Veil of Ignorance wrote: Nebby wrote:
In California, your take home pay on $100k would be $68,015/year (before any deductions/credits/adjustments).
For SLS, your adjusted gross income is whatever it was on the previous year's tax returns.
Federal tax brackets:
$37,450 - $90,750 25.00%
$90,750 - $189,300 28.00%
$40,773 - $51,530 8.00%
$51,530 - $263,222 9.30%
I'm sorry for belabouring the point, but just to put my initial question to rest: when you add up the marginal federal (25%), State (9.3%) and FICA (7.65%) taxes at/above $80k in San Francisco, California, you arrive at 41.95%. Given that 60% of yearly income above $80k is subtracted from Stanford's LRAP payment, it seems like moving from an $80k/year job to a $100k/year job wouldn't actually increase your take-home pay (gross - taxes - loan repayment), in San Francisco. It looks like it would actually slightly decrease it.
Think of your question in a different way.
All assumptions based on the 300k debt in the prior hypothetical.
Cali take home pay on 100k is $68,015/year and 80k is $56,405/year.
SLS LRAP pays out $18,150/year on 100k salary and $28,350 on 80k salary (39600 - 2250 - (0.5 x 15k)).
If you think of the SLS LRAP benefit as an addition to salary (which as I explain below is an incorrect way to categorize it), then your total "take home" on a 100k salary is $86,165 (68015+18150) and on 80k salary is $84,755. 100k salary "take home" is a tad higher than 80k.
However, LRAP benefits should not be thought of as take home income, since they can be used exclusively on paying down loans.
If the person with 300k does what I recommend, which is get on PAYE, then the LRAP benefit will more than cover their required payment up to a salary of $120k, and therefore the $100k and $80k person will not be paying anything out of pocket in loans. Therefore, the $100k person is still taking home ~$11,700 more a year than the $80k person.