.2% interest loan, at a variable rate of 2.1%

Last sentence of my first paragraph. You wont save that much on 50k in the scheme of things and if there's a CHANCE of forgiveness I would gamble on that rather than the partial refi and having to pay off 50k in its entirety.




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