Student Loans: Payment Options and Numbers

User avatar
LoganCouture
Posts: 95
Joined: Fri Jan 26, 2018 2:42 pm

Re: Student Loans: Payment Options and Numbers

Post by LoganCouture » Sat Nov 17, 2018 11:34 am

Does First Republic still have the best interest rates? Someone from FRB mafia please PM me their referral link. I have gotten a lot of helpful advice from lurking these threads over the years and I might finally be ready to refi.

User avatar
JenDarby
Moderator
Posts: 4861
Joined: Thu Jan 25, 2018 4:00 pm

Re: Student Loans: Payment Options and Numbers

Post by JenDarby » Sat Nov 17, 2018 11:42 am

LoganCouture wrote:
Sat Nov 17, 2018 11:34 am
Does First Republic still have the best interest rates? Someone from FRB mafia please PM me their referral link. I have gotten a lot of helpful advice from lurking these threads over the years and I might finally be ready to refi.
yes, and PMed

User avatar
LoganCouture
Posts: 95
Joined: Fri Jan 26, 2018 2:42 pm

Re: Student Loans: Payment Options and Numbers

Post by LoganCouture » Sat Nov 17, 2018 11:52 am

JenDarby wrote:
Sat Nov 17, 2018 11:42 am
LoganCouture wrote:
Sat Nov 17, 2018 11:34 am
Does First Republic still have the best interest rates? Someone from FRB mafia please PM me their referral link. I have gotten a lot of helpful advice from lurking these threads over the years and I might finally be ready to refi.
yes, and PMed
Thanks!

User avatar
Kümmel
Posts: 596
Joined: Thu Jan 25, 2018 9:07 pm

Re: Student Loans: Payment Options and Numbers

Post by Kümmel » Tue Nov 27, 2018 2:53 pm

Okay dumb question. I have nelnet and am paying in excess of my monthly payment. I want to put any additional amount towards the principal. nelnet seems to be telling me they do that automatically, but is that true?

for example:

100k in principal
3k accrued interest
monthly payment is $500

I pay $2000 this month. Nelnet told me they put all $2000 towards the accrued interest and until that's paid off then they put the remainder towards the principal. Is that right? I can't do the $500 towards the accrued interest and then the excess payment towards principal?

User avatar
Danger Zone
From Wentz, Nick Came
Posts: 1669
Joined: Thu Jan 25, 2018 2:34 pm

Re: Student Loans: Payment Options and Numbers

Post by Danger Zone » Tue Nov 27, 2018 4:25 pm

I'm not sure about Nelnet specifically but that's standard practice with the servicers I've used.

User avatar
JenDarby
Moderator
Posts: 4861
Joined: Thu Jan 25, 2018 4:00 pm

Re: Student Loans: Payment Options and Numbers

Post by JenDarby » Tue Nov 27, 2018 4:30 pm

Danger Zone wrote:
Tue Nov 27, 2018 4:25 pm
I'm not sure about Nelnet specifically but that's standard practice with the servicers I've used.
that’s always how it was for me as well

but why are you overpaying? I thought you were PAYE/LRAP/PSLF crowd

User avatar
Kümmel
Posts: 596
Joined: Thu Jan 25, 2018 9:07 pm

Re: Student Loans: Payment Options and Numbers

Post by Kümmel » Tue Nov 27, 2018 4:34 pm

Ah okay so there's nothing else I should be doing then?

My LRAP program is unrelated to PSLF. I'm enrolled in PAYE, so my payment is pretty low, but my law school cuts me a check to make the payments as if I'm in a 10-year standard -- so im paying 2k+ above my actual monthly payment

User avatar
JenDarby
Moderator
Posts: 4861
Joined: Thu Jan 25, 2018 4:00 pm

Re: Student Loans: Payment Options and Numbers

Post by JenDarby » Wed Nov 28, 2018 8:43 am

ah right, I forgot that LRAP is (often) based on 10 year repayment despite low PAYE payments

ballinoutacontro
Posts: 147
Joined: Wed Feb 28, 2018 4:32 am

Re: Student Loans: Payment Options and Numbers

Post by ballinoutacontro » Thu Nov 29, 2018 10:06 am

On a different topic than PSLF, I just got back my REPAYE recertification. Not bad. Mine is based on full year employment in biglaw (ish) including bonus and everything.... Still comes out wayyy less than my 10 year flat payments are (based on what they revert me to while processing my recertification every year). I have a couple side hustles that reduce my AGI a bit, and I'm pretty savvy on tax avoidance, which I suppose may help a little bit. My LS debt is around $140k or so. Haven't moved that needle much at all since graduating. And haven't really tried to.

I've considered refinancing, but doesn't really seem worth it to me. My weighted average of my 10 law school loans is right about 6%. What could I even re-fi to these days with all the recent Fed rate hikes?

If I cut my interest rate down 1%, that's a savings of like $1500 per year. Certainly not nothing, but not that much either...

Considering that I fantasize pretty much every single day about transitioning into entrepreneurship, in which case I may very well have my payments drop to just about $0, I just really haven't been motivated to do it.

If I could lower my interest rate by like 3% or something, that might start to become worth it maybe... but that's not likely these days right? I also don't like in a state that Darien Rowaway Bank (or wtv the fuk it is that everyone on here on TLS always says has the best rates) services, last I checked.

User avatar
Danger Zone
From Wentz, Nick Came
Posts: 1669
Joined: Thu Jan 25, 2018 2:34 pm

Re: Student Loans: Payment Options and Numbers

Post by Danger Zone » Thu Nov 29, 2018 1:44 pm

Ahem FRB* could get you down to under 3% but not if you don't live in the right area.

Realistically you'd be looking at like 4.5-5% with the other banks (Darien Rowayton, SoFi, etc.) so up to you whether that's worth it or not for losing the protections of federal student loans.

User avatar
JenDarby
Moderator
Posts: 4861
Joined: Thu Jan 25, 2018 4:00 pm

Re: Student Loans: Payment Options and Numbers

Post by JenDarby » Thu Nov 29, 2018 1:47 pm

I’m down to 97k from 194k and it’s looking more and more like I’m going to hit that FRB rebate by paying them off before February 2021 (I’ve paid 39k in the last 12 months lol)

paying my loans down is apparently my drug of choice. the high only lasts a minute, the costs are excessive, it’s possibly a net negative on my lifestyle. only ppl who also do it get it and others that live a payment free lifestyle like johann judge me

DOT
Posts: 4624
Joined: Mon Jan 29, 2018 10:26 am

Re: Student Loans: Payment Options and Numbers

Post by DOT » Thu Nov 29, 2018 4:45 pm

JenDarby wrote:
Thu Nov 29, 2018 1:47 pm
I’m down to 97k from 194k and it’s looking more and more like I’m going to hit that FRB rebate by paying them off before February 2021 (I’ve paid 39k in the last 12 months lol)

paying my loans down is apparently my drug of choice. the high only lasts a minute, the costs are excessive, it’s possibly a net negative on my lifestyle. only ppl who also do it get it and others that live a payment free lifestyle like johann judge me
Hey that’s a pretty good drug of choice. Mines cost me a fortune pls coach me

User avatar
Johannes
Posts: 3576
Joined: Thu Jan 25, 2018 6:43 pm

Re: Student Loans: Payment Options and Numbers

Post by Johannes » Fri Nov 30, 2018 8:12 pm

ballinoutacontro wrote:
Thu Nov 29, 2018 10:06 am
On a different topic than PSLF, I just got back my REPAYE recertification. Not bad. Mine is based on full year employment in biglaw (ish) including bonus and everything.... Still comes out wayyy less than my 10 year flat payments are (based on what they revert me to while processing my recertification every year). I have a couple side hustles that reduce my AGI a bit, and I'm pretty savvy on tax avoidance, which I suppose may help a little bit. My LS debt is around $140k or so. Haven't moved that needle much at all since graduating. And haven't really tried to.

I've considered refinancing, but doesn't really seem worth it to me. My weighted average of my 10 law school loans is right about 6%. What could I even re-fi to these days with all the recent Fed rate hikes?

If I cut my interest rate down 1%, that's a savings of like $1500 per year. Certainly not nothing, but not that much either...

Considering that I fantasize pretty much every single day about transitioning into entrepreneurship, in which case I may very well have my payments drop to just about $0, I just really haven't been motivated to do it.

If I could lower my interest rate by like 3% or something, that might start to become worth it maybe... but that's not likely these days right? I also don't like in a state that Darien Rowaway Bank (or wtv the fuk it is that everyone on here on TLS always says has the best rates) services, last I checked.
I would never pay my loans before absolutely necessary if I was considering entrepreneurship. One particular reason is that the loan forgiveness tax bomb is pegged to your total liabilities so if you have outstanding business debt in a partnership that should all flow through and count to minimize your tax bomb.


User avatar
AOT
Posts: 576
Joined: Fri Jan 26, 2018 10:56 am

Re: Student Loans: Payment Options and Numbers

Post by AOT » Sat Dec 01, 2018 2:35 am

Cross-posting from the Lounge:

i've possibly got some financial decisions to make and would appreciate your advice.

Basically, because I worked for a law firm my 2L summer, I'm only like 80% covered by LRAP. I'll still have payments of around $330/month. I *might* be able to get round this by paying $20,000 into my loans, like, now. Luckily my fellowship pays the standard post law school $40,000, and I'll definitely be able to live on half of that this year, so I (incredibly) actually have $20,000 just hanging out in my bank account.

There's a slight possibility that I wont be able to do this. I'm not sure what the final date is on which I can pay to reduce my original loan amount. I just found out that my funds came through, and now it's the weekend so I can't talk to financial aid. I want to think about plan B's so I don't just sit around anxiously until Monday.

So plan B is...invest the $20,000, and try to use that for my loan payments for as long as it lasts. There's basically no way I'll be able to afford 330/month otherwise in the coming years. How do I start thinking about investing? Is this a stupid idea?

Other info: I'll be in the UK, (but the money is actually in dollars atm, in a UK currency account). I am a US citizen and these are all federal loans (Grad Plus and Stafford)


Someone suggested I go on PAYE, but I'm not sure that'll work for me because of LRAP? I think I have to be on the standard 10 year payment plan. my *actual* monthly payments are like 1600 or something, but LRP pays for 80% (or 95% if I put the $20,000 back into my loans)

riot
Posts: 1197
Joined: Thu Jan 25, 2018 6:36 pm

Re: Student Loans: Payment Options and Numbers

Post by riot » Sat Dec 01, 2018 6:54 am

What is the monthly payment if you put the 20k back in?

User avatar
AOT
Posts: 576
Joined: Fri Jan 26, 2018 10:56 am

Re: Student Loans: Payment Options and Numbers

Post by AOT » Sat Dec 01, 2018 7:06 am

riot wrote:
Sat Dec 01, 2018 6:54 am
What is the monthly payment if you put the 20k back in?
I think like $100

e: actually a bit less. Like $70. So annoying but definitely manageable
e2: ok and looking through this thread it seems like I can choose between different payment plans? Never seen this as an option before. I’m on standard non-PSLF LRAP

User avatar
Nony
Posts: 3889
Joined: Thu Jan 25, 2018 2:34 pm

Re: Student Loans: Payment Options and Numbers

Post by Nony » Sat Dec 01, 2018 8:48 am

I’m probably missing something, but I don’t get how you will be able to live on $20k and thus have $20k to invest/pay back loans, but can’t simply put the $20k to paying the $330 each month? (Since that would only be $4000.) I guess this is your “invest the $20k and use that to pay,” which makes more sense to me than paying down the loans now, because you get to keep the money and thus have a little more flexibility.

But also unless it’s a requirement of your LRAP, yes, get on an income-based plan. I know there are others here who are doing LRAP and get the 10-year payment amount but are on PAYE and just overpay the required payment each month by paying what they receive, not what they owe. I think most are on PSLF, so have a different incentive than you, but I don’t see why you couldn’t do this. Then your required payments would be lower. The trade off, it sounds like, would be not quite paying off your balance in 10 years (since your LRAP is 80%).

That said, you can also change plans pretty much at will (there’s some bureaucracy and it can be slow, but you’re allowed to at any time), so you could get on an income-based plan later if/when your income goes down. I’d still do it now, but it’s always there as a backup.

Also, you’re clearly on a fellowship now (probably in a high COL place), but what are your goals for after? That would presumably affect your money plans (which duh I know you know, but I’m just wondering).

User avatar
presh
Posts: 1760
Joined: Tue Jan 30, 2018 11:13 pm

Re: Student Loans: Payment Options and Numbers

Post by presh » Sat Dec 01, 2018 10:55 am

I’m with Nony. The math here doesn’t make sense to me. At $330 per month, even with no ROI, the 20k would last you 5 years of payments. Are you not anticipating your situation will change at all in five years?

Also, I would be extremely wary of assuming you can live off 20k. Maybe you are very frugal and can make it work for regular expenses (which is great), but what if an unexpected emergency arises?

User avatar
AOT
Posts: 576
Joined: Fri Jan 26, 2018 10:56 am

Re: Student Loans: Payment Options and Numbers

Post by AOT » Sat Dec 01, 2018 11:46 am

Thanks a lot presh and nony.

Sorry if I'm a bit slow on the uptake with some of this. I partly blame my school for their awful financial advise but I'm also historically bad at this stuff.

Ok, so Nony when you say it would only be 4000, you mean per year? That's true, but like presh said that would only last me 5 years. Just paying the money off now and only having to deal with the $70 or so a month seemed like the less stressful option, esp bc it would lower the amount I borrowed in case I do fall out of LRAP for any reason. $330 a month just seems like frightening amount of money. I have never had a spare $330 a month!

I'm planning on starting a PhD in the UK next year, and would also be working as a consultant for a legal NGO in Nigeria mainly to stay eligible for LRAP during the 3 years of the PhD. If funding for the PhD doesn't work out this year, I'd probably either stay in Sudan for another year or move to Nigeria for a year, and then apply to PhDs in the US starting the year after. In any of those cases my pay is going to be super low for the next 3 or 4 years at least (local Nigerian consultants fees basically). It'll probably still be v low after.

Thanks for the advice about PAYE. I'll check to see if this is an option for me. When I spoke to financial aid they basically said that paying the $20,000 back in was my best option, and never mentioned any other payment plans :/.

Re living on $20,000 for the year. I definitely can! That was calculated to give me at least $3000 for emergency expenses. Cost of living is really cheap here

User avatar
Nony
Posts: 3889
Joined: Thu Jan 25, 2018 2:34 pm

Re: Student Loans: Payment Options and Numbers

Post by Nony » Sat Dec 01, 2018 1:21 pm

This probably sounds snotty and it's not meant that way, but $330 is a really low loan payment around here, so that may be some of what's behind my confusion - my first clerkship out of law school paid about $55k, and my payment was about $500-600, and it really wasn't a hardship to pay at all (and that was here in the US). I guess I also find it hard to think that you won't be able to make at least $40k five years from now - but again, if you don't, you can apply for PAYE at that point, too, because you can change plans at any time. Your school probably has reasons for how they want their LRAP money dealt with, but if you fall out of LRAP, that's what the income-based plans are for (wrt to not starving, at least - paying off the loans altogether is another story, but that's also what forgiveness is for, if your income stays genuinely low for a long time).

Also, doesn't entering a PhD program toll your loans? You won't have to pay while you're a student, which will give you some time to save money and cover future payments.

User avatar
AOT
Posts: 576
Joined: Fri Jan 26, 2018 10:56 am

Re: Student Loans: Payment Options and Numbers

Post by AOT » Sat Dec 01, 2018 2:11 pm

Thanks again Nony.

Maybe I’m freaking out irrationally because I’m constantly reading about how dire academic job prospects are. I’m terrified about being stuck in a terrible adjunct contract with no way to pay off my debts. I have no idea what to expect though really, or how anything works.

That all makes a lot of sense though, and makes me feel a lot better. I didn’t really understand that I would be able to sign up for the income based plan. I’ll do that.

User avatar
Nony
Posts: 3889
Joined: Thu Jan 25, 2018 2:34 pm

Re: Student Loans: Payment Options and Numbers

Post by Nony » Sat Dec 01, 2018 3:54 pm

Academic job prospects are terrible, but I feel like just based on the the little I know/guess about you, you're going to be a good candidate (like given that you are actually working in Africa now and are going to continue to do so, you will have so much better experience than so many of the academic wannabes out there. Also obviously it varies by actual discipline, but there aren't a lot of Africanists floating around the U.S., so it's not going to be as glutted a field).

User avatar
AOT
Posts: 576
Joined: Fri Jan 26, 2018 10:56 am

Re: Student Loans: Payment Options and Numbers

Post by AOT » Sun Dec 02, 2018 8:44 am

Nony wrote:
Sat Dec 01, 2018 3:54 pm
Academic job prospects are terrible, but I feel like just based on the the little I know/guess about you, you're going to be a good candidate (like given that you are actually working in Africa now and are going to continue to do so, you will have so much better experience than so many of the academic wannabes out there. Also obviously it varies by actual discipline, but there aren't a lot of Africanists floating around the U.S., so it's not going to be as glutted a field).
<3 thanks Nony. Crossing my fingers and toes that this all works out

User avatar
Johannes
Posts: 3576
Joined: Thu Jan 25, 2018 6:43 pm

Re: Student Loans: Payment Options and Numbers

Post by Johannes » Mon Dec 03, 2018 1:06 am

AOT -

My plan A (as discussed above) would be the same: be on PAYE and put the excess covered by your LRAP to your loans. Based on the income exemption worldtraveler mentioned, your PAYE should be 0 for all time you’re abroad and under the 100k+ threshold.

However, if that plan is not an option, I would keep the 20k invested and make the monthly extra payments. Once you make the 20k commitment to loans, you’re never seeing that money again. Thus, I’d avoid that’s outcome as long as I could.

I think there will be other loan repayment options for you also since these are US loans and you will be abroad for a what looks like at least the next 5 years.

I would also take everything your financial advisor at your program says witha grain of salt because none of them are that thoroughly knowledgeable but rather just help navigate the standard paperwork.

Post Reply

Who is online

Users browsing this forum: No registered users and 4 guests