Yeah, it is pretty scary. I think it is worth remembering that we can get IBR on consolidated federal loans (which will drop your overall interest rate a little bit). I checked out the IBR calculator:traehekat wrote:Just sent in my deposit. I wish the previous sentence could be followed an exclamation mark instead of a period, but I've also deposited at Wake Forest and will be visiting there Friday and Saturday. Right now, Iowa looks like the backup plan, in case I absolutely hate WFU.
But you know, a really, really good looking backup plan.
OH. Almost forgot. I don't know how many of you have looked at the actual numbers regarding law school financing, but it is shocking, especially for those looking at paying sticker. I went to http://www.accessgroup.org and played with one of the calculators... here are my results.
If you are paying sticker at Iowa, 1 year of nonresident tuition and 1 year of resident tuition, assuming about $15,000 in COL each year, and accounting for some tuition increases, you will be borrowing around $140,000, $8,500 of which will be subsidized with an interest rate at 6.8%. $12,000 will be unsubsidized, but also at an interest rate of 6.8%. The rest will be PLUS loans at 8.5%. Unfortunately, they just have a subsidized and unsubsidized calculator, so I am just taking that $12,000 in Stafford loans and putting it at 8.5%. The difference shouldn't be too much. So we put $8,500 in subsidized loans at 6.8% over 10 years, and $131,500 in unsubsidized loans at 8.5%, over lets say... 25 years...
You will be paying a monthly payment of $1,314 for ten years, $1,216 for the remaining 15 years.
The total payment (principal + interest) over the life of the loan will be $376,292.
The total interest paid over the life of the loan will be $236,652.
Of course, the amount of interest paid over the life of the loan shrinks as the life of the loan shrinks. I have heard of some people using their large salaries and leaving pretty modestly for a few years after school in order to put a huge dent in debt. I think the above scenario is a bit more typical, though.
Anyway, those are some large numbers.
Assuming you have 140K in debt after three years, with an interest rate of 8%, make 75,000/year, have no kids, are not married, and do not live in Alaska or Hawaii, you'd pay $730 per month. If you worked in PI, the remaining debt would be forgiven in ten years.
Better, but still scary.
