Student Loan Debt?

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Chickensoup
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Re: Student Loan Debt?

Postby Chickensoup » Fri Sep 21, 2012 8:01 pm

EvilClinton wrote:
Chickensoup wrote:
Tiago Splitter wrote:
EvilClinton wrote:Either way it isn't 9k in NYC. Clown.

It's about $8500 until later in the year when you stop paying Social Security taxes, at which time it kicks up over 9K. Not including bonuses.


Thank you. That poster just felt the need to be an incessant prick and argue with me over nothing. I don't understand why people do that so much on this forum. Everyone needs to RELAX.

You are the one that called me a clown. Don't call me a clown if you want to be treated with respect. Clown.

Anyway I think this is incorrect. There are multiple threads about this (and obviously it depends on your dependents and other various deductions) but the consensus is that take home in NYC is 96-98k. That number has also been verified by several first year associates and does not include healthcare and 401K deductions (which vary by firm and individual). Tiago's estimation means 6-10k more than any calculation I can find.

I also used this to calculate: http://webinfocentral.com/RESOURCES/PayrollTax.aspx


I called you a clown because you LOL'ed at me for something that you misread. That's just pathetic. Also, if I am off by $500 or $1000, that's really not relevant.

Big picture: You have a shitload of money left over after paying student loans. $6000/month is enough to comfortably budget for rent, food, savings, and extras. That is, unless you want to live in some swanky Manhattan neighborhood. Not me, I plan on living with roommates in Hoboken or White Plains for around $1200/month.

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manofjustice
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Re: Student Loan Debt?

Postby manofjustice » Fri Sep 21, 2012 8:29 pm

Chickensoup wrote:How much is monthly student loan payment if you take out 150K in debt?

At 6.8% over 10 years, you are looking at $1726.20. Is that what most people end up having to pay each month?


Are you going at sticker? If so, your debt will be about twice 150k.

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Chickensoup
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Re: Student Loan Debt?

Postby Chickensoup » Sat Sep 22, 2012 9:19 am

manofjustice wrote:
Chickensoup wrote:How much is monthly student loan payment if you take out 150K in debt?

At 6.8% over 10 years, you are looking at $1726.20. Is that what most people end up having to pay each month?


Are you going at sticker? If so, your debt will be about twice 150k.


Not going at sticker. Tuition is 50K per year. That is all I'm paying. Exactly how will that add up to more than $1726.20 per month?

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EvilClinton
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Re: Student Loan Debt?

Postby EvilClinton » Sat Sep 22, 2012 11:49 am

Chickensoup wrote:
manofjustice wrote:
Chickensoup wrote:How much is monthly student loan payment if you take out 150K in debt?

At 6.8% over 10 years, you are looking at $1726.20. Is that what most people end up having to pay each month?


Are you going at sticker? If so, your debt will be about twice 150k.


Not going at sticker. Tuition is 50K per year. That is all I'm paying. Exactly how will that add up to more than $1726.20 per month?

Well you can expect at least 10k+ of interest to have built up over the time you are in school. There is no such thing as subsidized loans anymore.

So you will definitely be starting with more than 150k if you are paying 50k per year.

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BruceWayne
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Re: Student Loan Debt?

Postby BruceWayne » Sat Sep 22, 2012 12:31 pm

This thread really highlights why people with high debt should heavily consider going the secondary market route if possible. I know people debating between Houston/Charlotte/Chicago and NYC with high debt and I really can't figure out what the debate is about. Unless you just have some personal reason why you HAVE to be in NYC it's not a smart financial decision to work there with big debt if you don't have to.

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EvilClinton
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Re: Student Loan Debt?

Postby EvilClinton » Sat Sep 22, 2012 12:50 pm

BruceWayne wrote:This thread really highlights why people with high debt should heavily consider going the secondary market route if possible. I know people debating between Houston/Charlotte/Chicago and NYC with high debt and I really can't figure out what the debate is about. Unless you just have some personal reason why you HAVE to be in NYC it's not a smart financial decision to work there with big debt if you don't have to.

Yes, but the difference is that you can always lateral to a smaller market after a few years from NYC. And you will usually have more options than you did when you were a 2L. So in the long run NYC might be a good idea if you don't have exactly what you want in a secondary market job through OCI, you want to experience NYC for a couple years, or if you have no connections to a secondary market and could not land any respectable positions in one through OCI.

Usually a combination of all three of those would make the most sense.

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Chickensoup
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Re: Student Loan Debt?

Postby Chickensoup » Sat Sep 22, 2012 12:58 pm

EvilClinton wrote:
Chickensoup wrote:
manofjustice wrote:
Chickensoup wrote:How much is monthly student loan payment if you take out 150K in debt?

At 6.8% over 10 years, you are looking at $1726.20. Is that what most people end up having to pay each month?


Are you going at sticker? If so, your debt will be about twice 150k.


Not going at sticker. Tuition is 50K per year. That is all I'm paying. Exactly how will that add up to more than $1726.20 per month?

Well you can expect at least 10k+ of interest to have built up over the time you are in school. There is no such thing as subsidized loans anymore.

So you will definitely be starting with more than 150k if you are paying 50k per year.


That is why I calculated the payment with an interest rate of 6.8%. Please read more thoroughly before you post negative responses.

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BruceWayne
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Re: Student Loan Debt?

Postby BruceWayne » Sat Sep 22, 2012 1:01 pm

EvilClinton wrote:
BruceWayne wrote:This thread really highlights why people with high debt should heavily consider going the secondary market route if possible. I know people debating between Houston/Charlotte/Chicago and NYC with high debt and I really can't figure out what the debate is about. Unless you just have some personal reason why you HAVE to be in NYC it's not a smart financial decision to work there with big debt if you don't have to.

Yes, but the difference is that you can always lateral to a smaller market after a few years from NYC. And you will usually have more options than you did when you were a 2L. So in the long run NYC might be a good idea if you don't have exactly what you want in a secondary market job through OCI, you want to experience NYC for a couple years, or if you have no connections to a secondary market and could not land any respectable positions in one through OCI.

Usually a combination of all three of those would make the most sense.


Honestly that's something that TLS came up with through internet hearsay. If you want to be somewhere other than NYC it's better to just start there for a variety of reasons. Firms in non-NYC markets really aren't dying for NYC resumes. It's not like people coming from NYC are better attorneys or anything. And unless you're doing transactional work you really aren't even doing anything especially different from the work in the secondary market (and in the case of Houston and energy or Charlotte and banking even that isn't different).

And again my comment was focused purely on people who have the option of a secondary market. It's pointless to say that people who only have offers in NYC should go there--that's basically a truism.

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EvilClinton
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Re: Student Loan Debt?

Postby EvilClinton » Sat Sep 22, 2012 1:02 pm

Chickensoup wrote:That is why I calculated the payment with an interest rate of 6.8%.

Umm that makes no difference. As a matter of fact your interest rate will be 6.8% on all Stafford Loans and 7.9% on all grad plus loans. So your interest rate between the two should be something like 7.5%.

Also, adding a higher interest does not have the same effect as starting with a higher principal amount.

Paul Campos
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Re: Student Loan Debt?

Postby Paul Campos » Sat Sep 22, 2012 1:05 pm

If you take out $150,000 in law school loans you will have $175,000 in debt six months after graduation. You're going to pay about 7.5% interest on these loans as only the first $20,500 per year is at 6.8% while the rest will be at 7.9%. Also starting this year you'll accrue interest on all of it during law school, while formerly the government paid the interest on the first $24,500.
Last edited by Paul Campos on Sat Sep 22, 2012 1:14 pm, edited 1 time in total.

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EvilClinton
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Re: Student Loan Debt?

Postby EvilClinton » Sat Sep 22, 2012 1:07 pm

BruceWayne wrote:Honestly that's something that TLS came up with through internet hearsay. If you want to be somewhere other than NYC it's better to just start there for a variety of reasons. Firms in non-NYC markets really aren't dying for NYC resumes. It's not like people coming from NYC are better attorneys or anything. And unless you're doing transactional work you really aren't even doing anything especially different from the work in the secondary market (and in the case of Houston and energy or Charlotte and banking even that isn't different).

And again my comment was focused purely on people who have the option of a secondary market. It's pointless to say that people who only have offers in NYC should go there--that's basically a truism.

You may be right in most cases but in the secondary market where I am from they love NYC laterals. Of course they are still looking for ties to that market but I can verify that laterals from NYC get fast tracked.

However, that may not be typical in all secondary markets.

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sunynp
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Re: Student Loan Debt?

Postby sunynp » Sat Sep 22, 2012 2:04 pm

1. I think you are looking at a minimum payment of about $2000 a month for ten years.

2. It seems to be true from my NYC firm that people have transferred to smaller markets. Someone moved to Cincinnati recently and someone else went to Milwaukee. But if you are from a place and want to live there and you have a job at a great firm, you will be out of debt sooner and living in the place you want to spend the rest of your life. You will have two or three years up on making your reputation.

I'm from NYC and plan to live here the rest of my life, but I don't think I would move here for a couple of years with the intention of getting a different job and moving elsewhere.

melbaJ
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Re: Student Loan Debt?

Postby melbaJ » Tue Oct 02, 2012 8:11 pm

.

ajax
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Re: Student Loan Debt?

Postby ajax » Wed Oct 03, 2012 9:28 am

Chickensoup wrote:How much is monthly student loan payment if you take out 150K in debt?

At 6.8% over 10 years, you are looking at $1726.20. Is that what most people end up having to pay each month?


If no one has yet, here you go:

http://www.law.georgetown.edu/admission ... geid=61621

Keep in mind interest will accrue from the time you take out that loan, so it will be higher than 150k when you graduate, unless you make the interest payments each month.

ajax
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Re: Student Loan Debt?

Postby ajax » Wed Oct 03, 2012 9:35 am

Tiago Splitter wrote:
EvilClinton wrote: Tiago's estimation means 6-10k more than any calculation I can find.

I also used this to calculate: http://webinfocentral.com/RESOURCES/PayrollTax.aspx


Good call. I used paycheckcity.com which didn't automatically include the city tax of just under $500 per month. But a lot of people forget that you stop paying Social Security taxes at the $110,100 mark, so take home increases by $559/month in the last third of the year.

Of course, for a lot of first year associates it's worse because they have to pay back salary advances in year one.



Yeah don't forget about the social security cap. It's a nice bonus come the holiday season-I always use it for that at least (I am a 0L but am fortunate enough to have solid financial success).

Also if you're living in Manhattan or one of the boroughs remember that you have to pay an additional 3 percent of your income to the city. If you live in NJ you can avoid this. People who used to live in NJ and work in NYC used to have to pay the city income tax, but not anymore.

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dingbat
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Re: Student Loan Debt?

Postby dingbat » Wed Oct 03, 2012 9:48 am

Chickensoup wrote:If you get biglaw, why not just pay the $1700 and use the rest of your $9000 per month on more important stuff?

I just want to point out that after food, rent, clothes and other basic necessities, nothing is more important than buying your way out of slavery

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manofjustice
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Re: Student Loan Debt?

Postby manofjustice » Wed Oct 03, 2012 10:10 am

Chickensoup wrote:How much is monthly student loan payment if you take out 150K in debt?

At 6.8% over 10 years, you are looking at $1726.20. Is that what most people end up having to pay each month?


You will be taking out more than 150k and paying more than 6.8%. Do your research. http://www.lstscorereports.com/

ajax
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Re: Student Loan Debt?

Postby ajax » Wed Oct 03, 2012 10:12 am

dingbat wrote:
Chickensoup wrote:If you get biglaw, why not just pay the $1700 and use the rest of your $9000 per month on more important stuff?

I just want to point out that after food, rent, clothes and other basic necessities, nothing is more important than buying your way out of slavery


+1000000000000000000000000000000000000000000000000000

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Bronte
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Re: Student Loan Debt?

Postby Bronte » Wed Oct 03, 2012 10:53 am

Chickensoup wrote:
2014 wrote:The bimodal salary deal pretty much ensures that you either aggressively pay down your loans by contributing as much of your biglaw salary as you can spare without regard for the minimum payment or your shit law/big starbucks salary sticks you in IBR.

So yeah your 10 year payment will be calculated as what you have it at, but realistically you probably won't pay anything close to that.


If you get biglaw, why not just pay the $1700 and use the rest of your $9000 per month on more important stuff?


The most "important" thing you can do with your money is pay down loans. You will get by far your highest return on investment by paying down loans. (It can make sense to max out your 401(k) and then take out a 401(k) loan and use that to pay down your loans, but that's a more advanced discussion.)

Even if you decide that your highest return on investment is spending your money on models and bottles, realize that you may also be putting yourself at risk of financial distress by not aggressively paying down your loans. Most people leave big law after three to five years. You will have a lot of debt left over after three to five years if you use a 10 year repayment plan.

How much debt? Using your assumptions ($150,000 at 6.8% APR monthly on a 10-year schedule), which others have pointed out are unduly optimistic, you will have a $115,000 balance after three years and an $88,000 balance after five years. If you take a substantial salary cut after leaving big law--or, worse, if the market collapses and you can't find professional work--those balances might become difficult to service.

ajax
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Re: Student Loan Debt?

Postby ajax » Wed Oct 03, 2012 12:05 pm

Bronte wrote:
Chickensoup wrote:
2014 wrote:The bimodal salary deal pretty much ensures that you either aggressively pay down your loans by contributing as much of your biglaw salary as you can spare without regard for the minimum payment or your shit law/big starbucks salary sticks you in IBR.

So yeah your 10 year payment will be calculated as what you have it at, but realistically you probably won't pay anything close to that.


If you get biglaw, why not just pay the $1700 and use the rest of your $9000 per month on more important stuff?


The most "important" thing you can do with your money is pay down loans. You will get by far your highest return on investment by paying down loans. (It can make sense to max out your 401(k) and then take out a 401(k) loan and use that to pay down your loans, but that's a more advanced discussion.)

Even if you decide that your highest return on investment is spending your money on models and bottles, realize that you may also be putting yourself at risk of financial distress by not aggressively paying down your loans. Most people leave big law after three to five years. You will have a lot of debt left over after three to five years if you use a 10 year repayment plan.

How much debt? Using your assumptions ($150,000 at 6.8% APR monthly on a 10-year schedule), which others have pointed out are unduly optimistic, you will have a $115,000 balance after three years and an $88,000 balance after five years. If you take a substantial salary cut after leaving big law--or, worse, if the market collapses and you can't find professional work--those balances might become difficult to service.


You will not necessarily get your highest return by paying down loans. S%P is up 15 percent year to date:

http://money.cnn.com/data/markets/sandp/

But it's not easy to play the market, so the most risk averse way would be to just pay down your loans basically earning you 8% (or whatever the rate is).

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Bronte
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Re: Student Loan Debt?

Postby Bronte » Wed Oct 03, 2012 12:20 pm

ajax wrote:You will not necessarily get your highest return by paying down loans. S%P is up 15 percent year to date:

http://money.cnn.com/data/markets/sandp/

But it's not easy to play the market, so the most risk averse way would be to just pay down your loans basically earning you 8% (or whatever the rate is).


The point is that paying down your loans is your best investment (after maxing out your 401(k)). Your loans give you a risk-free, tax-free 8% return. It is by far the best risk-adjusted rate of return you can expect in the market. I was a bit imprecise on that point.

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dingbat
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Re: Student Loan Debt?

Postby dingbat » Wed Oct 03, 2012 12:36 pm

ajax wrote:
Bronte wrote:
Chickensoup wrote:
2014 wrote:The bimodal salary deal pretty much ensures that you either aggressively pay down your loans by contributing as much of your biglaw salary as you can spare without regard for the minimum payment or your shit law/big starbucks salary sticks you in IBR.

So yeah your 10 year payment will be calculated as what you have it at, but realistically you probably won't pay anything close to that.


If you get biglaw, why not just pay the $1700 and use the rest of your $9000 per month on more important stuff?


The most "important" thing you can do with your money is pay down loans. You will get by far your highest return on investment by paying down loans. (It can make sense to max out your 401(k) and then take out a 401(k) loan and use that to pay down your loans, but that's a more advanced discussion.)

Even if you decide that your highest return on investment is spending your money on models and bottles, realize that you may also be putting yourself at risk of financial distress by not aggressively paying down your loans. Most people leave big law after three to five years. You will have a lot of debt left over after three to five years if you use a 10 year repayment plan.

How much debt? Using your assumptions ($150,000 at 6.8% APR monthly on a 10-year schedule), which others have pointed out are unduly optimistic, you will have a $115,000 balance after three years and an $88,000 balance after five years. If you take a substantial salary cut after leaving big law--or, worse, if the market collapses and you can't find professional work--those balances might become difficult to service.


You will not necessarily get your highest return by paying down loans. S%P is up 15 percent year to date:

http://money.cnn.com/data/markets/sandp/

But it's not easy to play the market, so the most risk averse way would be to just pay down your loans basically earning you 8% (or whatever the rate is).

You're the stuff market volatility is made of




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