How to temporarily minimize student loan payments (as a clerk)? Forum
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Anonymous posting is only appropriate when you are sharing sensitive information about clerkship applications and clerkship hiring. You may anonymously respond on topic to these threads. Unacceptable uses include: harassing another user, joking around, testing the feature, or other things that are more appropriate in the lounge.
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Anonymous User
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How to temporarily minimize student loan payments (as a clerk)?
Current clerk with another clerkship for 2022-2023 lined up. With the expiration of zero interest/no monthly payment coming up at the end of next month, I’ve been thinking about repayment options. Basically, I want to minimize my monthly payment until after my clerkships end and then start paying down my remaining loans in earnest. Generally speaking, what are the best options? I’m only interested in options that will give me flexibility down the line. Also, I’ve been out of law school for over three years and haven’t refinanced.
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nixy
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Re: How to temporarily minimize student loan payments (as a clerk)?
Income based repayment is pretty much your only option. It won’t touch the principal and your balance won’t go down, but one more year shouldn’t be too terrible.
If you’re married and not in a community property state, depending on the payment plan, if you file taxes as married but filing singly, it will only count your income for the IBR payment, so the payment will be lower. But that usually increases your spouse’s taxes so not sure how much difference it makes. (Also not sure that all repayment plans allow this - there are differences between PAYE and REPAYE. And it’s moot if you’re single.)
If/when your income goes up with the second clerkship, don’t certify your income based on pay stubs; stick to the previous year’s tax return to keep your income down. (If your previous years tax return included some biglaw employment you probably want to do the opposite and certify income based on your clerkship pay.)
But there isn’t much you can do really beyond that. That’s the problem with student loan payments.
If you’re married and not in a community property state, depending on the payment plan, if you file taxes as married but filing singly, it will only count your income for the IBR payment, so the payment will be lower. But that usually increases your spouse’s taxes so not sure how much difference it makes. (Also not sure that all repayment plans allow this - there are differences between PAYE and REPAYE. And it’s moot if you’re single.)
If/when your income goes up with the second clerkship, don’t certify your income based on pay stubs; stick to the previous year’s tax return to keep your income down. (If your previous years tax return included some biglaw employment you probably want to do the opposite and certify income based on your clerkship pay.)
But there isn’t much you can do really beyond that. That’s the problem with student loan payments.
