Student loan payments: get advice and actual numbers here Forum

[Anonymous User]

SoFi's "career services" that you're forced to work with if you get shitcanned does not sound appealing to me.

Uhh.. you're not "forced" to work with them. It's an offered service. Frankly, I'd be worried for you if you didn't have the ability on your own to score another job and had to resort to their services.

If you sign up for SoFi's "Unemployment Protection," which I'm not sure why you wouldn't if you get shitcanned, their website says the following:

"If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our career services department to look for new employment."

Plenty of wiggle words there. What's "no fault of your own?"

Regardless, I read "you must actively work with our career services department" as its plain language meaning. If I get shitcanned, I'll be busy enough pounding the pavement on my own. I won't really be interested in forced meetings with a 22-year old intern who asks me if I have a LinkedIn page or not.

[Anonymous User]

I'm probably going to have upper 200s of debt (and big law) when I graduate and I'm definitely thinking of doing PAYE, even with the tax bomb. SoFi sounds tempting, but if I get laid off after 2-3 years, I could be left with 180k debt or so with zero liquidity. With PAYE I will probably pay more, but having the safety net is worth a lot to me. Especially since 180k debt and zero savings could potentially be financial death.

Besides, after 2 or 3 years of big law, I could probably save up 70-80k or more for the eventual tax bomb, so hopefully it will grow enough over the remaining 17 years (along with whatever I can throw in post big law) to cover it.

Thats my plan anyways. Any glaring flaws? You know, besides taking on this debt in the first place.

[englawyer]

For any 1L's or 2L's looking at this thread: I would recommend applying for private loans (e.g. Discover) during law school. The rate is usually cheaper than gradplus, and there are typically no origination fees. For at least 3L year, if you have biglaw lined up, I would also recommend going variable rate which is typically cheaper. Since you are biglaw secure, you can take out the variable loans and pay them off first if you are very risk averse. I think my Discover loan was 5% and had a graduation bonus.

[wildcatatpenn]

For any 1L's or 2L's looking at this thread: I would recommend applying for private loans (e.g. Discover) during law school. The rate is usually cheaper than gradplus, and there are typically no origination fees. For at least 3L year, if you have biglaw lined up, I would also recommend going variable rate which is typically cheaper. Since you are biglaw secure, you can take out the variable loans and pay them off first if you are very risk averse. I think my Discover loan was 5% and had a graduation bonus.

did you get parents or someone to cosign on your loan? Or were they willing to lend based on nothing but SA salary?

[rambleon65]

I'll be about 90-100K in debt at graduation. I was fortunate enough to get BigLaw in major city, market pay. I will not be married and will likely be renting for at least a few years. Those in similar situations, what's a realistic timeline to pay all of it back?

[XxSpyKEx]

I'll be about 90-100K in debt at graduation. I was fortunate enough to get BigLaw in major city, market pay. I will not be married and will likely be renting for at least a few years. Those in similar situations, what's a realistic timeline to pay all of it back?

Depends on city. It's pretty easy to repay $90k in debt with a $160k /year salary in Dallas. It's not nearly as easy to repay $90k in debt with a $160k /year salary in NYC.

[dixiecupdrinking]

I'll be about 90-100K in debt at graduation. I was fortunate enough to get BigLaw in major city, market pay. I will not be married and will likely be renting for at least a few years. Those in similar situations, what's a realistic timeline to pay all of it back?

Depends on city. It's pretty easy to repay $90k in debt with a $160k /year salary in Dallas. It's not nearly as easy to repay $90k in debt with a $160k /year salary in NYC.

2-3 years is probably the range regardless of market, though.

[XxSpyKEx]

I'll be about 90-100K in debt at graduation. I was fortunate enough to get BigLaw in major city, market pay. I will not be married and will likely be renting for at least a few years. Those in similar situations, what's a realistic timeline to pay all of it back?

Depends on city. It's pretty easy to repay $90k in debt with a $160k /year salary in Dallas. It's not nearly as easy to repay $90k in debt with a $160k /year salary in NYC.

2-3 years is probably the range regardless of market, though.

I could see doing it in a year in Texas. $160k is roughly $115k /year after taxes (since there's no income tax in Texas). If you live off roughly $20k (pretty doable in Texas), you'd have $90k + interest paid off in about a year. Probably around 3 years in NYC.

[Tiago Splitter]

If you can do it in one year in Texas you can easily do it in two in NYC.

[Anonymous User]

I'm probably going to have upper 200s of debt (and big law) when I graduate and I'm definitely thinking of doing PAYE, even with the tax bomb. SoFi sounds tempting, but if I get laid off after 2-3 years, I could be left with 180k debt or so with zero liquidity. With PAYE I will probably pay more, but having the safety net is worth a lot to me. Especially since 180k debt and zero savings could potentially be financial death.

Besides, after 2 or 3 years of big law, I could probably save up 70-80k or more for the eventual tax bomb, so hopefully it will grow enough over the remaining 17 years (along with whatever I can throw in post big law) to cover it.

Thats my plan anyways. Any glaring flaws? You know, besides taking on this debt in the first place.

It depends on your situation. I came out with a similar amount of debt (more like 240k though) and am doing biglaw in a big city. If you plan on staying private it's not crazy to do SOFI if you are diligent with paying down your loans. I pay 5k/month on my loans and live pretty comfortably (basically one check plus a bit more to loans, and the other check to other stuff). You may not have this situation however. Thats 60k/year on my loans (like 50 on the principal depending on your rate) so after 3 years the debt will be at like 90k. This does not count on receiving bonuses, though if I do you know where they're going. If you refinanced with a 10 year term you'll have 7 years left on your repayment. Your required monthly payments at this point will be around $1,200 at 4% interest. Even if you don't do biglaw that's do-able. If you received bonuses each year after taxes you're looking at like another 20k you could put on loans. Hang in there an extra year and you're debt is nearly completely paid off. Also, remember if you're lockstep your salary is going up a decent amount each year.

I understand being risk averse but if you want to stay biglaw for 3-4 years it's really not that hard, you aren't likely going to get fired your first couple years there. I do understand the anxiety though and it may be worth it to you to have that safety net. You will pay 10s of thousands of dollars in interest for that safety net though.

[englawyer]

For any 1L's or 2L's looking at this thread: I would recommend applying for private loans (e.g. Discover) during law school. The rate is usually cheaper than gradplus, and there are typically no origination fees. For at least 3L year, if you have biglaw lined up, I would also recommend going variable rate which is typically cheaper. Since you are biglaw secure, you can take out the variable loans and pay them off first if you are very risk averse. I think my Discover loan was 5% and had a graduation bonus.

did you get parents or someone to cosign on your loan? Or were they willing to lend based on nothing but SA salary?

SA salary, and I guess school strength

[Big Shrimpin]

Anyone do a comparo with SoFi/CommonBond? I applied to CB and their rates really weren't that great (10 year variable was like 5%, which at a 2.5% saving really isn't that great). I guess I have a lot left (125K), but I've been in biglaw for two years so far and have paid monthly without fail for about 24 months now.

I just did SoFi, so hoping they give me a better rate.

[Old Gregg]

Anyone do a comparo with SoFi/CommonBond? I applied to CB and their rates really weren't that great (10 year variable was like 5%, which at a 2.5% saving really isn't that great). I guess I have a lot left (125K), but I've been in biglaw for two years so far and have paid monthly without fail for about 24 months now.

I just did SoFi, so hoping they give me a better rate.

Sorry for not responding to your PM.

Common Bond are pieces of shit. I remember when I applied I was getting a significantly better rate from SoFi. CB kept spamming my inbox telling me to complete my application. I literally responded with a copy/paste of my SoFi interest rate and told them to match it or stop emailing me. Founder emailed me to say that they'd stop emailing me.

They still email me to this day.

I trust SoFi a lot more than I do Common Bond simply because SoFi has been on the market for longer. I trust SoFi more than DRB because DRB's variable rate ceiling is so much higher.

[Big Shrimpin]

Anyone do a comparo with SoFi/CommonBond? I applied to CB and their rates really weren't that great (10 year variable was like 5%, which at a 2.5% saving really isn't that great). I guess I have a lot left (125K), but I've been in biglaw for two years so far and have paid monthly without fail for about 24 months now.

I just did SoFi, so hoping they give me a better rate.

Sorry for not responding to your PM.

Common Bond are pieces of shit. I remember when I applied I was getting a significantly better rate from SoFi. CB kept spamming my inbox telling me to complete my application. I literally responded with a copy/paste of my SoFi interest rate and told them to match it or stop emailing me. Founder emailed me to say that they'd stop emailing me.

They still email me to this day.

I trust SoFi a lot more than I do Common Bond simply because SoFi has been on the market for longer. I trust SoFi more than DRB because DRB's variable rate ceiling is so much higher.

TY dood. Yeah, I'm hoping to hear back from SoFi tomorrow (with a hopefully better rate).

Would also be nice to just pay one amount to one balance, instead of 8 different payments to 8 different loans.

I'm conservative as FUARK when it comes to my finances, but I've done my research and spoken to all my banker bro friends (incl some doods who deal specifically in fixed income) and have determined that refi is the best way to go...especially in light of being ASSRAPED by the TYRANNY of 7.9% interest.

[Old Gregg]

I'm conservative as FUARK when it comes to my finances, but I've done my research and spoken to all my banker bro friends (incl some doods who deal specifically in fixed income) and have determined that refi is the best way to go...especially in light of being ASSRAPED by the TYRANNY of 7.9% interest.

7.5% is borderline usurious. I am appalled that, with the fed rate parked at 0%, the federal government is OK with charging 7.5% interest on student loans. Just adds insult to injury that we've let education cost upwards of $50k+ a year.

In terms of the prospects of LIBOR remaining low, you're asking what is probably literally a million dollar question. The markets believe that the fed rate will go up around middle of next year, so I would anticipate that your variable rate will start going up then. On the flipside, I don't think it'll go up by too much and there will be a corresponding deflation in a lot of other asset classes that have been inflated by the current low interest environment (i.e., real estate), so I think you'll still realize savings in other ways.

If worse comes to worse, you can refinance to a fixed rate with SoFi, which is still better than 7.5%.

[beach_terror]

You keep mentioning refi'ing with the same company. What incentive do they have to give you a better interest rate when they have you locked in higher? Obviously, Sofi seems like a good company - but I have trouble believing their investors are cool with them throwing away free interest money. Then again, I'm generally clueless with this stuff.

[Old Gregg]

You keep mentioning refi'ing with the same company. What incentive do they have to give you a better interest rate when they have you locked in higher? Obviously, Sofi seems like a good company - but I have trouble believing their investors are cool with them throwing away free interest money. Then again, I'm generally clueless with this stuff.

I actually did it when I had loans with SoFi. Got a better rate.

What incentives do they have? Well, they do have competitors for one.

[Elston Gunn]

If you're clerking, should you wait until you start Big Law to do the refi?

[dixiecupdrinking]

If you're clerking, should you wait until you start Big Law to do the refi?

I don't see why, unless you plan to use IBR or another federal repayment program while clerking.

[Old Gregg]

If you're clerking, should you wait until you start Big Law to do the refi?

I don't see why, unless you plan to use IBR or another federal repayment program while clerking.

SoFi bases their interest rate decision on your salary, at least partly. Probably a good idea to wait until biglaw.

[dixiecupdrinking]

If you're clerking, should you wait until you start Big Law to do the refi?

I don't see why, unless you plan to use IBR or another federal repayment program while clerking.

SoFi bases their interest rate decision on your salary, at least partly. Probably a good idea to wait until biglaw.

Ah yeah good point.

[beach_terror]

If you're clerking, should you wait until you start Big Law to do the refi?

I don't see why, unless you plan to use IBR or another federal repayment program while clerking.

SoFi bases their interest rate decision on your salary, at least partly. Probably a good idea to wait until biglaw.

It must weigh credit score a decent bit more too. I make >100k but my credit score is low 700s. Figured the salary would carry me, but it didn't.

[XxSpyKEx]

If you can do it in one year in Texas you can easily do it in two in NYC.

Your take home income is around $15k /year less after state and city taxes in NYC, and the cost of living is around 3 times as much. It's possible to do it in two years in NYC, but I don't think it would be as easy as doing it in 1 year in Texas.

[XxSpyKEx]

I'm probably going to have upper 200s of debt (and big law) when I graduate and I'm definitely thinking of doing PAYE, even with the tax bomb. SoFi sounds tempting, but if I get laid off after 2-3 years, I could be left with 180k debt or so with zero liquidity. With PAYE I will probably pay more, but having the safety net is worth a lot to me. Especially since 180k debt and zero savings could potentially be financial death.

Besides, after 2 or 3 years of big law, I could probably save up 70-80k or more for the eventual tax bomb, so hopefully it will grow enough over the remaining 17 years (along with whatever I can throw in post big law) to cover it.

Thats my plan anyways. Any glaring flaws? You know, besides taking on this debt in the first place.

It depends on your situation. I came out with a similar amount of debt (more like 240k though) and am doing biglaw in a big city. If you plan on staying private it's not crazy to do SOFI if you are diligent with paying down your loans. I pay 5k/month on my loans and live pretty comfortably (basically one check plus a bit more to loans, and the other check to other stuff). You may not have this situation however. Thats 60k/year on my loans (like 50 on the principal depending on your rate) so after 3 years the debt will be at like 90k. This does not count on receiving bonuses, though if I do you know where they're going. If you refinanced with a 10 year term you'll have 7 years left on your repayment. Your required monthly payments at this point will be around $1,200 at 4% interest. Even if you don't do biglaw that's do-able. If you received bonuses each year after taxes you're looking at like another 20k you could put on loans. Hang in there an extra year and you're debt is nearly completely paid off. Also, remember if you're lockstep your salary is going up a decent amount each year.

I understand being risk averse but if you want to stay biglaw for 3-4 years it's really not that hard, you aren't likely going to get fired your first couple years there. I do understand the anxiety though and it may be worth it to you to have that safety net. You will pay 10s of thousands of dollars in interest for that safety net though.

I would be very surprised if your interest rate is only at 4% three years from now. I would expect it to be much higher than that by then. The current historically low interest rates aren't going to last forever.

[Big Shrimpin]

But are they going up by like 3-4% in the next few years to moot the endeavor? Wouldn't that be a huge jump?

I've interrogated everyone I know in the banking industry (IB doods, HF doods, PE doods and VP level corporate banking doods). The unanimous response has been that, given a payoff date in 3-4 years and considering I'm paying about 8% net, I would be a 'tard not to refi at a 4% variable.

Obviously, you never know what's going to happen, but on a short term repayment, what is the argument against refi?