Student loan payments: get advice and actual numbers here

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Anonymous User
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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Sun Dec 23, 2018 11:18 pm

Wild Card wrote:Debt: $210,000 (T6, after a $50,000 scholarship)
Payments: $2,300 per month
Income: $190,000 (NYC biglaw)
Plan: 10-year
Important info: My parents cannot help me pay any of my loans because they're in a very bad state right now. I have no savings. I'd like to clerk as soon as I can and make my way to bigfed further down the line. How aggressively should I be paying off my loans? I'm in M&A, so I don't think they'll lay me off in less than 2 years, but I'm still living in constant fear of getting shitcanned before I can make good progress on my payments. I was thinking of paying $4,000, $5,000, or even $6,000 per month. The prospect of oweing $280,000 if I stay on the 10-year plan makes me sick. I'd deeply appreciate advice.


Given that you have no parent safety net, and may even have to financially help them at some point in the near future (?), I'd make sure to build some savings as well for yourself. Let's assume you stick around biglaw for two years and then clerk and then do bigfed. I'd much rather be in that position with $104k in debt and $24k saved (assuming ~$4k monthly payments and $1k monthly savings) than ~$80k in debt with no savings (assuming ~$5k monthly payments to debt). The marginal value of ~$20k-30k of savings for your life is almost certainly higher than the marginal value of paying off that amount of debt.

Maybe you know that already. I also think you know this as well: put as much as possible toward these goals. If you can psychologically stomach devoting $6k/m to debt/savings, you'll be significantly better off even after a short stint in biglaw than if you devote $5k/m ... etc. That said, it's NYC and living cheap isn't easy, so that's a personal decision for you. Building a life and career that's sustainable (and the two are related) is also something that has value. You could probably find a $500/m hole in the wall a 3-hour commute away and save an enormous amount of money. But if it results in you being abjectly miserable--and it might!--you're probably likely to either get fired or leave on your own volition more quickly, or even to drop out of the law entirely. Saving $10k or $20k at this stage of the life, if it jeopardizes your 30-40-year career, might not be worth it. But do try to leave as cheaply as you feel comfortable.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Dec 24, 2018 11:55 am

Debt: 96k (a few years out of T2)
Income: about the same as debt with bonus
Payment: $930/month, 10-11 years to go

Big fan of Earnest - refinanced for the second time this past summer

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Dec 24, 2018 10:49 pm

Wild Card wrote:Debt: $210,000 (T6, after a $50,000 scholarship)
Payments: $2,300 per month
Income: $190,000 (NYC biglaw)
Plan: 10-year
Important info: My parents cannot help me pay any of my loans because they're in a very bad state right now. I have no savings. I'd like to clerk as soon as I can and make my way to bigfed further down the line. How aggressively should I be paying off my loans? I'm in M&A, so I don't think they'll lay me off in less than 2 years, but I'm still living in constant fear of getting shitcanned before I can make good progress on my payments. I was thinking of paying $4,000, $5,000, or even $6,000 per month. The prospect of oweing $280,000 if I stay on the 10-year plan makes me sick. I'd deeply appreciate advice.


I'm in my stub year, but if I were you I'd be doing 3500 a month to loans for now, and focus on saving aggressively until you get 50-75k in a stock portfolio or something similar. It may be lower than what you wrote (you indicated 4-6k per month to loans) but 3500 a month comes out to 42k a year in loans you are knocking out, which is huge.

$3500 will also allow you to have cash around in the event your parents need help.

Just my thoughts.

Stevoman

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Re: Student loan payments: Actual numbers

Postby Stevoman » Thu Dec 27, 2018 1:56 pm

Stevoman wrote:Some of these numbers in here are both scary and leave me bewildered. How is it that many of you are bringing in biglaw pay and have barely made a dent in your loans? Isn't the whole point of biglaw to kill yourself short-term so you can make serious progress on the loans?

I'm graduating in May and have a biglaw job lined up. I've crafted a budget and, based on my loan amortization table, will have my loans ($80k) paid off by May 2017. Am I missing something and being completely unrealistic here?

Anyways, my question here: I have a mix of private (6.8%) and Federal (mostly 5.4%, one 7.9%) loans. I am thinking of refinancing the private loans with Sofi and killing those first, then dumping everything into the Federal loans. My thought is that, while one of the Federal loans is a higher interest rate, I want to keep as many Federal as I can for the repayment options, if needed. Do you think the cost of the interest is worth that, or should I just refinance them all if I think I can pay them off in <2 years?


Checking in 3.5 years after I posted this.

Finally paid off my student loans. Took me about 1.5 years longer than I thought it would, as some of you predicted. In that time frame: I got married, we bought a house, we took a break from my loans to pay down some high-interest loans of hers', and we dealt with some medical issues. I ended up skipping the refinance since I was on such an aggressive repayment timetable.

A few take-aways from this: (1) Buckling down and using your big salary to aggressively pay off your loans is possible. (2) Lifestyle creep is very common on this board/in this profession. The biglaw lawyers here moaning about not making a dent in their loans really are just spending too much. (3) But, as usual, the truth is somewhere in the middle of the two extremes. Life happens, and your plan gets disrupted, but you have to stick with it as best you can, and you have to be thankful for what you have. Could I have buckled down even more and paid off my loans in less than 3.5 years? Probably. Am I thankful I was able to pay off my loans in 3.5 years? Absolutely.

nevans2366

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Re: Student loan payments: get advice and actual numbers here

Postby nevans2366 » Thu Jan 03, 2019 6:56 pm

Anonymous User wrote:2018 Grad
Federal Student Loans: 220K
Salary: 75K
Probably consolidating and going on IBR or another program . . . not sure what else to do. No other debt.

-----------------------------------------------------
Hi! Did you go into a public interest job?

Lurker123

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Re: Student loan payments: Actual numbers

Postby Lurker123 » Thu Jan 03, 2019 10:04 pm

Stevoman wrote:
Stevoman wrote:Some of these numbers in here are both scary and leave me bewildered. How is it that many of you are bringing in biglaw pay and have barely made a dent in your loans? Isn't the whole point of biglaw to kill yourself short-term so you can make serious progress on the loans?

I'm graduating in May and have a biglaw job lined up. I've crafted a budget and, based on my loan amortization table, will have my loans ($80k) paid off by May 2017. Am I missing something and being completely unrealistic here?

Anyways, my question here: I have a mix of private (6.8%) and Federal (mostly 5.4%, one 7.9%) loans. I am thinking of refinancing the private loans with Sofi and killing those first, then dumping everything into the Federal loans. My thought is that, while one of the Federal loans is a higher interest rate, I want to keep as many Federal as I can for the repayment options, if needed. Do you think the cost of the interest is worth that, or should I just refinance them all if I think I can pay them off in <2 years?


Checking in 3.5 years after I posted this.

Finally paid off my student loans. Took me about 1.5 years longer than I thought it would, as some of you predicted. In that time frame: I got married, we bought a house, we took a break from my loans to pay down some high-interest loans of hers', and we dealt with some medical issues. I ended up skipping the refinance since I was on such an aggressive repayment timetable.

A few take-aways from this: (1) Buckling down and using your big salary to aggressively pay off your loans is possible. (2) Lifestyle creep is very common on this board/in this profession. The biglaw lawyers here moaning about not making a dent in their loans really are just spending too much. (3) But, as usual, the truth is somewhere in the middle of the two extremes. Life happens, and your plan gets disrupted, but you have to stick with it as best you can, and you have to be thankful for what you have. Could I have buckled down even more and paid off my loans in less than 3.5 years? Probably. Am I thankful I was able to pay off my loans in 3.5 years? Absolutely.


Congrats. This type of post is inspiring to see.

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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Jan 07, 2019 12:59 am

After a lot of number crunching my fiancé, scheduled to be married in two months, decided to still have the ceremony, but forego legal marriage because of the REPAYE marriage penalty. I have loans ineligible for PAYE, so if we get married it’s either our joint income on REPAYE, or my married filing separately on IBR.

We’re both really bummed about the situation, but neither of us are willing to pay an additional $3,000/yr extra on my loans. We’ll be putting off getting legally married until PSLF wipes me clean.

Anonymous User
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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Jan 07, 2019 4:24 am

Anonymous User wrote:After a lot of number crunching my fiancé, scheduled to be married in two months, decided to still have the ceremony, but forego legal marriage because of the REPAYE marriage penalty. I have loans ineligible for PAYE, so if we get married it’s either our joint income on REPAYE, or my married filing separately on IBR.

We’re both really bummed about the situation, but neither of us are willing to pay an additional $3,000/yr extra on my loans. We’ll be putting off getting legally married until PSLF wipes me clean.


Is that $3,000/year net of the (likely) tax advantages of filing married filing jointly?

beepz

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Re: Student loan payments: get advice and actual numbers here

Postby beepz » Wed Jan 09, 2019 9:35 pm

Sorry if this is a totally stupid question.

I'm planning on refinancing. Are you required to make the minimum payment if you've paid well above it for some time? Say I put 4.5k a month towards loans and the minimum is 2.5k. I lose my big law job a year later and for whatever reason don't have the money for my next payment. Does the amount previously paid above the minimum mean I could pay nothing the month after I lose the job, or is the requirement essentially reset each month?

I also read an article that said that Common Bond is now allowing 3Ls to refinance in the spring once all loans have been disbursed. No payments required until 6 months after graduation. I'll be at ~140k at YHS. No family help in general but could probably borrow up to 10k in an emergency. If I'm confident in my job security for the next year, is there any compelling reason not to refinance now instead of waiting?

Anonymous User
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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Thu Jan 10, 2019 10:49 pm

Anonymous User wrote:
Anonymous User wrote:After a lot of number crunching my fiancé, scheduled to be married in two months, decided to still have the ceremony, but forego legal marriage because of the REPAYE marriage penalty. I have loans ineligible for PAYE, so if we get married it’s either our joint income on REPAYE, or my married filing separately on IBR.

We’re both really bummed about the situation, but neither of us are willing to pay an additional $3,000/yr extra on my loans. We’ll be putting off getting legally married until PSLF wipes me clean.


Is that $3,000/year net of the (likely) tax advantages of filing married filing jointly?


It’s $3000/yr if we file separately. If we file jointly, the PAYE would be based off $200k joint income, vs my solo $120k income. We’d pay even more. I’ve got $230k in debt. Fiancé has none.

Anonymous User
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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Fri Jan 11, 2019 12:01 am

beepz wrote:Sorry if this is a totally stupid question.

I'm planning on refinancing. Are you required to make the minimum payment if you've paid well above it for some time? Say I put 4.5k a month towards loans and the minimum is 2.5k. I lose my big law job a year later and for whatever reason don't have the money for my next payment. Does the amount previously paid above the minimum mean I could pay nothing the month after I lose the job, or is the requirement essentially reset each month?

I also read an article that said that Common Bond is now allowing 3Ls to refinance in the spring once all loans have been disbursed. No payments required until 6 months after graduation. I'll be at ~140k at YHS. No family help in general but could probably borrow up to 10k in an emergency. If I'm confident in my job security for the next year, is there any compelling reason not to refinance now instead of waiting?


If you think you'll stay in a firm and not go to government, refinancing is a good idea, though you lose certain protections.

If you pay more than your required monthly payment, you do not get a cushion for later defaults. You are required to make the monthly payment no matter what. If you pay more than that, great, but it's not going to affect next month's payment. At least that's how mine are.

QContinuum

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Re: Student loan payments: get advice and actual numbers here

Postby QContinuum » Fri Jan 11, 2019 1:24 pm

Anonymous User wrote:After a lot of number crunching my fiancé, scheduled to be married in two months, decided to still have the ceremony, but forego legal marriage because of the REPAYE marriage penalty. I have loans ineligible for PAYE, so if we get married it’s either our joint income on REPAYE, or my married filing separately on IBR.

We’re both really bummed about the situation, but neither of us are willing to pay an additional $3,000/yr extra on my loans. We’ll be putting off getting legally married until PSLF wipes me clean.

I agree that postponing legally getting married makes financial sense. But do get legal docs drawn up by a family law practitioner - otherwise, cohabitants (which is all you'll be in the eyes of state law) have basically zero legal rights vis-à-vis each other. I'm pretty sure that's not the situation you want to be in, especially after the ceremony when you (and all of your family/friends) will effectively consider yourself married. (And of course, don't forget to keep those docs updated, especially when you go through major life changes like buying a house or having kids.)

Anonymous User
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Re: Student loan payments: get advice and actual numbers here

Postby Anonymous User » Mon Jan 14, 2019 6:02 pm

Class of 2017, working in a 100 attorney firm in New Jersey (I did a state clerkship for the past year, started law firm after clerkship)
Went to Villanova
Debt: 37k (started at 45k).
Income: 85k
Interest Rate: 3.94% over 5 years. I refinanced 4 months ago for aggressive repayment, so my min payment is $850/month but will be increasing to $1500.
Rent is $1000/month. Everything is very doable with a second, high-income earner (highly recommended).



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