Too much Debt? Forum

[bigmnstyle]

Tier 3 school with 120 k of debt.... way to much? Very interested in a legal education and becoming an attorney but JESUS. 40 k a year to go to school in Los Angeles

[dominkay]

Yes.

[1Levening2013]

ever think about going p/t and working?

[legalease9]

Thats a lot of debt. Its really a personal choice whether being an attorney is worth that to you. Just know that from a T3 you will struggle to pay that off. But there is IBR etc.

BTW have you included Cost of Living into your debt total. Very important to do that to know true cost.

[mec30]

Just keep in mind that at around 150k worth of LS debt is about 20K out of your paycheck per year for 10 years. If you get a job that pays 70k that’s you effectively making 50k before taxes.

There are ways to finance your education so that you pay increasingly more as time goes on. It would, in a way, track your pay increase as you get promoted or make more money.

[bigmnstyle]

Thanks for all the advice guys.

- I calculated as much cost of living as I can but imagine it will be higher than what I even expect so I was thinking it could be up to 140 K. Rent is very minimal due to help from family. Tuition is all on my though. I was thinking about selling my car and getting a sportsbike to save some money. I have thought of public interest law and figured that may be a way to go. If you only are getting 50 k a year from a government job, loan repayment will be adjusted accordingly? After 10 years do you think you could wipe out a third of your law school debt if you made the minimum payments? I am guessing I should talk to financial aid about this.

- I have thought about going part time...If I can get a decent job that may be a good decision for me.

[mec30]

Most schools have some kind of loan repayment assistance program if you do public interest or government work. The government, specifically, also has a loan repayment assist program if you take out federal loans and eventually work for the government.

[dominkay]

Most schools have some kind of loan repayment assistance program if you do public interest or government work.

I don't know that this is true. I know that TOP schools often have a LRAP, but most?

[GettingReady2010]

Most schools have some kind of loan repayment assistance program if you do public interest or government work.

I don't know that this is true. I know that TOP schools often have a LRAP, but most?

IBR>>>>>>>>>LRAP

[dominkay]

Most schools have some kind of loan repayment assistance program if you do public interest or government work.

I don't know that this is true. I know that TOP schools often have a LRAP, but most?

IBR>>>>>>>>>LRAP

IBR + LRAP =

[GettingReady2010]

Most schools have some kind of loan repayment assistance program if you do public interest or government work.

I don't know that this is true. I know that TOP schools often have a LRAP, but most?

IBR>>>>>>>>>LRAP

IBR + LRAP =

You can take advantage of both simultaneously?

[dominkay]

IBR + LRAP =

You can take advantage of both simultaneously?

Yep. I was just reading about UVA's new LRAP a few days ago, where they actually make your IBR payments if you make under $55k.

[D. H2Oman]

25 years is an awful long time to be paying 15% of your income. Also, you get hit with a nice tax bill at the end of it. So, just be aware of that.

[GettingReady2010]

IBR + LRAP =

You can take advantage of both simultaneously?

Yep. I was just reading about UVA's new LRAP a few days ago, where they actually make your IBR payments if you make under $55k.

That is awesome. I wish other schools would follow suit.

[GettingReady2010]

25 years is an awful long time to be paying 15% of your income. Also, you get hit with a nice tax bill at the end of it. So, just be aware of that.

Yeah, I heard about that. Can you explain this a little further?

[D. H2Oman]

25 years is an awful long time to be paying 15% of your income. Also, you get hit with a nice tax bill at the end of it. So, just be aware of that.

Yeah, I heard about that. Can you explain this a little further?

I'm not really 100% up on this, so someone might have to correct me. But, I believe as it stands right now, the amount that is forgiven after 25 years is treated as taxable income. So, basically if you take out 180K, and end up in like a 60K a year job. You'll barely be covering interest on your debt with your 15% of income payments. I think that means you're going to owe something like a $40,000 tax bill at the end of 25 years. Could the government change that? Who knows, but I wouldn't assume that with as big of deficits that we are already running as a country, that programs like this will be expanded. So, obviously IBR is better than nothing, but it doesn't mean that you can borrow recklessly.

[Thomas Jefferson]

25 years is an awful long time to be paying 15% of your income. Also, you get hit with a nice tax bill at the end of it. So, just be aware of that.

Yeah, I heard about that. Can you explain this a little further?

I'm not really 100% up on this, so someone might have to correct me. But, I believe as it stands right now, the amount that is forgiven after 25 years is treated as taxable income. So, basically if you take out 180K, and end up in like a 60K a year job. You'll barely be covering interest on your debt with your 15% of income payments. I think that means you're going to owe something like a $40,000 tax bill at the end of 25 years. Could the government change that? Who knows, but I wouldn't assume that with as big of deficits that we are already running as a country, that programs like this will be expanded. So, obviously IBR is better than nothing, but it doesn't mean that you can borrow recklessly.

This is correct. The 10 year public service forgiveness is not taxed, however.

[GettingReady2010]

25 years is an awful long time to be paying 15% of your income. Also, you get hit with a nice tax bill at the end of it. So, just be aware of that.

Yeah, I heard about that. Can you explain this a little further?

I'm not really 100% up on this, so someone might have to correct me. But, I believe as it stands right now, the amount that is forgiven after 25 years is treated as taxable income. So, basically if you take out 180K, and end up in like a 60K a year job. You'll barely be covering interest on your debt with your 15% of income payments. I think that means you're going to owe something like a $40,000 tax bill at the end of 25 years. Could the government change that? Who knows, but I wouldn't assume that with as big of deficits that we are already running as a country, that programs like this will be expanded. So, obviously IBR is better than nothing, but it doesn't mean that you can borrow recklessly.

This is correct. The 10 year public service forgiveness is not taxed, however.

Huh? Why would IBR tax only the 25 yr. private sector forgiveness but not the 10 yr. public?

[D. H2Oman]

Huh? Why would IBR tax only the 25 yr. private sector forgiveness but not the 10 yr. public?

Democratic politicians find public interest work more admirable.

[Thomas Jefferson]

Huh? Why would IBR tax only the 25 yr. private sector forgiveness but not the 10 yr. public?

The same reason public service loans are forgiven 15 years earlier. (see above)

[bigmnstyle]

So if you go to work for a public interest job after 10 years the remaining total student debt you have is completely forgiven, correct? I have heard this but wasn't to sure on how it worked. Any site suggestions to find out more about this or could anyone go more into debt with what this entails?

[Oban]

25 years is an awful long time to be paying 15% of your income. Also, you get hit with a nice tax bill at the end of it. So, just be aware of that.

And then when you get taxed, so pay it off in a payment plan. So basically if you have it for given in 25 years, and have to pay 40k in taxes, you just strecth out the tax if it were a loan and keep paying.

[beach_terror]

You can also just pay down as much as you can at a time, instead of just meeting the loan repayment minimums. I live right outside a decent sized legal market, so I'm moving back home after and putting 90%+ of my income back into paying off loans, hopefully breaking even after 3 years. (130k total, assuming 50-60k a year). If this is an option for you, seriously consider it.

[bigmnstyle]

If you have it forgiven in 10 years through public interest work, do you have to pay taxes on it at the end like private sector?

[Thomas Jefferson]

If you have it forgiven in 10 years through public interest work, do you have to pay taxes on it at the end like private sector?

No. See http://www.ibrinfo.org/faq.vp.html#_Will_forgiven_loan