Student loan payments: get advice and actual numbers here Forum

[bk1]

Was quoted 3.95% fixed with one company, and 2.91% variable with another company. Not eligible for First Republic because of location. Going to refi about $150k. Any thoughts on which offer I should take? Does anyone have really positive or really negative opinions about any of the refi companies??

It's a question of your risk tolerance. Are you willing to risk the variable rate rising above 3.95? My general view is that since we're talking shorter time frames for student loans (e.g., 10 years), variable rates are not as risky as they might be for a longer term loan like a mortgage.

[Johann]

Does anyone think that it could make sense to go on PAYE and hope that there is some form of student loan forgiveness program in the next 25 years?

I'll have 140k when I graduate, was planning on paying them down aggressively for a year and a half then refinancing. Have a buddy who insists that refinancing is stupid because the government will bail out student loan holders in the next 10-15 years. I contend that even if substantive student reform happens, they aren't going to be forgiving the loans of corporate lawyers.

Anyone with a policy bent have any thoughts?

youre gonna pay that all off as long as your salary stays above 90k or so. im kind of banking on some student loan forgiveness programs, but im also holding something like $600k of debt between me and my SO. 140k isnt that bad though. maybe PAYE for a year and make sure you like biglaw? but id probably refi asap and im very confident more forgiveness programs are coming down the pipe - problem is they wont be for high earners.

Are you guys relying on PLSF? Wouldn't the tax bomb be insane with this amount of debt and PAYE?

not sure what im relying on. that's future me's problem. but im fairly certain the tax bomb will be written out of student debt very soon (it's just lingering because no one has had to pay it, so it's not a pressing problem for congress).

[JCougar]

There's almost certain to be some student loan forgiveness program in the near future. I'm paying as little as I can. With what I'm making, that's close to $0 anyways.

The student loan program is nothing but a back-door stimulus program to work around an intransigent Congress intent on sabotaging the President's economic recovery. Think about it...it pays a bunch of otherwise unemployable people like a $25K salary, plus it allows universities to add construction and administrative jobs. It's meant to temporarily boost the economy in the near-term, with fuck-the-future consequences. When the future becomes now, it's all going to get erased.

The numbers are so absurd at this point that it's probably getting close to mathematically impossible for law grads to pay their loans back. At some point, there will simply more total loan debt than disposable income in the entire industry.

[whysoseriousbiglaw]

There's almost certain to be some student loan forgiveness program in the near future. I'm paying as little as I can. With what I'm making, that's close to $0 anyways.

The student loan program is nothing but a back-door stimulus program to work around an intransigent Congress intent on sabotaging the President's economic recovery. Think about it...it pays a bunch of otherwise unemployable people like a $25K salary, plus it allows universities to add construction and administrative jobs. It's meant to temporarily boost the economy in the near-term, with fuck-the-future consequences. When the future becomes now, it's all going to get erased.

The numbers are so absurd at this point that it's probably getting close to mathematically impossible for law grads to pay their loans back. At some point, there will simply more total loan debt than disposable income in the entire industry.

Are you still doing doc review or have you left the profession?

[IrwinM.Fletcher]

Was quoted 3.95% fixed with one company, and 2.91% variable with another company. Not eligible for First Republic because of location. Going to refi about $150k. Any thoughts on which offer I should take? Does anyone have really positive or really negative opinions about any of the refi companies??

It's a question of your risk tolerance. Are you willing to risk the variable rate rising above 3.95? My general view is that since we're talking shorter time frames for student loans (e.g., 10 years), variable rates are not as risky as they might be for a longer term loan like a mortgage.

Many lenders have relatively low ceilings on their variable rate loans too, which further mitigates the risk (I believe the rate cap on my variable was 6.9% when I refi'd @ 3% and change).

Also, it doesn't really matter if the rate blows up towards the end of the loan - if you refi at 3% with a 10 year repayment, and that rate stays steady between 3 and 4% during years 1-8 before blowing up to 6% in years 9 and 10, then your added cost is still minimal because the amount of remaining interest payable close to maturity is small. OTOH, if the rate blows up early, then whoops.

Like bk sez tho, it all comes down to your risk tolerance.

[swampthang]

Was quoted 3.95% fixed with one company, and 2.91% variable with another company. Not eligible for First Republic because of location. Going to refi about $150k. Any thoughts on which offer I should take? Does anyone have really positive or really negative opinions about any of the refi companies??

It's a question of your risk tolerance. Are you willing to risk the variable rate rising above 3.95? My general view is that since we're talking shorter time frames for student loans (e.g., 10 years), variable rates are not as risky as they might be for a longer term loan like a mortgage.

Many lenders have relatively low ceilings on their variable rate loans too, which further mitigates the risk (I believe the rate cap on my variable was 6.9% when I refi'd @ 3% and change).

Also, it doesn't really matter if the rate blows up towards the end of the loan - if you refi at 3% with a 10 year repayment, and that rate stays steady between 3 and 4% during years 1-8 before blowing up to 6% in years 9 and 10, then your added cost is still minimal because the amount of remaining interest payable close to maturity is small. OTOH, if the rate blows up early, then whoops.

Like bk sez tho, it all comes down to your risk tolerance.

This is a really good point. The most important interest rate is the one at the beginning of the term where the loan balance is still large. That said, I've seen caps more like 9% on variables, but it's a good thing to know.

[Anonymous User]

Update after 13 months of working:

Debt: $118k (was $147k when interest capitalized at repayment)
Income: Above market
Payment: $2080 (was $2620, see notes)
Plan: 5 yr (see notes)
Notes: I did a DRB refi just prior to graduating at about 2.5% variable and they let me schedule repayment to begin 6 months later. I made 12 payments and last month did a First Republic refi at 1.95% fixed. Planning to put the $540/month difference into savings and/or bond funds to use for full payoff at the 47th month to get the FRB interest rebate.

[Greenandgold]

Update after 13 months of working:

Debt: $118k (was $147k when interest capitalized at repayment)
Income: Above market
Payment: $2080 (was $2620, see notes)
Plan: 5 yr (see notes)
Notes: I did a DRB refi just prior to graduating at about 2.5% variable and they let me schedule repayment to begin 6 months later. I made 12 payments and last month did a First Republic refi at 1.95% fixed. Planning to put the $540/month difference into savings and/or bond funds to use for full payoff at the 47th month to get the FRB interest rebate.

As someone living in Texas, seeing these interest rates from First Republic makes me incredibly jealous. Congrats on the refi.

[Nebby]

Ight fam, it's show time. I am wondering if anyone has info on how a rate hike would affect variable rates

I am refinancing my private undergrad debt of 66,630.00

My current blended rate across the loans is 8.94%

The best 10-year repayment offer I have is from Citizen Bank at either 5.84% fixed or 4.72% variable. The fixed rate means I pay $88,137.13 in total, and the variable (estimate) is $83,723.92.

Obviously, both are huge savings.

My main question has to do with how much a variable rate can go. If I go with the 4.72, is it possible that it could go up to 6 or 7?

[Mr. Peanutbutter]

Ight fam, it's show time. I am wondering if anyone has info on how a rate hike would affect variable rates

I am refinancing my private undergrad debt of 66,630.00

My current blended rate across the loans is 8.94%

The best 10-year repayment offer I have is from Citizen Bank at either 5.84% fixed or 4.72% variable. The fixed rate means I pay $88,137.13 in total, and the variable (estimate) is $83,723.92.

Obviously, both are huge savings.

My main question has to do with how much a variable rate can go. If I go with the 4.72, is it possible that it could go up to 6 or 7?

Does the variable rate have fine print that lays out a cap? I've seen those a lot. Also, I'd be skeptical of anyone who says they have any idea where rates will go. The last decade has been unprecedented. Unless you see yourself being able to quickly pay down the loan if rates start climbing, I wouldn't do variable if there's no cap, but I'm also super wary of unpredictable cash flow so that's just me.

[Nebby]

Ight fam, it's show time. I am wondering if anyone has info on how a rate hike would affect variable rates

I am refinancing my private undergrad debt of 66,630.00

My current blended rate across the loans is 8.94%

The best 10-year repayment offer I have is from Citizen Bank at either 5.84% fixed or 4.72% variable. The fixed rate means I pay $88,137.13 in total, and the variable (estimate) is $83,723.92.

Obviously, both are huge savings.

My main question has to do with how much a variable rate can go. If I go with the 4.72, is it possible that it could go up to 6 or 7?

Does the variable rate have fine print that lays out a cap? I've seen those a lot. Also, I'd be skeptical of anyone who says they have any idea where rates will go. The last decade has been unprecedented. Unless you see yourself being able to quickly pay down the loan if rates start climbing, I wouldn't do variable if there's no cap, but I'm also super wary of unpredictable cash flow so that's just me.

Yeah, with my PI salary, predictable cash flow is really important to me as well

[kay2016]

Graduated in May.. Around $130,000 total in loans, including a small private bar loan.

Working as an ADA... Therefore I guess I will be paying the minimum on my gov loans and pray that PSLF doesn't disappear.

Is the consensus that I should wait to certify my income so that I do not have to be transferred from Great Lakes to FedLoan for my loan servicing?

[bk1]

Graduated in May.. Around $130,000 total in loans, including a small private bar loan.

Working as an ADA... Therefore I guess I will be paying the minimum on my gov loans and pray that PSLF doesn't disappear.

Is the consensus that I should wait to certify my income so that I do not have to be transferred from Great Lakes to FedLoan for my loan servicing?

I'm confused, why would you be transferred?

[kay2016]

Graduated in May.. Around $130,000 total in loans, including a small private bar loan.

Working as an ADA... Therefore I guess I will be paying the minimum on my gov loans and pray that PSLF doesn't disappear.

Is the consensus that I should wait to certify my income so that I do not have to be transferred from Great Lakes to FedLoan for my loan servicing?

I'm confused, why would you be transferred?

I *believe* if you submit a PSLF Income Certification that it starts the transfer service because FedLoan Servicing is the servicer for PSLF. I've read horror stories (maybe in this thread, maybe in one of the others about PSLF) about FedLoan being not only terrible in general, but putting loans in deferment instead of counting payments towards the 120 for various reasons.

[A. Nony Mouse]

I'm pretty sure I got switched to FedLoan before I actually certified any employment (I could be wrong, but that's what I remember). And I saw those stories about loans going into deferment instead of counting, but I haven't had any particular problems with FedLoan. IIRC the issue is that you have to be paying under an income-based repayment plan for the payments to count toward PSLF, and if you don't recertify your income on time (once every 12 months at least) you'll lose a month because they'll stick you on the standard plan until the certification comes through. Also, if you change your payment plan (like from IBR to REPAYE) it can take them a little while to process the change, and you can lose a payment that way. That is, once you request to change your plan you're off the old plan, but if they don't get the change processed by your next payment due date, you're not yet on the new income-based plan, so that month you'll be on the standard repayment plan, which won't count toward PSLF (you can defer if you can't afford it, and I think they let you do one month with a $5 payment, but still counts as standard). You do kind of have to stay on top of everything, but I don't know how specific that is to FedLoan.

Edit: deleted the bit above that was wrong - see below.

(FWIW, I've only certified jobs I've left - clerkships, so short term - because my theory is why bother having my employer certify until I know how many years I've done with them? A friend in my office takes the opposite tack, and certifies her employment every year because she's afraid something will happen and some of her years will get lost. But since it's literally just your employer giving your start and end date I don't see how that can really happen, so I don't see any issue in waiting if you don't want to certify now.)

[kay2016]

Thanks Nony!

[Quichelorraine]

I'm pretty sure I got switched to FedLoan before I actually certified any employment (I could be wrong, but that's what I remember). And I saw those stories about loans going into deferment instead of counting, but I haven't had any particular problems with FedLoan. IIRC the issue is that you have to be paying under an income-based repayment plan for the payments to count toward PSLF, and if you don't recertify your income on time (once every 12 months at least) you'll lose a month because they'll stick you on the standard plan until the certification comes through.

That shouldn't be the case. PSLF counts every on-time payment on a "qualifying payment plan." Per the PSLF FAQ:

Qualifying repayment plans include all of the income-driven repayment plans (plans that base your monthly payment on your income) and the 10-year Standard Repayment Plan.

In other words, if you don't recertify in time, FedLoan Servicing might kick you over to the standard 10-year repayment plan...but any payment made on that plan should count for PSLF.

[A. Nony Mouse]

Huh, you're right. Sorry to be misleading. I know that the issue people have had is that the problems with certifying or changing plans have added to their PSLF time. Maybe it was that they've had to defer payment while switched to the standard plan and that the deferral doesn't count as a payment? That's probably it.

[Quichelorraine]

Huh, you're right. Sorry to be misleading. I know that the issue people have had is that the problems with certifying or changing plans have added to their PSLF time. Maybe it was that they've had to defer payment while switched to the standard plan and that the deferral doesn't count as a payment? That's probably it.

With FedLoan, I've had the problem where asking to change my monthly payment based on change in circumstances almost always gets me an automatic one-month deferral while they figure shit out. I *hate* that; I "lost" months each time. My advice, with FedLoan, is to never ever ever use the "Asking to recalculate based on changed circumstances" box if you can help it. If your income goes down, try to tough it out 'til the next annual recertification and simply report the new income then. But I realize that's easier said than done.

[ballouttacontrol]

So I submitted my REPAYE application back in April and still haven't heard anything. Started my job over a month ago, and not making any qualifying payments. What happens if I don't hear back before my loans deferment ends?

So annoying ....

[A. Nony Mouse]

They don't process them until the deferral period is coming to an end. If it doesn't get done before your deferral period ends, you'll have to pay on the standard 10-year plan until they get the application done. (But you can defer if you can't pay!!!! so helpful. not). They did get my application and that of everyone I know done before the deferral period was over, but they warned us all they might not make it in time and we might need to be prepared to make one standard payment (or defer. you can ALWAYS defer!).

[Anonymous User]

With fedloan/PSLF how do I report changes in income/do I need to more than annually? Randomly remembered today while I was paying my loan that I received a small raise back in like March/April (like $2500 annually, before tax... Not much). Was I supposed to update my income with fedloan servicing back then? What if my salary increase had been more dramatic, like if it had doubled?

[A. Nony Mouse]

In theory, I think you are supposed to report changes in your income that would change your payment (and of course people have an incentive to do when their income goes down). But in practice, you're only required to do so once every 12 months, and I don't see how you could get dinged for not updating sooner.

[Anonymous User]

In theory, I think you are supposed to report changes in your income that would change your payment (and of course people have an incentive to do when their income goes down). But in practice, you're only required to do so once every 12 months, and I don't see how you could get dinged for not updating sooner.

Thanks! I'll roll with it then.

[ballouttacontrol]

Is there any way to check the status of my REPAYE application I filed back in April? Do I have to just call them?