Student loan payments: get advice and actual numbers here Forum

[sparty99]

In my opinion, I think many, if not most, people in here are SIGNIFICANTLY undervaluing staying on REPAYE if your debt is anything like 100-150k+. Even if you're at tip-top compensation biglaw.

My average loan rate is like 6%, with tons of gradplus loans, and if I refinanced to a fantastic fixed interest rate lets of like 3%. With my pretty hefty 160k student loans. And assuming AGI=salary-$40k, b/c that's about what mine came out to last year.

Using these numbers, my 3% refi monthly payments (10 yr) would be $1545. Regardless of salary.
OTOH, the 6% 10 year payment with no program help at all would be $1776. But only if you're stackin ca$$$h

Using REPAYE, the breakeven point where you'd be paying a maximum payment equal to a 10 year payment w/ 6% interest would be a salary of $‭271,120‬ (!!!), plus or minus a little bit depending on how much your tax savings vary from mine (I take tax avoidance pretty seriously, but I'm also single w/ no kids or house and shit).

The chances of you reaching that $270k+ salary, let's face it, aren't great. Including bonus, that's like, 4th yr biglaw assoc at Cravath scale when you hit that much? And even if you get there, you're proooobably not the dude staying at NY V50 for 10+ years, frfr. And if you do, well, I feel sorry for you, but you'll be super rich by then anyways. And then you're paying an extra $230 a month, or $2772 a year. Not thaaat bad. AND you can just go refinance then with your 99999999 credit score.

OTOHHHH, what if you move to a normal job paying $150k, either off the bat outside of NYC, or lateraling to inhouse, whatever...? Then, all of a sudden you're literally paying $767 a month. Saving like $800 a month versus refi. AND, since the 6% interest on $150k is $800 a month, the government is literally gonna pay $16 a month on your loan for you, just to be a nice guy.


But the best part... is the ZILLIONS of times in life you work less than 52 weeks of the year. You move jobs and take a few months of vacay in between. You have a kid and take a year off from work. You go travel for a year. You start a business. You get laid off. Literally a BAJILLION things......

Let's say your "salary" drops to $70k for that year.. Well, you're probably not gonna be getting $40k in deductions anymore, but let's say you still manage $25k (very easy), then you're paying $225 a month! And the Govt cuts you a check (to your loan) of $287. Just for shits.

Honestly, it's an ABSURD entitlement that Congress gave us, but it is friken awesome.

It gives you SOOOO much flexibility, and in reality, it's really more of a wage garnishment than a loan, since any time you choose to decrease your own AGI, you just don't have to pay and someone else pays if for you. lulz.

I'd wager that by the numbers, probably 19 out of 20 people would come out ahead by staying on it indefinitely (not that many of us are gonna be making those $500k partner salaries, sorry guyz).

Anddddd, after 25 years, even counting the tax bomb, you get one last massive gift of 70% or so of the value just gifted to you in the form of cancellation?? Like. Smfh. Absolute insanity, if we're being real.

(And I'm sure everyone knows, but if not... year 1 payments are based on law school salary, and year 2 payments are based on stub year, so those years you essentially pay diddley squat and get checks from the govt to boot)


Just sayinnnnn. Don't give up the stupidest/best program ever to benefit rich kids.

The debt is just going to increase big time on PAYE and REPAYE. I do not recommend waiting 25 years especially if your debt is 160k. The key is to get into big law quickly. But even on a 70k salary you could pay off 160k in 6 years?

[nixy]

So you’re not actually personally putting $6k to loans every month then? (Sorry, this is @sparty.)

[QContinuum]

So you’re not actually personally putting $6k to loans every month then?

And this, folks, is the kind of value add you can get from diligence/discovery done right. The leading proponent of putting $6k to loans ("easily"!) every month, foregoing any savings, foregoing any emergency funds, is, in reality, not putting anywhere close to $6k to loans every month, but is instead accumulating a large pile of savings (in line with every other poster's recommendation ITT).

[sparty99]

So you’re not actually personally putting $6k to loans every month then?

And this, folks, is the kind of value add you can get from diligence/discovery done right. The leading proponent of putting $6k to loans ("easily"!) every month, foregoing any savings, foregoing any emergency funds, is, in reality, not putting anywhere close to $6k to loans every month, but is instead accumulating a large pile of savings (in line with every other poster's recommendation ITT).

Well, no. I have a savings account that is $15,000 that was created from a signing bonus and basically another month of savings. And then another savings account that is titled "Student Loans" and I put the $6,000 in there (or more). The difference between me and my advice to others is that I am not investing the cash into a 401(k) (or any other investment vehicles), have not used it on a down-payment, or anything else. It is all liquid and I plan on doing the lump sum payments - $20k here, $10k here. And I plan on using that $15,000 which is currently earmarked as an emergency fund to pay off the loans when I get closer to that day. Hopefully 1.5 years if I survive big law that long.

[The Lsat Airbender]

The difference between me and my advice to others is that I am not investing the cash into a 401(k) (or any other investment vehicles), have not used it on a down-payment, or anything else. It is all liquid and I plan on doing the lump sum payments - $20k here, $10k here.

So you're doing something even stupider than your advice to others (which might explain why you sincerely think it's good advice) -- letting your money get inflated in a zero-yield cash account.

[sparty99]

The difference between me and my advice to others is that I am not investing the cash into a 401(k) (or any other investment vehicles), have not used it on a down-payment, or anything else. It is all liquid and I plan on doing the lump sum payments - $20k here, $10k here.

So you're doing something even stupider than your advice to others (which might explain why you sincerely think it's good advice) -- letting your money get inflated in a zero-yield cash account.

Except its not a 0% cash account, thanks. And it is only in that account temporarily (minus the $15,000 emergency fund) as I will be making lump payments. But you are kind of annoying so I would appreciate if you stop talking to me. You really deserve no response from me.

[nixy]

I still absolutely don’t get why someone so vehement about getting rid of debt as quickly as possible because it’s evil is building up to “lump sum payments” rather than paying as you go. Is there some benefit to paying in a lump sum that I’m missing?

[The Lsat Airbender]

The difference between me and my advice to others is that I am not investing the cash into a 401(k) (or any other investment vehicles), have not used it on a down-payment, or anything else. It is all liquid and I plan on doing the lump sum payments - $20k here, $10k here.

So you're doing something even stupider than your advice to others (which might explain why you sincerely think it's good advice) -- letting your money get inflated in a zero-yield cash account.

Except its not a 0% cash account, thanks. And it is only in that account temporarily (minus the $15,000 emergency fund) as I will be making lump payments. But you are kind of annoying so I would appreciate if you stop talking to me. You really deserve no response from me.

I gave up a while ago on expecting a useful explanation as to why this is a good idea -- I just want to make sure the ramifications of your advice are clear to lurkers so that they will not follow you down the path of self-inflicted poverty.

Seriously, I would love for you to substantively defend any of this. For instance, if you know how to keep cash in a "liquid" account that beats (or even matches) inflation, that would be groundbreaking information.

[sparty99]

I still absolutely don’t get why someone so vehement about getting rid of debt as quickly as possible because it’s evil is building up to “lump sum payments” rather than paying as you go. Is there some benefit to paying in a lump sum that I’m missing?

I lateral and wanted to see how everything shakes out in the first 12 months before I started paying 6k to the loans and would never see again. I am paying as I go but in a different manner. I wanted like 50k in total and then actually start throwing money hard at the debt. I am not worried about the interest because it's the total debt that concerns me. Anyhow, I am 1.5 years away if I last in big law which is never a given.

[nixy]

Okay - to each their own - but it still doesn't make any sense to me that you're advising people to something that you yourself aren't actually doing, at all, and isn't really consistent with what you're advising.

[sparty99]

Okay - to each their own - but it still doesn't make any sense to me that you're advising people to something that you yourself aren't actually doing, at all, and isn't really consistent with what you're advising.

I advise no maxing out 401k, investing, buying a home, and keeping 6,000. It's very consistent. Just when I distribute the 6k might be what is throwing you off.

[Wubbles]

Okay - to each their own - but it still doesn't make any sense to me that you're advising people to something that you yourself aren't actually doing, at all, and isn't really consistent with what you're advising.

I advise no maxing out 401k, investing, buying a home, and keeping 6,000. It's very consistent. Just when I distribute the 6k might be what is throwing you off.

Why would you propose not investing in a 401k in order to sit on excess liquid cash while the amount of interest you owe on your student loans increases?

[sparty99]

Okay - to each their own - but it still doesn't make any sense to me that you're advising people to something that you yourself aren't actually doing, at all, and isn't really consistent with what you're advising.

I advise no maxing out 401k, investing, buying a home, and keeping 6,000. It's very consistent. Just when I distribute the 6k might be what is throwing you off.

Why would you propose not investing in a 401k in order to sit on excess liquid cash while the amount of interest you owe on your student loans increases?

Investing in a 401k will prolong big law another 6.5 months so I guess that is not a big deal when I think about it, but personally I think it is grueling so I would not want that most likely. I don't propose 401k because that money is stuck. You cant take it out and I do not believe in borrowing on your 401k. If u have 50k saved and let's say u have 50 k in debt. Then you can just pay it off. But you can't do that if it's in a 401(k). And it's really investing the max that is my problem with the 401k. If you invested say your bonus, I am fine with that.

[nixy]

But wouldn't the bonus for most biglaw jobs come very close to or (once you're a third year) exceed your max contribution to your 401k? So maxing out your 401k would basically mean investing your bonus?

[sparty99]

But wouldn't the bonus for most biglaw jobs come very close to or (once you're a third year) exceed your max contribution to your 401k? So maxing out your 401k would basically mean investing your bonus?

No, because not every firm gives max bonus. My firm is like 15k. Nor is it guaranteed.

[nixy]

But wouldn't the bonus for most biglaw jobs come very close to or (once you're a third year) exceed your max contribution to your 401k? So maxing out your 401k would basically mean investing your bonus?

No, because not every firm gives max bonus. My firm is like 15k. Nor is it guaranteed.

1) which is why I said “most” and “very close to,” and
2) the max for a 401k (this year at least) is $19k. You really think there’s a significant difference for someone’s ability to pay off loans if they invest the additional $4k?

[sparty99]

But wouldn't the bonus for most biglaw jobs come very close to or (once you're a third year) exceed your max contribution to your 401k? So maxing out your 401k would basically mean investing your bonus?

No, because not every firm gives max bonus. My firm is like 15k. Nor is it guaranteed.

1) which is why I said “most” and “very close to,” and
2) the max for a 401k (this year at least) is $19k. You really think there’s a significant difference for someone’s ability to pay off loans if they invest the additional $4k?

I am not sure you can say most. Big law is many firms. Still, people are not always getting the bonus. You should work as if you do not expect it.

[Basile]

I have about 90 to 100K in student loan debt, which stem from multiple failed graduate school attempts (thanks to my undergraduate college screwing me over and leading to years of career trauma). It took a while for me to realize that the law is where I should be at this later stage of my life, mostly because I'm at that point where I have to either work with and for the law, or against it. I'm choosing to work with and for it, a sensible decision to most people I would assume.

In any case, being unemployed right now, my student loan payments are sitting at a beautiful $0/month. I only have federal student loans, thankfully. These are the best kinds to have due to the excellent repayment plans, and the $0/month payments count towards debt forgiveness after 20 or so years of making monthly payments. I also love federal loans because if you get a non-profit or government/state job, you can do the public service loan forgiveness program to wipe out all remaining debt after 10 years of monthly payments. Pretty sweet deal, I'd say. This is why I am not afraid of taking out as much student loans as I need for my future law school endeavors.

[The Lsat Airbender]

I have about 90 to 100K in student loan debt, which stem from multiple failed graduate school attempts (thanks to my undergraduate college screwing me over and leading to years of career trauma).

lol this guy again

[nixy]

I have about 90 to 100K in student loan debt, which stem from multiple failed graduate school attempts (thanks to my undergraduate college screwing me over and leading to years of career trauma).

lol this guy again

[sparty99]

I have about 90 to 100K in student loan debt, which stem from multiple failed graduate school attempts (thanks to my undergraduate college screwing me over and leading to years of career trauma). It took a while for me to realize that the law is where I should be at this later stage of my life, mostly because I'm at that point where I have to either work with and for the law, or against it. I'm choosing to work with and for it, a sensible decision to most people I would assume.

In any case, being unemployed right now, my student loan payments are sitting at a beautiful $0/month. I only have federal student loans, thankfully. These are the best kinds to have due to the excellent repayment plans, and the $0/month payments count towards debt forgiveness after 20 or so years of making monthly payments. I also love federal loans because if you get a non-profit or government/state job, you can do the public service loan forgiveness program to wipe out all remaining debt after 10 years of monthly payments. Pretty sweet deal, I'd say. This is why I am not afraid of taking out as much student loans as I need for my future law school endeavors.

Is this a real post? You are in trouble. My debt increased by 20k in the first few years because I did not have a game plan and simply made those PAYE/REPAYE payments because I had other debt. You better land big law fast.

[Basile]

No, I don't have to land "big law", and I am nowhere near "in trouble." A non-profit or government job will take care of that. Like age, debt is just a number. Being single with no kids, having zero credit card debt with fantastic credit score, as well as expertly managing personal finances with thrift and frugality, really helps. I can be 500K in student loan debt, and my debt would seem like a walk in the park compared to 150K in loan debt from somebody else with other debt on top of it (especially somebody with a poor credit score). I'm grateful that I don't have expenses like you most likely do, so there is no "trouble."

[sparty99]

No, I don't have to land "big law", and I am nowhere near "in trouble." A non-profit or government job will take care of that. Like age, debt is just a number. Being single with no kids, having zero credit card debt with fantastic credit score, as well as expertly managing personal finances with thrift and frugality, really helps. I can be 500K in student loan debt, and my debt would seem like a walk in the park compared to 150K in loan debt from somebody else with other debt on top of it (especially somebody with a poor credit score). I'm grateful that I don't have expenses like you most likely do, so there is no "trouble."

You are unemployed and have 100k in debt. It is only going to increase from here. Approximately $400-$800 a month. If you go into government or non-profit, you will be at your job's mercy for 10 years and who even knows if you will get the student loan forgiveness as 99% of the people are rejected. Your FICO score is also irrelevant. If you landed Big Law tomorrow you would be out of debt in 1.5 years (at the latest) as opposed to your current 10 year horrendous plan. You are very much in trouble as it stands now. But this post sounds real fake. Anonymous for no reason.

[Basile]

Whatever happened to you in life, you have my apologies. It doesn't sound like you're in a good situation. You also make sweeping judgments that are totally unfounded, but that tends to happen when you yourself are in a tight spot. Oh well...

As long as I'm making progress, then the debt is more than worth it. You can't have one without the other when it comes to law school (unless mommy and daddy are rich and paying for your education with that silver spoon). FICO score is very relevant, especially when you want to get approved for apartment rentals among other things. And who said that 99% of people are rejected from student loan forgiveness? That's a bunch of hogwash. Any rejection from that means that they are doing something wrong and not keeping on top of things, so only they themselves are to blame. Fortunately, I'm a very punctilious type of person, and you should not be going into law if you're not that type of personality (just my opinion).

By the way, if somebody is technically unemployed for 20 to 25 years (hypothetically, hopefully not realistically) while the monthly payments are $0/month, your debt will be forgiven when those 20 years are up (depending on the repayment plan). Paying $0 a month does indeed count as a monthly payment. And guess what? These $0 monthly payments actually help your credit score!!! And just to show you that you're rather uneducated about saying FICO scores are irrelevant, you actually need a good credit score to get approved for GradPLUS loans, auto loans, etc. From my experiences, they don't take your student loan debt into consideration at all when considering renting an apartment out or other things. Please get an education on this. Thanks.

[sparty99]

Whatever happened to you in life, you have my apologies. It doesn't sound like you're in a good situation. You also make sweeping judgments that are totally unfounded, but that tends to happen when you yourself are in a tight spot. Oh well...

As long as I'm making progress, then the debt is more than worth it. You can't have one without the other when it comes to law school (unless mommy and daddy are rich and paying for your education with that silver spoon). FICO score is very relevant, especially when you want to get approved for apartment rentals among other things. And who said that 99% of people are rejected from student loan forgiveness? That's a bunch of hogwash. Any rejection from that means that they are doing something wrong and not keeping on top of things, so only they themselves are to blame. Fortunately, I'm a very punctilious type of person, and you should not be going into law if you're not that type of personality (just my opinion).

By the way, if somebody is technically unemployed for 20 to 25 years (hypothetically, hopefully not realistically) while the monthly payments are $0/month, your debt will be forgiven when those 20 years are up (depending on the repayment plan). Paying $0 a month does indeed count as a monthly payment. And guess what? These $0 monthly payments actually help your credit score!!! And just to show you that you're rather uneducated about saying FICO scores are irrelevant, you actually need a good credit score to get approved for GradPLUS loans, auto loans, etc. From my experiences, they don't take your student loan debt into consideration at all when considering renting an apartment out or other things. Please get an education on this. Thanks.

Nevermind. I will not respond to this fake trolling post. This person needs to be outed and banned.