Student loan payments: get advice and actual numbers here

[gk101]

Debt: 145k
Income: $160k + 15k bonus
Refinanced entirely to SoFi, fixed rate of 3.99%
5 year repayment plan
Monthly payments: $2900/month

This makes no sense. You are not saving much on interest by refinancing and I would guess that you aren't putting much away in your savings with 3k/month loan payment

[Anonymous User]

Does anyone ever feel embarrassed about huge student loans? I'm somewhat seriously dating someone who is very financially savvy and got through grad school with minimal to no loans on her/his own (makes a small income through investments, worked through school and had scholarships, even manages to own property). In contrast, I have ~$125k in student loans and don't live very super frugally (although not lavishly either) in school. I do have excellent credit, didn't get any help from anyone with school, and am NYC-big law bound... but I feel kinda financially dumb. How have others dealt with sharing their loan situations with significant others?

[Old Gregg]

Does anyone ever feel embarrassed about huge student loans? I'm somewhat seriously dating someone who is very financially savvy and got through grad school with minimal to no loans on her/his own (makes a small income through investments, worked through school and had scholarships, even manages to own property). In contrast, I have ~$125k in student loans and don't live very super frugally (although not lavishly either) in school. I do have excellent credit, didn't get any help from anyone with school, and am NYC-big law bound... but I feel kinda financially dumb. How have others dealt with sharing their loan situations with significant others?

grow a pair

[JenDarby]

Debt: 145k
Income: $160k + 15k bonus
Refinanced entirely to SoFi, fixed rate of 3.99%
5 year repayment plan
Monthly payments: $2900/month

This makes no sense. You are not saving much on interest by refinancing and I would guess that you aren't putting much away in your savings with 3k/month loan payment

3.99% is probably around a 50% decrease in average interest rate (80k plus of that debt could easily have been at 7.9%), which is more than nothing. Also with biglaw and assuming no huge family expenses then this person could certainly be saving and paying $2,900/month.

[gk101]

Debt: 145k
Income: $160k + 15k bonus
Refinanced entirely to SoFi, fixed rate of 3.99%
5 year repayment plan
Monthly payments: $2900/month

This makes no sense. You are not saving much on interest by refinancing and I would guess that you aren't putting much away in your savings with 3k/month loan payment

3.99% is probably around a 50% decrease in average interest rate (80k plus of that debt could easily have been at 7.9%), which is more than nothing. Also with biglaw and assuming no huge family expenses then this person could certainly be saving and paying $2,900/month.

I haven't done the math in a while but for a 5 year repayment plan, I think he would have come out ahead (or maybe pay a little bit more in interest) going on a 15 year repayment plan with the feds and throwing anything above the minimum payments on the high interest loans. That is, this person would still pay $2900/month but have most of it going to the principal on the 7.9% loans. When I ran the numbers for my loans, it didn't make sense to give up the options that come with a federal loan for relatively small savings on a 5 year repayment plan.

I guess what stuck out to me about his plan was that it was not the risk averse option (no refinancing because what if he loses his job) and it wasn't really taking advantage of the low interest rates. Also, if the person was committed to 5 year repayment, I'd have thought the variable rate would be a better option.

I don't think the person necessarily made a bad choice. I am just curious about their reasoning

[JenDarby]

^ ah, that makes sense. I read your initial post as more critical. I agree that in anon's circumstances I probably would have made different decisions (i.e. variable) as well.

[15 styx]

Thoughts on paying off $80K. A. Present plan is paying $11K a year for 10 years; B. Paying $19K a year for 5 years. B is doable without much strain but having an extra $8K a year is obviously helpful.

Thinking on plan A, when bonuses kick in I could take the bonus $ to cut 10 years by a couple/few years.

[gk101]

Thoughts on paying off $80K. A. Present plan is paying $11K a year for 10 years; B. Paying $19K a year for 5 years. B is doable without much strain but having an extra $8K a year is obviously helpful.

Thinking on plan A, when bonuses kick in I could take the bonus $ to cut 10 years by a couple/few years.

depends on the interest rates dude

[ExBiglawAssociate]

kind of ironic that some of the people in this thread may have put more thought into how to best pay off their ginormous student loan balances than they did to decide to attend law school in the first place

[Old Gregg]

kind of ironic that some of the people in this thread may have put more thought into how to best pay off their ginormous student loan balances than they did to decide to attend law school in the first place

makes sense. people don't appreciate the impact of these financial commitments until they actually have to act on them. easy to sign a promissory note before 1L, but hard to see most of your paycheck in NYC go to rent, loans and taxes.

[15 styx]

Thoughts on paying off $80K. A. Present plan is paying $11K a year for 10 years; B. Paying $19K a year for 5 years. B is doable without much strain but having an extra $8K a year is obviously helpful.

Thinking on plan A, when bonuses kick in I could take the bonus $ to cut 10 years by a couple/few years.

depends on the interest rates dude

6.7%

BTW: I work with associates (at the same pay) whose debts are substantially higher because they opted for a higher ranked LS. For those looking at law schools, if there is a take-away from this, leverage your stats.

[fats provolone]

kind of ironic that some of the people in this thread may have put more thought into how to best pay off their ginormous student loan balances than they did to decide to attend law school in the first place

nah I'm taking the same "fuck it, I'll figure it out later" approach to both

[anonnymouse]

Thoughts on paying off $80K. A. Present plan is paying $11K a year for 10 years; B. Paying $19K a year for 5 years. B is doable without much strain but having an extra $8K a year is obviously helpful.

Thinking on plan A, when bonuses kick in I could take the bonus $ to cut 10 years by a couple/few years.

depends on the interest rates dude

6.7%

BTW: I work with associates (at the same pay) whose debts are substantially higher because they opted for a higher ranked LS. For those looking at law schools, if there is a take-away from this, leverage your stats.

Why is the 10-year interest rate (6.71%) lower than the 5-year interest rate (6.97%)?

[Anonymous User]

Currently clerking, so making ~$65k. Will be doing big law next year. I have pretty good credit... $175k in loans all at over 6%. Does it make sense to refinance now, or will I get a much better refinance rate if I wait until I start big law? Am I wrong in assuming salary is a factor considered by SoFi and the like when setting our interest rate? TIA.

Salary may impact your ability to refinance in the sense that you might need a cosigner to refinance at all.

I'm the clerk above with the 2.74% variable after refinancing with DRB. I didn't have any trouble getting that rate just based on a big law offer, despite not actually working there.

[Old Gregg]

Seems like DRB is more amenable to giving lower interest rates than SoFi is. Has that been people's general experiences ITT? Just curious.

[bk1]

Seems like DRB is more amenable to giving lower interest rates than SoFi is. Has that been people's general experiences ITT? Just curious.

Handful of Yelp reviews seem to indicate better rates than SoFi but a worse process. I'm also curious what people who've dealt with DRB ITT have experienced.

[JenDarby]

Seems like DRB is more amenable to giving lower interest rates than SoFi is. Has that been people's general experiences ITT? Just curious.

I will share my experience once I get my rate quote back from DRB. I also do like that DRB explicitly offers you to add a cosigner. I submitted my application without one (to mirror Sofi) but if my rate doesn't come back more favorable then I might add my SO as a co-signer to see if that changes things.

So far my process seems way quicker with DRB, but we will see.

[Old Gregg]

You can add SO's income to yours for purposes of a better interest rate, but you don't have to make him a co-signer. Just send in his W2s.

[Anonymous User]

I don't think the person necessarily made a bad choice. I am just curious about their reasoning

I hate having six figure debt and want to pay it off asap. Half my loans were 7.8%, the other half 6.8%, and so this refinance is saving me about $400/month in interest.

I don't have a ton of other expenses right now, and even with $3k/month towards debt I have $5k+ for living and other saving. I feel secure in my job, and I'm not planning to leave biglaw until my debt is gone or manageable

Went with fixed instead of variable since 3.99% is pretty damn low, and I was willing to forgo a slightly greater drop to protect against a future LIBOR rise. My choices aren't for everyone, and refinancing definitely involves risks, but this made sense for me.

[existenz]

Seems like DRB is more amenable to giving lower interest rates than SoFi is. Has that been people's general experiences ITT? Just curious.

Handful of Yelp reviews seem to indicate better rates than SoFi but a worse process. I'm also curious what people who've dealt with DRB ITT have experienced.

DRB initially offered me a better rate, but I got SoFi to match and beat it. DRB's customer service seemed much worse so I was glad to avoid.

[Old Gregg]

Seems like DRB is more amenable to giving lower interest rates than SoFi is. Has that been people's general experiences ITT? Just curious.

Handful of Yelp reviews seem to indicate better rates than SoFi but a worse process. I'm also curious what people who've dealt with DRB ITT have experienced.

DRB initially offered me a better rate, but I got SoFi to match and beat it. DRB's customer service seemed much worse so I was glad to avoid.

SoFi actually does that? Didn't know.

[Johann]

Debt: 145k
Income: $160k + 15k bonus
Refinanced entirely to SoFi, fixed rate of 3.99%
5 year repayment plan
Monthly payments: $2900/month

This makes no sense. You are not saving much on interest by refinancing and I would guess that you aren't putting much away in your savings with 3k/month loan payment

Yeah this was dumb. Shoulda 10 yeared this for sure or done what gk said.

[Johann]

Thoughts on paying off $80K. A. Present plan is paying $11K a year for 10 years; B. Paying $19K a year for 5 years. B is doable without much strain but having an extra $8K a year is obviously helpful.

Thinking on plan A, when bonuses kick in I could take the bonus $ to cut 10 years by a couple/few years.

depends on the interest rates dude

Plan A.

[Anonymous User]

Debt: 65k ($25k undergrad, $40k law school)
Income: 60k
Payments: 2k a month
Plan: live frugally and pay 2k a month until all 6.8 percent loans are paid off, which should be summer 2015. After that, I'm not sure
Notes: graduated from T1 strong regional May 2014 and live in low COL area. I work at a small law firm 9-5. I have never left the office later than 5:30, have never taken work home, and have never gone to the office on a weekend. So far, I'm glad that I went to law school, although I worry about where I will be in 5 years

[Anonymous User]

Loans: ~$150K of principal left (spouse has about $80K)
Interest: 5.5-5.75% (mostly refi'd through DRB) (spouse's interest rate is around 3.75% because we went with variable for most of those loans)
Monthly payment: ~$1500 (plus $650 per month for spouse's payment)
Term: 15 years
Savings: ~$30K
Retirement: ~$20K (continuing to max my firm's match)
Mortgage: ~$3K monthly payment
Salary: ~$180K (but may take a haircut if I go in-house) plus spouse's ~$60K

Honestly, I've hit a bit of a crossroads as to what to do with extra cash. I've recently switched to saving aggressively rather than throwing the extra at student loans, in part because I have a mortgage so it would be nice to have an extra cushion. At the same time, I am confident in my job security right now and it feels dumb to leave a bunch of cash sitting there making 1%. On the other hand, I own a condo and am contemplating trying to sock away extra cash for a downpayment on a house so I could possibly hang onto the condo and rent it out when we move in a few years. I'm considering talking to a financial advisor at this point to get a second opinion, but I'm skeptical of the value add.

Anyone have thoughts on value add of a financial advisor?