Student loan payments: Actual numbers

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Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Nov 30, 2016 1:22 am

2L here. Incurring just tuition, about 60k a year, in debt. Living expenses are covered. All federal loans and going into big law. What would be a good way to get a jump on lowering my final debt? Should I look into private loans? Start paying down with what I have left over each month? Am I better off building a nest egg and using big law salary to pay it down? Concerned about waiting for big law in case I don't last long.

ETA: Assuming I use some money from my SA, I'll have a total debt at graduation of ~195k

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Wed Nov 30, 2016 12:13 pm

Anonymous User wrote:Ok fair enough. I don't fully understand the first paragraph. It wasn't really a question to me of whether to pay principal instead of interest but rather whether to pay interest or nothing at all. I was just curious if it would save me any material amount to pay off the interest prior to capitalization. The second paragraph seems to answer this though, and assuming that is right, it makes sense. In doing the calcs myself too it seems like the interest compounding doesn't add up to as much as I had originally thought.

Thanks.

The reason I framed it that way was to point out that paying the unpaid interest is never going to be better than paying principal (because the unpaid interest didn't start accruing interest until you enter repayment whereas the principal is already accruing interest). So it shouldn't be a question of whether to pay the unpaid interest or not. The question should be whether to make a payment at all or not.

And yea, paying the unpaid instead doesn't save all that much. It saves your interest rate applied to that amount over the time it takes to pay back the loan. If you're paying out back quickly and the unpaid interest amount is only a few grand, that's going to add up to less than a thousand.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Wed Nov 30, 2016 12:16 pm

Anonymous User wrote:2L here. Incurring just tuition, about 60k a year, in debt. Living expenses are covered. All federal loans and going into big law. What would be a good way to get a jump on lowering my final debt? Should I look into private loans? Start paying down with what I have left over each month? Am I better off building a nest egg and using big law salary to pay it down? Concerned about waiting for big law in case I don't last long.

ETA: Assuming I use some money from my SA, I'll have a total debt at graduation of ~195k

What do you mean left over? If you don't need to borrow that much, don't borrow it in the first place. What do you mean "build a nest egg"? With what money?

Once you start in biglaw, you should build an emergency fund (you can use SA money for that if you want).

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Nov 30, 2016 1:10 pm

Asking a question regarding my wife's loans. Married in August. Here is our background:

Salary 100K. My loans are 70K and have been refinanced.
Wife's salary is 60K with around 50K in loans. She was doing income based repayment before we were married, but now 10% of her monthly income is taking into account my salary and it's pretty high.

Is the only option at this point for us to pay her loans off on the standard 10 year plan/look at refinancing like I did?

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Wed Nov 30, 2016 2:19 pm

Anonymous User wrote:Asking a question regarding my wife's loans. Married in August. Here is our background:

Salary 100K. My loans are 70K and have been refinanced.
Wife's salary is 60K with around 50K in loans. She was doing income based repayment before we were married, but now 10% of her monthly income is taking into account my salary and it's pretty high.

Is the only option at this point for us to pay her loans off on the standard 10 year plan/look at refinancing like I did?

You can do PAYE and file separately to avoid including your income. Otherwise with that balance I'd think refinancing and just paying it off is the way to go.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Wed Nov 30, 2016 2:26 pm

Anonymous User wrote:Asking a question regarding my wife's loans. Married in August. Here is our background:

Salary 100K. My loans are 70K and have been refinanced.
Wife's salary is 60K with around 50K in loans. She was doing income based repayment before we were married, but now 10% of her monthly income is taking into account my salary and it's pretty high.

Is the only option at this point for us to pay her loans off on the standard 10 year plan/look at refinancing like I did?

Is she planning on riding the income-based plan to forgiveness? PSLF or the regular 20/25 year?

I agree with Tiago that refi and pay off is likely the best plan based on your and her balances.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Nov 30, 2016 3:11 pm

bk1 wrote:
Anonymous User wrote:2L here. Incurring just tuition, about 60k a year, in debt. Living expenses are covered. All federal loans and going into big law. What would be a good way to get a jump on lowering my final debt? Should I look into private loans? Start paying down with what I have left over each month? Am I better off building a nest egg and using big law salary to pay it down? Concerned about waiting for big law in case I don't last long.

ETA: Assuming I use some money from my SA, I'll have a total debt at graduation of ~195k

What do you mean left over? If you don't need to borrow that much, don't borrow it in the first place. What do you mean "build a nest egg"? With what money?

Once you start in biglaw, you should build an emergency fund (you can use SA money for that if you want).


Money left over from living expenses and SA salary.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Nov 30, 2016 3:12 pm

bk1 wrote:
Anonymous User wrote:2L here. Incurring just tuition, about 60k a year, in debt. Living expenses are covered. All federal loans and going into big law. What would be a good way to get a jump on lowering my final debt? Should I look into private loans? Start paying down with what I have left over each month? Am I better off building a nest egg and using big law salary to pay it down? Concerned about waiting for big law in case I don't last long.

ETA: Assuming I use some money from my SA, I'll have a total debt at graduation of ~195k

What do you mean left over? If you don't need to borrow that much, don't borrow it in the first place. What do you mean "build a nest egg"? With what money?

Once you start in biglaw, you should build an emergency fund (you can use SA money for that if you want).


Money left over from living expenses and from SA salary.

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Re: Student loan payments: Actual numbers

Postby Johann » Wed Nov 30, 2016 3:18 pm

195k in debt and concerned about biglaw... gotta PAYE

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Wed Nov 30, 2016 4:29 pm

Anonymous User wrote:
bk1 wrote:
Anonymous User wrote:2L here. Incurring just tuition, about 60k a year, in debt. Living expenses are covered. All federal loans and going into big law. What would be a good way to get a jump on lowering my final debt? Should I look into private loans? Start paying down with what I have left over each month? Am I better off building a nest egg and using big law salary to pay it down? Concerned about waiting for big law in case I don't last long.

ETA: Assuming I use some money from my SA, I'll have a total debt at graduation of ~195k

What do you mean left over? If you don't need to borrow that much, don't borrow it in the first place. What do you mean "build a nest egg"? With what money?

Once you start in biglaw, you should build an emergency fund (you can use SA money for that if you want).


Money left over from living expenses and from SA salary.

It may be more cost effective to pay part of 3L tuition yourself (and thus borrow less) than paying back what you owe from 1L/2L. You'd have to do the math to compare the interest you accrue in the mean time versus the origination fees for your 3L loans.

What you should do depends on whether you care about having an emergency fund built now or later. You would save money in the long run by using your current cash to reduce your debt, but it would be riskier because you'd have less cash on hand in the event of an emergency. You need to do your own risk assessment whether getting a jump start and saving some money is worth having less of an emergency fund for you.

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Re: Student loan payments: Actual numbers

Postby pumpkinmann » Wed Nov 30, 2016 6:48 pm

Has anyone had experience with refinancing through First Republic Bank? I've done the research, know about the caveats of basically banking with them and geography, and found a couple people with good experiences, but hoping for more input. Their interests rates look great, and banking with them seems a little downside for the savings.

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Re: Student loan payments: Actual numbers

Postby LaLiLuLeLo » Wed Nov 30, 2016 6:58 pm

pumpkinmann wrote:Has anyone had experience with refinancing through First Republic Bank? I've done the research, know about the caveats of basically banking with them and geography, and found a couple people with good experiences, but hoping for more input. Their interests rates look great, and banking with them seems a little downside for the savings.


Yeah, I re-fi'd recently. They have somewhat strict underwriting requirements, but if you make it past that hurdle it seems like a generally good idea if you're positive you don't want/need the protections of a federal student loan. Banking with them isn't really a big deal. You need to switch your paycheck direct deposit to their checking account, and have loan autopay. $3,500 minimum average balance. But they refund ATM fees, have mobile check deposit, and nothing is really stopping you from continuing to use any other accounts you have. Did you have any specific questions?

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Re: Student loan payments: Actual numbers

Postby bk1 » Wed Nov 30, 2016 7:04 pm

LaLiLuLeLo wrote:
pumpkinmann wrote:Has anyone had experience with refinancing through First Republic Bank? I've done the research, know about the caveats of basically banking with them and geography, and found a couple people with good experiences, but hoping for more input. Their interests rates look great, and banking with them seems a little downside for the savings.


Yeah, I re-fi'd recently. They have somewhat strict underwriting requirements, but if you make it past that hurdle it seems like a generally good idea if you're positive you don't want/need the protections of a federal student loan. Banking with them isn't really a big deal. You need to switch your paycheck direct deposit to their checking account, and have loan autopay. $3,500 minimum average balance. But they refund ATM fees, have mobile check deposit, and nothing is really stopping you from continuing to use any other accounts you have. Did you have any specific questions?

Don't forget: free cookies in their lobbies.

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Re: Student loan payments: Actual numbers

Postby pumpkinmann » Wed Nov 30, 2016 7:05 pm

LaLiLuLeLo wrote:
pumpkinmann wrote:Has anyone had experience with refinancing through First Republic Bank? I've done the research, know about the caveats of basically banking with them and geography, and found a couple people with good experiences, but hoping for more input. Their interests rates look great, and banking with them seems a little downside for the savings.


Yeah, I re-fi'd recently. They have somewhat strict underwriting requirements, but if you make it past that hurdle it seems like a generally good idea if you're positive you don't want/need the protections of a federal student loan. Banking with them isn't really a big deal. You need to switch your paycheck direct deposit to their checking account, and have loan autopay. $3,500 minimum average balance. But they refund ATM fees, have mobile check deposit, and nothing is really stopping you from continuing to use any other accounts you have. Did you have any specific questions?


I guess I was wondering how pushy they are with the whole personal banking relationship. I had a brief call with a banker, and he emphasized how they were really trying to do more than refinance and build a relationship, and I wondered how that manifested itself.

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Re: Student loan payments: Actual numbers

Postby bk1 » Wed Nov 30, 2016 7:07 pm

pumpkinmann wrote:I guess I was wondering how pushy they are with the whole personal banking relationship. I had a brief call with a banker, and he emphasized how they were really trying to do more than refinance and build a relationship, and I wondered how that manifested itself.

I have not been hassled once since I set it all up (over a year ago). I think their intent is to offer you a good service and then hope you like their approach and choose to use them for other services. Their customer experience has been great IME, but their other products haven't been good enough to warrant using (rates on checking/savings/CDs are mediocre, not sure whether their mortgages/other loans have attractive rates).

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Re: Student loan payments: Actual numbers

Postby anonnymouse » Wed Nov 30, 2016 7:07 pm

LaLiLuLeLo wrote:
pumpkinmann wrote:Has anyone had experience with refinancing through First Republic Bank? I've done the research, know about the caveats of basically banking with them and geography, and found a couple people with good experiences, but hoping for more input. Their interests rates look great, and banking with them seems a little downside for the savings.


Yeah, I re-fi'd recently. They have somewhat strict underwriting requirements, but if you make it past that hurdle it seems like a generally good idea if you're positive you don't want/need the protections of a federal student loan. Banking with them isn't really a big deal. You need to switch your paycheck direct deposit to their checking account, and have loan autopay. $3,500 minimum average balance. But they refund ATM fees, have mobile check deposit, and nothing is really stopping you from continuing to use any other accounts you have. Did you have any specific questions?

Apparently you don't even have to switch your whole paycheck direct deposit over. I initially funded with just over the $3500 min to avoid fees then have just enough of my paycheck deposited to cover the monthly auto-pay. They haven't said peep to me about it.

They haven't really had any communication with me but it's only been two months since my refi went through. Only thing I recall was a follow up email telling me about the referral bonus.

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LaLiLuLeLo
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Re: Student loan payments: Actual numbers

Postby LaLiLuLeLo » Wed Nov 30, 2016 7:08 pm

pumpkinmann wrote:
LaLiLuLeLo wrote:
pumpkinmann wrote:Has anyone had experience with refinancing through First Republic Bank? I've done the research, know about the caveats of basically banking with them and geography, and found a couple people with good experiences, but hoping for more input. Their interests rates look great, and banking with them seems a little downside for the savings.


Yeah, I re-fi'd recently. They have somewhat strict underwriting requirements, but if you make it past that hurdle it seems like a generally good idea if you're positive you don't want/need the protections of a federal student loan. Banking with them isn't really a big deal. You need to switch your paycheck direct deposit to their checking account, and have loan autopay. $3,500 minimum average balance. But they refund ATM fees, have mobile check deposit, and nothing is really stopping you from continuing to use any other accounts you have. Did you have any specific questions?


I guess I was wondering how pushy they are with the whole personal banking relationship. I had a brief call with a banker, and he emphasized how they were really trying to do more than refinance and build a relationship, and I wondered how that manifested itself.


Well, that's basically their business strategy and why they're offering loans with loan interest rates that can be discharged in BK to high income professionals. They want you to get your mortgage through them, car loans, manage your wealth (lol). But I don't hear from them at all, and really you can just ignore them if need be. They haven't been pushy with me but it may depend on your banker.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Thu Dec 01, 2016 2:06 am

Debt: ~250k
Job: PD in NYC
Pay: 50k pre-bar, 60k post-bar
Repayment plan: law school's LRAP plan, will be paid off in ten years with me paying a third of my income over 50k towards my loans.

sarahjane10
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Re: Student loan payments: Actual numbers

Postby sarahjane10 » Thu Dec 01, 2016 3:16 pm

Anonymous User wrote:
bk1 wrote:
Anonymous User wrote:2L here. Incurring just tuition, about 60k a year, in debt. Living expenses are covered. All federal loans and going into big law. What would be a good way to get a jump on lowering my final debt? Should I look into private loans? Start paying down with what I have left over each month? Am I better off building a nest egg and using big law salary to pay it down? Concerned about waiting for big law in case I don't last long.

ETA: Assuming I use some money from my SA, I'll have a total debt at graduation of ~195k

What do you mean left over? If you don't need to borrow that much, don't borrow it in the first place. What do you mean "build a nest egg"? With what money?

Once you start in biglaw, you should build an emergency fund (you can use SA money for that if you want).


Money left over from living expenses and SA salary.



So my opinion on this may not be completely accurate for you b/c I'm going the Public Interest Loan forgiveness route so I wasn't as worried about the compounding interest on my loans as you probably are since you'll be paying it off. I worked part time during most of law school and I ended up in your position where I usually had a little left over each semester and had to decide whether to pay some of that back into my loans, take out less the next semester, or to just stockpile it for a rainy day. And as someone who just graduated last May I'd recommend just stockpiling what you can in preparation for bar expenses. Bar expenses both the cost of taking the test plus the cost of basic living expenses you'll need to pay for basically the three months you're studying and aren't working add up really fast. I had assumed I'd just take out a bar loan for those but didn't qualify due to some credit issues so it was only because I had all that extra loan money saved up that I was able to pay for the bar and work little enough to still give me time to study. So I'd recommend just saving that extra because you have no idea when you may need it in law school.

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zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Sat Dec 03, 2016 3:20 pm

Question for the mathematically gifted: am I correct in saying that whether one's loan balance is 100k, 150k, or 250k, one's monthly payment would still be the same if under an IBR plan because the payment is solely tied to the income?

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Sat Dec 03, 2016 4:54 pm

zot1 wrote:Question for the mathematically gifted: am I correct in saying that whether one's loan balance is 100k, 150k, or 250k, one's monthly payment would still be the same if under an IBR plan because the payment is solely tied to the income?

Yes (though the tax on the forgiven amount if you don't do PSLF will vary drastically). You can see that easily here: https://studentloans.gov/myDirectLoan/m ... tor.action

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zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Sun Dec 04, 2016 8:30 pm

Thanks, BK.

Did I remember correctly that if one consolidates, the loan gets transferred to FedLoans?

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Sun Dec 04, 2016 9:27 pm

zot1 wrote:Thanks, BK.

Did I remember correctly that if one consolidates, the loan gets transferred to FedLoans?

Per https://www.nerdwallet.com/blog/loans/s ... ent-loans/ you get to choose unless you want to use PSLF:

You’ll have the option to pick either FedLoan Servicing, Great Lakes, Nelnet or Navient as your student loan servicer for your direct consolidation loan. . . . If you want to enroll in PSLF, you must choose FedLoanServicing.


Not sure if it's accurate.

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zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Sun Dec 04, 2016 9:36 pm

Ok, thank you so much!

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Re: Student loan payments: Actual numbers

Postby PriyaRai » Tue Dec 06, 2016 10:50 am

$153k fed loans at 7.2%
Refinance this week through Sofi- 10 year variable at 2.9%
Sofia variable cap at 8.9% is nice. Hardly much worse than my dreadful 7.2%
4th yr midlaw, $135k + bonus




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