Student loan payments: Actual numbers

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Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sat Feb 08, 2014 8:40 pm

2L here, so I owed about $27k in grad plus with 7.9% interest (out of $100K debt currently), the rest are either unsubsidized or grad plus with 5.4-6.4% interest. I do not need to take out loan in 3L year (SA gig +scholly+parental contribution).

Question is: in 3L year, should I take out the max of my unsubsidized loan ($20.5K at 5.4% interest) to put a dent into that $27K plus 7.9% interest? Unsure whether its smart to take out debt at lower interest to pay off debt at higher interest.

Edit: I think they charge something like 4% for taking out new debt

joblawl
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Re: Student loan payments: Actual numbers

Postby joblawl » Sun Feb 09, 2014 11:22 am

Anonymous User wrote:2L here, so I owed about $27k in grad plus with 7.9% interest (out of $100K debt currently), the rest are either unsubsidized or grad plus with 5.4-6.4% interest. I do not need to take out loan in 3L year (SA gig +scholly+parental contribution).

Question is: in 3L year, should I take out the max of my unsubsidized loan ($20.5K at 5.4% interest) to put a dent into that $27K plus 7.9% interest? Unsure whether its smart to take out debt at lower interest to pay off debt at higher interest.

Edit: I think they charge something like 4% for taking out new debt


I'm not sure about this, but I don't think Stafford loans have the 4% initiation fee. This is a straight up math problem. If there is no 4% initiation fee, it's a no-brainer. Taking out the stafford loan to pay off the grad plus loan is a great idea.

If there is a 4% fee, do the math. Run the numbers, under both scenarios, with a few different estimates on how much time it will take to pay off the loans. If you'll be able to pay off the loan really fast, it's not worth the fee. But there will be breaking point, it might be like 3 years (I don't really have an idea what it will be), and if it takes longer than that to pay off your loans, it's worth it to use the Stafford loan to pay off the Grad plus.

I bet if you do the math and realistically assess how long it will take you to pay off the loans, you'll find that it's worth it to take the fee and pay the lower interest rate.


Edit: "Stafford loans currently have up to a 1.0% origination fee for each loan disbursement." http://www.staffordloan.com/stafford-loan-info/faq/

Do it. Borrow from Peter to pay Paul. It will be cheaper and there is no added risk.
Last edited by joblawl on Sun Feb 09, 2014 11:27 am, edited 1 time in total.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Sun Feb 09, 2014 11:26 am

Stafford Loan origination fees are currently 1%.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sun Feb 09, 2014 11:30 am

joblawl wrote:
Anonymous User wrote:2L here, so I owed about $27k in grad plus with 7.9% interest (out of $100K debt currently), the rest are either unsubsidized or grad plus with 5.4-6.4% interest. I do not need to take out loan in 3L year (SA gig +scholly+parental contribution).

Question is: in 3L year, should I take out the max of my unsubsidized loan ($20.5K at 5.4% interest) to put a dent into that $27K plus 7.9% interest? Unsure whether its smart to take out debt at lower interest to pay off debt at higher interest.

Edit: I think they charge something like 4% for taking out new debt


I'm not sure about this, but I don't think Stafford loans have the 4% initiation fee. This is a straight up math problem. If there is no 4% initiation fee, it's a no-brainer. Taking out the stafford loan to pay off the grad plus loan is a great idea.

If there is a 4% fee, do the math. Run the numbers, under both scenarios, with a few different estimates on how much time it will take to pay off the loans. If you'll be able to pay off the loan really fast, it's not worth the fee. But there will be breaking point, it might be like 3 years (I don't really have an idea what it will be), and if it takes longer than that to pay off your loans, it's worth it to use the Stafford loan to pay off the Grad plus.

I bet if you do the math and realistically assess how long it will take you to pay off the loans, you'll find that it's worth it to take the fee and pay the lower interest rate.


Edit: "Stafford loans currently have up to a 1.0% origination fee for each loan disbursement." http://www.staffordloan.com/stafford-loan-info/faq/

Do it. Borrow from Peter to pay Paul. It will be cheaper and there is no added risk.


Awesome, thank you sir. I thought it makes sense but again, I'm unsure when it comes to loan (i.e. hidden fee).

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BuckinghamB
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Re: Student loan payments: Actual numbers

Postby BuckinghamB » Sun Feb 09, 2014 6:35 pm

Tried to ask this in the personal finance thread, but didn't get an answer. Anyone have an opinion on this?

BuckinghamB wrote:This summer I'm lucky enough to be to be living with family for my SA, so I'll have minimal COL during the summer.
Any thoughts on whether to make substantial interest payments with the extra summer money vs. using it for COA and avoiding origination fees for the following school year?

It seems like most of what I've read on TLS suggests the latter is what most people do, but the capitalized interest makes me cringe (right now it increases by like $30 per day). Granted, if I pay down interest I'd just have to re-borrow that amount at whatever the student loan interest rate would be for next year. But if next year's rate is less than the 6.8%-7.9% range, wouldn't it make more sense to pay my highest interest loans down ASAP?

Btw, all my loans are federal. I have basically no finance background, so I apologize if this is a dumb question. Any advice is greatly appreciated. Thanks!

wbaseball4ever
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Re: Student loan payments: Actual numbers

Postby wbaseball4ever » Tue Feb 25, 2014 7:31 pm

BuckinghamB wrote:This summer I'm lucky enough to be to be living with family for my SA, so I'll have minimal COL during the summer.
Any thoughts on whether to make substantial interest payments with the extra summer money vs. using it for COA and avoiding origination fees for the following school year?



I'd much rather keep the money for COL. If you use it to pay back loans and then run out of cash during the school year, you'll probably have already maxed out your federal loans. You'll be taking a private loan at a very high rate. Plus, you'll have origination fees.

If you're positive you'll be able to cover COL, start paying it back, but it doesn't make sense to do that if you're just going to have to take another loan out to cover COL.

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SleekFire
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Re: Student loan payments: Actual numbers

Postby SleekFire » Tue Mar 11, 2014 12:20 pm

Figured I'd post this to help some of you. I took advantage of the offer below. credit card balance transfer to 4.99% for the life of the transfer w/ no BT fees. Worked out great for me, but be careful not to "max out" the card to minimize the effect on your credit score.

Also, remember that federal loans have certain protections (IBR, forbearance, etc). You will lose that on the amount you transfer.

Note: you must become a penfed member which requires eligibility or a one time $20 donation.


https://www.penfed.org/Penfed-Promise/?WT.ac=1339

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Re: Student loan payments: Actual numbers

Postby username201 » Wed Mar 12, 2014 4:10 pm

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Last edited by username201 on Wed Mar 12, 2014 4:11 pm, edited 1 time in total.

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Re: Student loan payments: Actual numbers

Postby username201 » Wed Mar 12, 2014 4:11 pm

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withoutapaddle
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Re: Student loan payments: Actual numbers

Postby withoutapaddle » Thu Apr 17, 2014 8:31 pm

Holy hell that's a large monthly payment

I can't imagine the monthly payment for a JD/mba

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Orlandipo
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Re: Student loan payments: Actual numbers

Postby Orlandipo » Mon May 19, 2014 8:56 pm

Debt: 155k at the end of grace period, which is a 72k scholarship at T25 school, taking out full COL.
Split: all over the place, about half at 7.9%
Plan: 25 standard, for right now
Min. Payment: $1,253 a month
Salary: $62,000 (roughly)

Quick budget breakdown:
- After medical insurance + 401k contributions + withholding I'm taking home 3,400/month.
- After loan payments I'm down to $2,150/month for all costs
- After rent/util of $750/month, that leaves $1,400 for gas, food, cell phone, cable, internet, tithing (hurts), car insurance, whatever you're trying to save, and literally anything else that you need in life.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue May 20, 2014 1:41 am

withoutapaddle wrote:I can't imagine the monthly payment for a JD/mba


JD/MBA program grad. Total debt is about $263k @ an average rate of 6.35% making for a payment right around $3k/month on the 10 year plan. Going to do PAYE for as long as possible to direct all of my extra $ to the 7.9% loans.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue May 20, 2014 10:05 am

Anonymous User wrote:
withoutapaddle wrote:I can't imagine the monthly payment for a JD/mba


JD/MBA program grad. Total debt is about $263k @ an average rate of 6.35% making for a payment right around $3k/month on the 10 year plan. Going to do PAYE for as long as possible to direct all of my extra $ to the 7.9% loans.


Which loans are hit at 7.9%? Private?

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

Postby A. Nony Mouse » Tue May 20, 2014 10:24 am

Aren't GradPLUS loans around that?

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue May 20, 2014 11:57 am

A. Nony Mouse wrote:Aren't GradPLUS loans around that?


Grad plus that originated before the last student lending legislation went through are 7.9%

Now grad plus are 6.41%

09042014
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Re: Student loan payments: Actual numbers

Postby 09042014 » Tue May 20, 2014 1:01 pm

Anonymous User wrote:
A. Nony Mouse wrote:Aren't GradPLUS loans around that?


Grad plus that originated before the last student lending legislation went through are 7.9%

Now grad plus are 6.41%


Man I really got assfucked by the Bush admin

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue May 20, 2014 1:08 pm

Anonymous User wrote:
A. Nony Mouse wrote:Aren't GradPLUS loans around that?


Grad plus that originated before the last student lending legislation went through are 7.9%

Now grad plus are 6.41%


And they stay at 7.9% forever? That doesn't seem right...

09042014
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Re: Student loan payments: Actual numbers

Postby 09042014 » Tue May 20, 2014 1:11 pm

Anonymous User wrote:
Anonymous User wrote:
A. Nony Mouse wrote:Aren't GradPLUS loans around that?


Grad plus that originated before the last student lending legislation went through are 7.9%

Now grad plus are 6.41%


And they stay at 7.9% forever? That doesn't seem right...


It's not right but it's accurate.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Thu May 22, 2014 7:16 am

Desert Fox wrote:
Anonymous User wrote:
A. Nony Mouse wrote:Aren't GradPLUS loans around that?


Grad plus that originated before the last student lending legislation went through are 7.9%

Now grad plus are 6.41%


Man I really got assfucked by the Bush admin

They now vary each year so grads five or ten years from now will be talking about the assfucking obama delivered them. i just need em to stay low one more year.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Thu May 22, 2014 8:35 am

Tiago Splitter wrote:
Desert Fox wrote:
Anonymous User wrote:
A. Nony Mouse wrote:Aren't GradPLUS loans around that?


Grad plus that originated before the last student lending legislation went through are 7.9%

Now grad plus are 6.41%


Man I really got assfucked by the Bush admin

They now vary each year so grads five or ten years from now will be talking about the assfucking obama delivered them. i just need em to stay low one more year.


So a grad plus you take out your 1L could be at a different interest rate than your 2 or 3L?

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Thu May 22, 2014 1:41 pm

Anonymous User wrote:So a grad plus you take out your 1L could be at a different interest rate than your 2 or 3L?

Yep.

1L/2L loans:

Grad Plus - 7.9%
Direct Subsidized and Unsibsidized - 6.8%

3L loans:

Grad Plus - 6.4%
Direct Unsibsidized - 5.4%

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Thu May 22, 2014 1:59 pm

JenDarby wrote:
Anonymous User wrote:So a grad plus you take out your 1L could be at a different interest rate than your 2 or 3L?

Yep.

1L/2L loans:

Grad Plus - 7.9%
Direct Subsidized and Unsibsidized - 6.8%

3L loans:

Grad Plus - 6.4%
Direct Unsibsidized - 5.4%


So how is the interest rate determined?

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hous
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Re: Student loan payments: Actual numbers

Postby hous » Thu May 22, 2014 3:12 pm

Debt - 50k - Instate tuition at sticker over 3 years. I had about 8k saved up pre-law school that I used up and I worked throughout law school.
Income - Will be 65-70k
Payments - Will be making around 3k a month. Luckily my house and car are paid for and I dont plan on replacing either anytime soon.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Thu May 22, 2014 3:49 pm

Anonymous User wrote:So how is the interest rate determined?

It's tied to the 10 year treasury.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Thu May 22, 2014 6:42 pm

bk1 wrote:
Anonymous User wrote:So how is the interest rate determined?

It's tied to the 10 year treasury.


Okay, just read about it. Scary. Thanks for the info!




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