XxSpyKEx wrote:But you are assuming a 25 year repayment, where I was assuming a 10 year repayment. 25 years is just outright ridiculous for a student loan repayment (especially if you are talking about non-IBR). I mean, seriously, would you be OK still repaying your student loans when you are into your 50s and hoping to retire soon? Not to mention how much more you will pay overall due to the interest accrual on that loan for 25 years (assuming you aren't doing IBR). And then, trying to get another $200K loan to buy an average size house in the suburbs would be completely unrealistic...
He's in no worse situation than someone starting off making in the $50s with no loans. And eventually most of these people are able to buy houses, etc. Here's what I would do. Take the repayment plan with the lowest monthly option. Live as frugally as possible. Put extra money, raises, and bonuses into paying down the principal. In 5 years, assuming 5% raises, he'll be making about 90k. With some of the loans paid down and the higher income he will be able to start thinking about getting a mortgage. $90k income with a conservative 36% debt to income comes out to $2700/mo. Subtract a min $700 student loan payment and maybe $200 for a car, he will still be able to throw around $1800/mo for a mortgage which should get him above $200k.
XxSpyKEx wrote:The commute is brutal, and even more so if you are talking about working a shitton of hours like attorneys typically do. At 3AM I live about 35 minutes from the loop. Taking the train during the day that's about a 1.5-2 hours commute (driving it can be even longer). Adding 3-4 hours a day in addition to a 50+ hour work week would be pretty awful for a job where you are only bringing home $25K post-taxes and post repaying your student loans (see my next point)
He said the job has pretty reasonable hours. I know a guy who lives in Elburn and works downtown and his total commute is 1.5 hours door to door. And OP doesn't necessarily have to go that far out. It still sucks but is better than running up a bunch of credit card debt to support having a "nicer" place in the city.
With the IBR at $700/mo he'll have a little over $40k post tax and post loans not $25k.
XxSpyKEx wrote:How are you coming up with this? Are you assuming the 25 year repayment? If so, then that's why your numbers are a lot better then mine.
Yes, this assumes 25yr repayment, either IBR or standard. Just from an accounting standpoint, since he's getting the benefit of the law degree over the course of a 30+ year career it's perfectly reasonable to amortize the cost that way as well. And realistically, this is how someone in his position is going to probably pay it off.
We agree $70k doesn't go that far, but we differ on whether he's screwed for life or not. I hope some of the people considering law school who are thinking "I'd be thrilled to be making $70k" are reading this and understand what they are getting into and what their quality of life is going to be like on that "above average" income.
The scary thing here is compared to a lot (most?) law grads this guy is actually in much better shape. He has an offer, for a job as a lawyer, with some sort of career/advancement potential (and presumably some benefits), and will be graduating in the top half of a top 25 school with a high but not uncommon amount of debt.