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 Apr 28, 2019 10:52 am

Real talk- anyone know any banks/ credit unions that still have low interest rates. I’m trying to refinance but everything is 5%, even for 5 year terms. My credit score is over 800 so that’s not the issue. The only place I got even a half reasonable number is First National, but I don’t live in one of their markets (live in DC) so they wouldn’t help.

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

Postby Anonymous User » Tue Apr 30, 2019 7:58 am

Second/third year associate
Salary: $170k base (no state income tax)
Student loan debt: $290k
Other debt: $5k credit card debt/$150k mortgage
Savings: $20k in roth 401k, 25k In emergency fund

I spend most of my first year paying down my mortgage because I assume that, even with the tax bomb, paying 30% or whatever that number is will be less than the amount of my investments and earnings. Obviously a huge risk, but one I’m willing to take. Additionally, I want to pay off my mortgage first so that, worst case scenario, I can sell this POS place if I need to pay off that debt later on.

Since I don’t have state income tax, I’ve been doing Roth 401k.

Anyone have any suggestions for where/what else to invest in? Someone mentioned wealthfront. How is that?

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Guchster

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

Postby Guchster » Tue Apr 30, 2019 5:03 pm

Anonymous User wrote:Real talk- anyone know any banks/ credit unions that still have low interest rates. I’m trying to refinance but everything is 5%, even for 5 year terms. My credit score is over 800 so that’s not the issue. The only place I got even a half reasonable number is First National, but I don’t live in one of their markets (live in DC) so they wouldn’t help.


I assume you've looked into Sofi, Laurel Road, Earnest, etc.?

sparty99

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

Postby sparty99 » Tue Apr 30, 2019 9:37 pm

Anonymous User wrote:Second/third year associate
Salary: $170k base (no state income tax)
Student loan debt: $290k
Other debt: $5k credit card debt/$150k mortgage
Savings: $20k in roth 401k, 25k In emergency fund

I spend most of my first year paying down my mortgage because I assume that, even with the tax bomb, paying 30% or whatever that number is will be less than the amount of my investments and earnings. Obviously a huge risk, but one I’m willing to take. Additionally, I want to pay off my mortgage first so that, worst case scenario, I can sell this POS place if I need to pay off that debt later on.

Since I don’t have state income tax, I’ve been doing Roth 401k.

Anyone have any suggestions for where/what else to invest in? Someone mentioned wealthfront. How is that?


You need to pay off your credit card debt today with $5,000 from the emergency fund. Next, forget about your mortgage. That is the worst idea. You can't discharge student loan debt. You have almost $300,000 in student loan debt. You need to start paying that off. It will take you over 3 years at this point.

Anonymous User
Posts: 334392
Joined: Tue Aug 11, 2009 9:32 am

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

Postby Anonymous User » Tue Apr 30, 2019 10:25 pm

sparty99 wrote:
Anonymous User wrote:Second/third year associate
Salary: $170k base (no state income tax)
Student loan debt: $290k
Other debt: $5k credit card debt/$150k mortgage
Savings: $20k in roth 401k, 25k In emergency fund

I spend most of my first year paying down my mortgage because I assume that, even with the tax bomb, paying 30% or whatever that number is will be less than the amount of my investments and earnings. Obviously a huge risk, but one I’m willing to take. Additionally, I want to pay off my mortgage first so that, worst case scenario, I can sell this POS place if I need to pay off that debt later on.

Since I don’t have state income tax, I’ve been doing Roth 401k.

Anyone have any suggestions for where/what else to invest in? Someone mentioned wealthfront. How is that?


You need to pay off your credit card debt today with $5,000 from the emergency fund. Next, forget about your mortgage. That is the worst idea. You can't discharge student loan debt. You have almost $300,000 in student loan debt. You need to start paying that off. It will take you over 3 years at this point.


My credit card is at 0% interest for 15 more months.

I never said anything about discharging my student loan debt. I’m on PAYE and I’m never going to be at a salary where I will not get forgiveness. I don’t plan on being at a large firm forever. Also, I’ve calculated my estimated my forgiveness and whatever equity I have in my condo by the time it’s due should cover the taxes on it.

nixy

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

Postby nixy » Tue Apr 30, 2019 10:39 pm

Sparty is a disciple of "all debt is EEEEEEEEEVIL." If you're interested in building up assets/liquidity at the same time you're handling your debt, you can ignore his advice.

sparty99

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Posts: 1622
Joined: Sat Dec 11, 2010 8:41 pm

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

Postby sparty99 » Tue Apr 30, 2019 11:11 pm

Anonymous User wrote:
sparty99 wrote:
Anonymous User wrote:Second/third year associate
Salary: $170k base (no state income tax)
Student loan debt: $290k
Other debt: $5k credit card debt/$150k mortgage
Savings: $20k in roth 401k, 25k In emergency fund

I spend most of my first year paying down my mortgage because I assume that, even with the tax bomb, paying 30% or whatever that number is will be less than the amount of my investments and earnings. Obviously a huge risk, but one I’m willing to take. Additionally, I want to pay off my mortgage first so that, worst case scenario, I can sell this POS place if I need to pay off that debt later on.

Since I don’t have state income tax, I’ve been doing Roth 401k.

Anyone have any suggestions for where/what else to invest in? Someone mentioned wealthfront. How is that?


You need to pay off your credit card debt today with $5,000 from the emergency fund. Next, forget about your mortgage. That is the worst idea. You can't discharge student loan debt. You have almost $300,000 in student loan debt. You need to start paying that off. It will take you over 3 years at this point.


My credit card is at 0% interest for 15 more months.

I never said anything about discharging my student loan debt. I’m on PAYE and I’m never going to be at a salary where I will not get forgiveness. I don’t plan on being at a large firm forever. Also, I’ve calculated my estimated my forgiveness and whatever equity I have in my condo by the time it’s due should cover the taxes on it.


So you are trying to be in student loan debt for 25 years when you can simply pay it off in 3 years? Don't pay off your mortgage over your student loan debt. You can get rid of a mortgage in bankruptcy, but you can't with student loan debt. You can easily pay it off. And who cares if it is 0 percent interest? You have the money to pay it off. Just pay it off.

Anonymous User
Posts: 334392
Joined: Tue Aug 11, 2009 9:32 am

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

Postby Anonymous User » Tue Apr 30, 2019 11:34 pm

sparty99 wrote:
Anonymous User wrote:
sparty99 wrote:
Anonymous User wrote:Second/third year associate
Salary: $170k base (no state income tax)
Student loan debt: $290k
Other debt: $5k credit card debt/$150k mortgage
Savings: $20k in roth 401k, 25k In emergency fund

I spend most of my first year paying down my mortgage because I assume that, even with the tax bomb, paying 30% or whatever that number is will be less than the amount of my investments and earnings. Obviously a huge risk, but one I’m willing to take. Additionally, I want to pay off my mortgage first so that, worst case scenario, I can sell this POS place if I need to pay off that debt later on.

Since I don’t have state income tax, I’ve been doing Roth 401k.

Anyone have any suggestions for where/what else to invest in? Someone mentioned wealthfront. How is that?


You need to pay off your credit card debt today with $5,000 from the emergency fund. Next, forget about your mortgage. That is the worst idea. You can't discharge student loan debt. You have almost $300,000 in student loan debt. You need to start paying that off. It will take you over 3 years at this point.


My credit card is at 0% interest for 15 more months.

I never said anything about discharging my student loan debt. I’m on PAYE and I’m never going to be at a salary where I will not get forgiveness. I don’t plan on being at a large firm forever. Also, I’ve calculated my estimated my forgiveness and whatever equity I have in my condo by the time it’s due should cover the taxes on it.


So you are trying to be in student loan debt for 25 years when you can simply pay it off in 3 years? Don't pay off your mortgage over your student loan debt. You can get rid of a mortgage in bankruptcy, but you can't with student loan debt. You can easily pay it off. And who cares if it is 0 percent interest? You have the money to pay it off. Just pay it off.


PAYE is 20 years, of which I have 18 remaining. I don’t live in some swanky condo, either. I’m almost done paying for my condo already.

At this point in my life, I would rather invest my money than aggressively pay down my student loans.

As for my credit card, I’ll pay it off when it comes due. I’d rather put that money to work for 15 months.

You and I just have different philosophies when it comes to money/finances.

You are extremely risk averse whereas I’m clearly more liberal with my spending habits

sparty99

Gold
Posts: 1622
Joined: Sat Dec 11, 2010 8:41 pm

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

Postby sparty99 » Tue Apr 30, 2019 11:45 pm

Anonymous User wrote:
sparty99 wrote:
Anonymous User wrote:
sparty99 wrote:
Anonymous User wrote:Second/third year associate
Salary: $170k base (no state income tax)
Student loan debt: $290k
Other debt: $5k credit card debt/$150k mortgage
Savings: $20k in roth 401k, 25k In emergency fund

I spend most of my first year paying down my mortgage because I assume that, even with the tax bomb, paying 30% or whatever that number is will be less than the amount of my investments and earnings. Obviously a huge risk, but one I’m willing to take. Additionally, I want to pay off my mortgage first so that, worst case scenario, I can sell this POS place if I need to pay off that debt later on.

Since I don’t have state income tax, I’ve been doing Roth 401k.

Anyone have any suggestions for where/what else to invest in? Someone mentioned wealthfront. How is that?


You need to pay off your credit card debt today with $5,000 from the emergency fund. Next, forget about your mortgage. That is the worst idea. You can't discharge student loan debt. You have almost $300,000 in student loan debt. You need to start paying that off. It will take you over 3 years at this point.


My credit card is at 0% interest for 15 more months.

I never said anything about discharging my student loan debt. I’m on PAYE and I’m never going to be at a salary where I will not get forgiveness. I don’t plan on being at a large firm forever. Also, I’ve calculated my estimated my forgiveness and whatever equity I have in my condo by the time it’s due should cover the taxes on it.


So you are trying to be in student loan debt for 25 years when you can simply pay it off in 3 years? Don't pay off your mortgage over your student loan debt. You can get rid of a mortgage in bankruptcy, but you can't with student loan debt. You can easily pay it off. And who cares if it is 0 percent interest? You have the money to pay it off. Just pay it off.



PAYE is 20 years, of which I have 18 remaining. I don’t live in some swanky condo, either. I’m almost done paying for my condo already.

At this point in my life, I would rather invest my money than aggressively pay down my student loans.

As for my credit card, I’ll pay it off when it comes due. I’d rather put that money to work for 15 months.

You and I just have different philosophies when it comes to money/finances.

You are extremely risk averse whereas I’m clearly more liberal with my spending habits



how much is paye? U wasting 300 a month for the next 18 years and paying a large tax bill?

ur_hero

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Posts: 210
Joined: Sat Nov 19, 2016 6:52 pm

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

Postby ur_hero » Mon May 20, 2019 5:12 pm

sparty99 wrote:
Anonymous User wrote:
sparty99 wrote:
Anonymous User wrote:
sparty99 wrote:
Anonymous User wrote:Second/third year associate
Salary: $170k base (no state income tax)
Student loan debt: $290k
Other debt: $5k credit card debt/$150k mortgage
Savings: $20k in roth 401k, 25k In emergency fund

I spend most of my first year paying down my mortgage because I assume that, even with the tax bomb, paying 30% or whatever that number is will be less than the amount of my investments and earnings. Obviously a huge risk, but one I’m willing to take. Additionally, I want to pay off my mortgage first so that, worst case scenario, I can sell this POS place if I need to pay off that debt later on.

Since I don’t have state income tax, I’ve been doing Roth 401k.

Anyone have any suggestions for where/what else to invest in? Someone mentioned wealthfront. How is that?


You need to pay off your credit card debt today with $5,000 from the emergency fund. Next, forget about your mortgage. That is the worst idea. You can't discharge student loan debt. You have almost $300,000 in student loan debt. You need to start paying that off. It will take you over 3 years at this point.


My credit card is at 0% interest for 15 more months.

I never said anything about discharging my student loan debt. I’m on PAYE and I’m never going to be at a salary where I will not get forgiveness. I don’t plan on being at a large firm forever. Also, I’ve calculated my estimated my forgiveness and whatever equity I have in my condo by the time it’s due should cover the taxes on it.


So you are trying to be in student loan debt for 25 years when you can simply pay it off in 3 years? Don't pay off your mortgage over your student loan debt. You can get rid of a mortgage in bankruptcy, but you can't with student loan debt. You can easily pay it off. And who cares if it is 0 percent interest? You have the money to pay it off. Just pay it off.



PAYE is 20 years, of which I have 18 remaining. I don’t live in some swanky condo, either. I’m almost done paying for my condo already.

At this point in my life, I would rather invest my money than aggressively pay down my student loans.

As for my credit card, I’ll pay it off when it comes due. I’d rather put that money to work for 15 months.

You and I just have different philosophies when it comes to money/finances.

You are extremely risk averse whereas I’m clearly more liberal with my spending habits



how much is paye? U wasting 300 a month for the next 18 years and paying a large tax bill?



Well, the important thing is the big picture rather than characterizing its as "wasting." It's quite feasible OP could beat student loan interest rates by investing and pulling out at the right time down the road, notwithstanding any "tax bomb". It's a big IF that comes down to managing the money properly and not just overspending.

Perhaps other things someone in this situation might consider is whether some degree of reformed student loan forgiveness might pass via legislation in the interim, or perhaps some change in policy addressing said tax bomb. Even bigger "ifs", that are basically a gamble.

Lastly, there's the question of quality of life. Maybe OP is okay with paying a premium on having small loan payments over a long period of time, during which OP can enjoy the money while they're younger.

Maybe it's terrible financial decisions. Maybe it's differences in risk tolerance. Maybe it's different priorities in life.

I really couldn't say.

Anonymous User
Posts: 334392
Joined: Tue Aug 11, 2009 9:32 am

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

Postby Anonymous User » Wed May 22, 2019 7:49 am

Anonymous User wrote:Real talk- anyone know any banks/ credit unions that still have low interest rates. I’m trying to refinance but everything is 5%, even for 5 year terms. My credit score is over 800 so that’s not the issue. The only place I got even a half reasonable number is First National, but I don’t live in one of their markets (live in DC) so they wouldn’t help.


Bid the companies against themselves (I did this and it got my interest rate from 4.9 to 4.1)

jc9812

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Posts: 15
Joined: Sat Feb 09, 2019 3:59 pm

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

Postby jc9812 » Thu May 23, 2019 7:12 pm

I feel dumb asking this, but I just graduated and got a notification that my loans are going out of deferment, please start paying them or apply for anther arrangement.

I called MOHELA and the rep could not have been less helpful. Basically had no idea what was going on with any of my 8 loans and seemed just generally confused and disoriented.

My question is just: each of my loans are subject to the 6-month post-graduation grace period, correct? So they're out of deferment since I graduated but I don't have to begin repayment until November?

All of the loans are either Direct Student Plus, or Direct Unsubsidized Stafford.

Anonymous User
Posts: 334392
Joined: Tue Aug 11, 2009 9:32 am

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

Postby Anonymous User » Sun Jul 07, 2019 10:41 am

Graduation class: 2017
Salary: Cravath scale (so $200k right now)
Debt load at graduation: 180k
Debt load now: 100k (4-6%, refinanced 5 years term)
Savings and Investments: 30k (10k in investment and 20k in term deposit; the latter of which is savings I had even before law school)

I'm paying off pretty aggressively (5-6k/month) and I was able to make a big dent because I threw in all of my clerkship bonus at my loans when I first started off at my firm. During clerkship, I had deferred a large portion of my loans, which were then just accumulating massive interest... a painful memory.

I'm wondering come bonus time, if I should throw it at the loans, or if I should try to be better about my savings and investments. I feel like 30k is kind of very sad, and I'd really like to beef it up; I ate up quite a bit of it during law school and clerkship. I'd definitely like to buy an apartment, instead of wasting money on rent (in NYC), but that goal seems so far away given where I stand and my rate of saving. I'm second year now, and I feel like my time at the firm is limited (maybe give it 2 more years?). I'd really like to be in a good financial footing before the inevitable burn out or kick to the curb comes. FWIW, I'm living with roommates in a very cheap area that requires roughly 30 minutes commute from my firm -- this is why I was able to be so aggressive with my loans.

Anonymous User
Posts: 334392
Joined: Tue Aug 11, 2009 9:32 am

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

Postby Anonymous User » Mon Jul 15, 2019 5:42 pm

Anonymous User wrote:2016 Grad - finished two years of clerking, starting at firm this fall
Current Debt: 114k (most at 5-5.6%, 20k at 5.9%)
Income: Market firm. Starting as a second-year but will bump up in January to third-year. Will receive 70k clerkship bonus after starting. Leaving after 9 months for a year and will take a massive pay cut to about 90k. I plan on returning to the firm after the year is up. (No bonus afterwards.)
Rent: 1800 plus utilities

I managed to pay two smaller loans with the highest interest off while clerking but am now trying to decide how aggressively to pay the rest versus saving for retirement. With the yearlong pay cut in my future, I'm leery about refinancing. Should I max out my 401k (no matching) and IRA (converted to a Roth)? Or focus on aggressively paying off my debt instead?


Made this post in August and am now about to leave the firm in a month or so. Loan debt is down to 4k, and my next payment should erase it. Probably was unwise to throw the bulk of my income at loans, but I despised being in debt and thankfully had a safety net in terms of both relative job security and a partner. Thanks to everyone who contributed to the thread and shared info.



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