Student loan payments: get advice and actual numbers here Forum

[janefbk]

Just curious.... Has anyone that has ever posted on this thread since 2013 actually PAID OFF their student loans?

Just paid down my loans from $185k to $100k and refinanced to 3.5% with First Republic. Man paying this shit off is such a grind..

[Anonymous User]

Just curious.... Has anyone that has ever posted on this thread since 2013 actually PAID OFF their student loans?

Just paid down my loans from $185k to $100k and refinanced to 3.5% with First Republic. Man paying this shit off is such a grind..

I paid off my loans from around $200k and saved up to net worth six figures. (I'm a midlevel). It does take forever and it took a lot of QOL sacrifices for me to be able to pay it down quickly and save money. If I could go back in time I wouldn't have have made the same choices....making money is a lot harder than it looks and unfortunately taking out loans is super easy. I have a lot of regrets in my life - namely, taking out such big loans for law school, and second, going to law school. I should have just kept working straight out of college (had a job, didn't have any undergrad loans) and likely would have ended up with a six figure salary anyway and most definitely a higher net worth. Oh, well.

[Desert Fox]

At a certain point it doesn't make sense to keep paying down. I've already been maxing out 401k (30k last year) and have a big nest egg. After I get my payments down to 500 bucks a month, I'm just going To let it ride.

[toplawnerd]

Debt: 110,000
Loans: all fed, between 4% - 7%
Income: 220,000 (married, total income)
Payments: 1,500 monthly

Currently paying $1500/month total. Making minimum payments on lower interest loans and throwing extra at the 7% loan. Was planning to refi (with First Republic) in the next 6-12 months. Hadn't really considered an income based repayment method.

Assuming I can refi with First Rep. for 2-3% on a 7 or 10 year plan, is there any benefit to the income plans? Are those more desirable for those with 200k+ of loans?

[4thand9]

read the entire thread, reaction =

Similar question to above post.

The REPAYE plan looks awesome for someone with significant loan debt, even if the look to a semi-aggressive Avalanche repayment method.

for 3 loans amounting to nearly 200k with 5/6/7 interest rate breakdown, you could just do REPAYE to minimums on the 5/6 loans (with interest rate halved by government subsidy) and throw extra money at the 7 in an avalanche.

Downsides to REPAYE?

Edited to specifically ask about REPAYE, not necessarily the hypo/private refi

[bk1]

The only downsides to PAYE are versus refinancing. If you have fed loans and are PAYE eligible, you should be on PAYE. Whether you should pay above the PAYE minimums is a separate question.

[Johann]

Debt: 110,000
Loans: all fed, between 4% - 7%
Income: 220,000 (married, total income)
Payments: 1,500 monthly

Currently paying $1500/month total. Making minimum payments on lower interest loans and throwing extra at the 7% loan. Was planning to refi (with First Republic) in the next 6-12 months. Hadn't really considered an income based repayment method.

Assuming I can refi with First Rep. for 2-3% on a 7 or 10 year plan, is there any benefit to the income plans? Are those more desirable for those with 200k+ of loans?

nah youre gonna pay that all back. might as well refi for the low rate.

[JenDarby]

Debt: 110,000
Loans: all fed, between 4% - 7%
Income: 220,000 (married, total income)
Payments: 1,500 monthly

Currently paying $1500/month total. Making minimum payments on lower interest loans and throwing extra at the 7% loan. Was planning to refi (with First Republic) in the next 6-12 months. Hadn't really considered an income based repayment method.

Assuming I can refi with First Rep. for 2-3% on a 7 or 10 year plan, is there any benefit to the income plans? Are those more desirable for those with 200k+ of loans?

nah youre gonna pay that all back. might as well refi for the low rate.

this, definitely refi

[Anonymous User]

Does everyone else feel constant anxiety and depression because of the enormous amount of debt you're under?

I know I'm luckier than a lot of fellow graduates in my class: I have a job and I'm able to make significant payments towards my loans (about $120k). Barring no changes in the immediate future, I think I can pay off my loans in 3 years. Practically speaking, I know that's not terrible, but I feel trapped and this debt is all I think about everyday. I check my loan balance daily like a crazy person. I hate my job and honestly without this debt I don't think I'd be a lawyer at all. I just need this debt to be gone so I can be free to do something else with my life.

Let this be a lesson to 0L's. Don't go to law school without a full ride. Better yet, don't go to law school ever.

[Tiago Splitter]

Does everyone else feel constant anxiety and depression because of the enormous amount of debt you're under?

I know I'm luckier than a lot of fellow graduates in my class: I have a job and I'm able to make significant payments towards my loans (about $120k). Barring no changes in the immediate future, I think I can pay off my loans in 3 years. Practically speaking, I know that's not terrible, but I feel trapped and this debt is all I think about everyday. I check my loan balance daily like a crazy person. I hate my job and honestly without this debt I don't think I'd be a lawyer at all. I just need this debt to be gone so I can be free to do something else with my life.

Let this be a lesson to 0L's. Don't go to law school without a full ride. Better yet, don't go to law school ever.

If you haven't refi'd yet go on PAYE and save a bunch of cash. No reason to let a job ruin your life.

[bk1]

Does everyone else feel constant anxiety and depression because of the enormous amount of debt you're under?

I know I'm luckier than a lot of fellow graduates in my class: I have a job and I'm able to make significant payments towards my loans (about $120k). Barring no changes in the immediate future, I think I can pay off my loans in 3 years. Practically speaking, I know that's not terrible, but I feel trapped and this debt is all I think about everyday. I check my loan balance daily like a crazy person. I hate my job and honestly without this debt I don't think I'd be a lawyer at all. I just need this debt to be gone so I can be free to do something else with my life.

Let this be a lesson to 0L's. Don't go to law school without a full ride. Better yet, don't go to law school ever.

You need to learn to control your anxiety. Stop checking your loans constantly. Realize that thinking about your debt isn't going to change anything. Maybe look into therapy.

[whysoseriousbiglaw]

Does everyone else feel constant anxiety and depression because of the enormous amount of debt you're under?

I know I'm luckier than a lot of fellow graduates in my class: I have a job and I'm able to make significant payments towards my loans (about $120k). Barring no changes in the immediate future, I think I can pay off my loans in 3 years. Practically speaking, I know that's not terrible, but I feel trapped and this debt is all I think about everyday. I check my loan balance daily like a crazy person. I hate my job and honestly without this debt I don't think I'd be a lawyer at all. I just need this debt to be gone so I can be free to do something else with my life.

Let this be a lesson to 0L's. Don't go to law school without a full ride. Better yet, don't go to law school ever.

I sort of felt like this when I had 200k debt (although I didn't check my loan amount that often - checking doesn't do anything). It completely went away when I hit positive net worth even though I still had some debt left. Now, I'm just trying to figure out what I want to do next with my life (I still hate my job - that never changes). I also give less of a fuck at work now. Don't worry - your debt will be a lot lower in a year and you will be positive net worth in no time. Just think of this as a very expensive learning opportunity on what you want out of life and also how to manage your finances.

[Desert Fox]

Does everyone else feel constant anxiety and depression because of the enormous amount of debt you're under?

I know I'm luckier than a lot of fellow graduates in my class: I have a job and I'm able to make significant payments towards my loans (about $120k). Barring no changes in the immediate future, I think I can pay off my loans in 3 years. Practically speaking, I know that's not terrible, but I feel trapped and this debt is all I think about everyday. I check my loan balance daily like a crazy person. I hate my job and honestly without this debt I don't think I'd be a lawyer at all. I just need this debt to be gone so I can be free to do something else with my life.

Let this be a lesson to 0L's. Don't go to law school without a full ride. Better yet, don't go to law school ever.

If you haven't refi'd yet go on PAYE and save a bunch of cash. No reason to let a job ruin your life.

This is why I tell people to skip the refi. Especially if you are trying to pay it all off in 3 years. Then difference between 7% and 4-5% (fixed or 2-3% variable) doesn't make a big difference over three years.

[Anonymous User]

Current 3L, thinking about if I should refinance, go on PAYE, or do nothing and aggressively pay down. I'm a bit terrified of the PAYE tax bomb, so I'm leaning towards refinancing, unless there's a good reason not to. Any and all advice is much appreciated.

Debt at graduation: ~$200k (with interest capitalization), or ~$185k if I refi and interest doesn't capitalize
Income: $160k + market bonus - Intend to stay in biglaw 3-5 years

FWIW, my significant other, who is likely to be my fiancé in the next 6-8 months, will be graduating with ~$200k debt with income around $70k. However, she can likely have some if not all of her debt forgiven, or will likely do PAYE.

TYIA!

[bdubs]

Debt at graduation: ~$200k (with interest capitalization), or ~$185k if I refi and interest doesn't capitalize

I think you are misunderstanding how interest capitalization works. You still have to pay the interest, it just wasn't compounded continually while you were in school. With refinance rates at current levels you won't save $15,000 in interest alone over the course of a year.

[janefbk]

Does everyone else feel constant anxiety and depression because of the enormous amount of debt you're under?

I know I'm luckier than a lot of fellow graduates in my class: I have a job and I'm able to make significant payments towards my loans (about $120k). Barring no changes in the immediate future, I think I can pay off my loans in 3 years. Practically speaking, I know that's not terrible, but I feel trapped and this debt is all I think about everyday. I check my loan balance daily like a crazy person. I hate my job and honestly without this debt I don't think I'd be a lawyer at all. I just need this debt to be gone so I can be free to do something else with my life.

Let this be a lesson to 0L's. Don't go to law school without a full ride. Better yet, don't go to law school ever.

Every time I see an auto-debit for my student loan payment I die a little inside. All you can do is stop checking your loan balance. One thing we did is deposit all our extra money into a separate checking account and every time the balance exceeded $10k we paid down $10k of my student debt. I don't know why that helps but there is something about watching your loan's principal get paid down dramatically (I consider $10k off dramatic) that gives you a bit of satisfaction and relief. Definitely unnecessary but it's a mind game that has worked well for me.

[Johann]

I just think of the loan balance the way same way I did in law school - Monopoly money. Me and fiancé are over 500k in debt and I don't give a fuck. Combined we pay like 375 a month and take in about 200k. Pretty good life if you ask me.

[KM2016]

I just think of the loan balance the way same way I did in law school - Monopoly money. Me and fiancé are over 500k in debt and I don't give a fuck. Combined we pay like 375 a month and take in about 200k. Pretty good life if you ask me.

Tell me your secrets. Wife and I are about $400k in the hole, and between my standard payments and her PAYE we pay around $3000/month.

[Johann]

I just think of the loan balance the way same way I did in law school - Monopoly money. Me and fiancé are over 500k in debt and I don't give a fuck. Combined we pay like 375 a month and take in about 200k. Pretty good life if you ask me.

Tell me your secrets. Wife and I are about $400k in the hole, and between my standard payments and her PAYE we pay around $3000/month.

Don't be on standard payments. I'm using a 2014 tax return from my stub year tax return that is pretty distorted now but within paye rules.

[Anonymous User]

What's the general view on prioritizing paying down student loans vs. 401k vs. saving for a down payment?

For some context (numbers include husband and me, living in Boston):

Debt = $165K ($2200 monthly payment, 4-7% interest rate, no refinancing)
Income = $255K + market biglaw bonuses
Savings = $15K
Current 401k Contributions = 10% for me, 6% for husband (neither employers match)

We'd like to start saving for a house, but I'm not sure if we should be throwing some of that savings toward paying down student loans. We'd need at least $45K for a down payment given the area we are looking and the mortgage we'd be approved for.

[A. Nony Mouse]

I just think of the loan balance the way same way I did in law school - Monopoly money. Me and fiancé are over 500k in debt and I don't give a fuck. Combined we pay like 375 a month and take in about 200k. Pretty good life if you ask me.

Tell me your secrets. Wife and I are about $400k in the hole, and between my standard payments and her PAYE we pay around $3000/month.

Don't be on standard payments. I'm using a 2014 tax return from my stub year tax return that is pretty distorted now but within paye rules.

That's going to end pretty soon, though, right? 375 for a year is great but it's not a permanent solution.

[Johann]

I just think of the loan balance the way same way I did in law school - Monopoly money. Me and fiancé are over 500k in debt and I don't give a fuck. Combined we pay like 375 a month and take in about 200k. Pretty good life if you ask me.

Tell me your secrets. Wife and I are about $400k in the hole, and between my standard payments and her PAYE we pay around $3000/month.

Don't be on standard payments. I'm using a 2014 tax return from my stub year tax return that is pretty distorted now but within paye rules.

That's going to end pretty soon, though, right? 375 for a year is great but it's not a permanent solution.

My recert comes up in December. So the way I timed it means I'm always at least 1 year behind. As a 1st year, I paid $0 all year (based on unemployed/student 2013 income); 2nd year is $375 which is good for 9 more months; 3rd year will be based on $200k married income, so I'm still expecting sub 1,000 since we will use everything we can to get our AGI down - 401k, IRAs, etc. 2018 will be the year I get "fucked" and have to pay $2,500 combined or something per month with a household income nearing 300k.

[Anonymous User]

I refinanced all of my student loans with SOFI last year (~$61k). I've received 1098-Es from my old lenders indicating that I paid a lot in student loan interest last year. In reality, SOFI paid off these old loans, so I didn't pay these old lenders out of pocket. Still, as far as the paperwork is concerned, it looks like I have a lot of student loan interest payments to deduct. I just finished my biglaw stub year, so my income in 2015 was low enough to take the max $2500 student loan interest deduction.

Has anybody here been in a similar situation? Can I take this deduction, even though I didn't actually pay +$2500 in student loan interest last year?

[JenDarby]

I refinanced all of my student loans with SOFI last year (~$61k). I've received 1098-Es from my old lenders indicating that I paid a lot in student loan interest last year. In reality, SOFI paid off these old loans, so I didn't pay these old lenders out of pocket. Still, as far as the paperwork is concerned, it looks like I have a lot of student loan interest payments to deduct. I just finished my biglaw stub year, so my income in 2015 was low enough to take the max $2500 student loan interest deduction.

Has anybody here been in a similar situation? Can I take this deduction, even though I didn't actually pay +$2500 in student loan interest last year?

yes of course. you did pay it, you just borrowed money from sofi to do it.

also in reality if you made any payments last year at all, they went to interest so you did pay interest directly too

[Johann]

I refinanced all of my student loans with SOFI last year (~$61k). I've received 1098-Es from my old lenders indicating that I paid a lot in student loan interest last year. In reality, SOFI paid off these old loans, so I didn't pay these old lenders out of pocket. Still, as far as the paperwork is concerned, it looks like I have a lot of student loan interest payments to deduct. I just finished my biglaw stub year, so my income in 2015 was low enough to take the max $2500 student loan interest deduction.

Has anybody here been in a similar situation? Can I take this deduction, even though I didn't actually pay +$2500 in student loan interest last year?

yes of course. you did pay it, you just borrowed money from sofi to do it.