Student loan payments: get advice and actual numbers here Forum

[pumpkinmann]

Same as above, refinanced about 3 months after starting recently, barely made it in before the interest rate hike. Their key concern seemed to be liquidity (needed around 10% of the loan amount), although they did wait until I had heard about the bar. $250k is a lot of debt, but totally manageable on a 2.95% 10 year term. I'm not even go to try and pay it off early now. I'd definitely recommend first republic for those that it is an option for. Happy to answer any other questions.

So, if my debt will be $150, I only need around $15k in cash to refi with first republic? Does it consider cash/stocks in IRA accounts and 401ks as liquid?

It probably does depend on the agent and your specific situation how much they require. They only count liquid accounts, so personal brokerage holdings and individual stocks work, but anything tied up in IRA or 401k don't. At least that's what I was told.

[JenDarby]

Same as above, refinanced about 3 months after starting recently, barely made it in before the interest rate hike. Their key concern seemed to be liquidity (needed around 10% of the loan amount), although they did wait until I had heard about the bar. $250k is a lot of debt, but totally manageable on a 2.95% 10 year term. I'm not even go to try and pay it off early now. I'd definitely recommend first republic for those that it is an option for. Happy to answer any other questions.

So, if my debt will be $150, I only need around $15k in cash to refi with first republic? Does it consider cash/stocks in IRA accounts and 401ks as liquid?

It probably does depend on the agent and your specific situation how much they require. They only count liquid accounts, so personal brokerage holdings and individual stocks work, but anything tied up in IRA or 401k don't. At least that's what I was told.

Yep, also my banker said they look for 15% of your loan balance in liquid assets.

The main focus seemed to be debt to income ratio though, and then everything else just built your case.

[Anonymous User]

Profile: 2009 grad (T2 private school), Federal employee (current salary ~ $120K)
Debt balance at graduation (~ $240K):
$182K Federal (IBR) + $7K Perkins + $50K? private (3 loans with 20 yr terms, different variable rates; I think about $10K of this was left from undergrad loan after making payments for 3 yrs and then deferring them thru law school).
Current Balance (~ $214K): $207K Federal (thanks, compound interest!) + $7.5K Private
Payments:
Federal- Based on last year's AGI, my monthly payment is now $1,079.66. Since I'm now at the top of my salary ladder, I don't expect this will change much in the future unless I get a promotion. For perspective, my payment was about $500/month when I started IBR with a salary about $57K.
Private loans - variable rates changed drastically between 3.75% to 8.17%. Total minimum payments between $305 and $400/month. Current monthly payment $120 *.
Perkins - paid off in 7 years, minimum payments of $76.37.

Commentary:
- Apply for IBR/consolidation ASAP and stay on top of your lenders to make sure they timely do their part. Any payments made on your federal loans prior to consolidation do NOT count for PSLF, even though the minimum payments far exceed your IBR calculation!! Before consolidation, my total loan payments were about $2,000/month. I racked up 5 figures worth of credit card debt between bar study and consolidation (which took almost 7 months due to complications) because I couldn't afford standard living expenses on top of my student loans. It took me 6 years to pay off that CC debt.
-I paid extra toward principal to my Perkins and private loans whenever I received work bonuses, cash gifts, or had extra income if I spent less than my monthly budget.
*I'm very lucky that my parents helped me pay about 2/3 of the total private loans over several years. I recently refinanced the remaining $7.5K to a 6 yr loan at 3.75% fixed interest thru Earnest (Note- credit score over 800, SoFi offered similar rates).

[bk1]

Any payments made on your federal loans prior to consolidation do NOT count for PSLF, even though the minimum payments far exceed your IBR calculation!!

They count, they just don't count if you consolidate down the line (so either consolidate ASAP or don't consolidate at all). Generally consolidation is not worth it unless you have a Perkins that you can roll into it (which you did). See https://studentaid.ed.gov/sa/repay-loan ... ible-loans:

You may have received loans under other federal student loan programs, such as the Federal Family Education Loan (FFEL) Program or the Federal Perkins Loan (Perkins Loan) Program. Loans from these programs do not qualify for PSLF, but they may become eligible if you consolidate them into a Direct Consolidation Loan. However, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF.

[Anonymous User]

Any payments made on your federal loans prior to consolidation do NOT count for PSLF, even though the minimum payments far exceed your IBR calculation!!

They count, they just don't count if you consolidate down the line (so either consolidate ASAP or don't consolidate at all). Generally consolidation is not worth it unless you have a Perkins that you can roll into it (which you did). See https://studentaid.ed.gov/sa/repay-loan ... ible-loans:

You may have received loans under other federal student loan programs, such as the Federal Family Education Loan (FFEL) Program or the Federal Perkins Loan (Perkins Loan) Program. Loans from these programs do not qualify for PSLF, but they may become eligible if you consolidate them into a Direct Consolidation Loan. However, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF.

Actually, I didn't consolidate the Perkins loan because there are benefits to Perkins loans that Direct consolidated loans do not have. I consolidated 12 Direct, Stafford, and PLUS loans. Unfortunately, back in 2009, Ed was just beginning to develop regs and guidance for IBR/PSLF so there was a lot of conflicting information floating around. At the time, the prevailing advice was that you *had* to have a consolidated loan in order to get onto IBR (the only PSLF-eligible repayment plan then).

[S.Picquery]

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[Anonymous User]

PLSF-eligible job making $120K+. I have 9 years until forgiveness

Federal Loans ~ $180K
Private Loans (uGrad) ~ $80K - min payment is around $500

Right now I'm on PAYE for the Fed loans. My PAYE amount will rise next year as my income increased by a solid chunk.
Married last year and spouse makes ~$40K. We live in a relatively low COL city, do not own a home yet and do not have kids.

My question is this: I file taxes Married Filing Separately, right? My PAYE amount should raise between $200 and $400, so the tax benefits of MFJ probably do not cancel out adding on another ~$400 to the already increasing amount. Any input from those similarly situated is appreciated.

[bk1]

Any payments made on your federal loans prior to consolidation do NOT count for PSLF, even though the minimum payments far exceed your IBR calculation!!

They count, they just don't count if you consolidate down the line (so either consolidate ASAP or don't consolidate at all). Generally consolidation is not worth it unless you have a Perkins that you can roll into it (which you did). See https://studentaid.ed.gov/sa/repay-loan ... ible-loans:

You may have received loans under other federal student loan programs, such as the Federal Family Education Loan (FFEL) Program or the Federal Perkins Loan (Perkins Loan) Program. Loans from these programs do not qualify for PSLF, but they may become eligible if you consolidate them into a Direct Consolidation Loan. However, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF.

Actually, I didn't consolidate the Perkins loan because there are benefits to Perkins loans that Direct consolidated loans do not have. I consolidated 12 Direct, Stafford, and PLUS loans. Unfortunately, back in 2009, Ed was just beginning to develop regs and guidance for IBR/PSLF so there was a lot of conflicting information floating around. At the time, the prevailing advice was that you *had* to have a consolidated loan in order to get onto IBR (the only PSLF-eligible repayment plan then).

Ah that's fair. I have no idea how things used to be when they first started rolling out IDR plans.

[bk1]

PLSF-eligible job making $120K+. I have 9 years until forgiveness

Federal Loans ~ $180K
Private Loans (uGrad) ~ $80K - min payment is around $500

Right now I'm on PAYE for the Fed loans. My PAYE amount will rise next year as my income increased by a solid chunk.
Married last year and spouse makes ~$40K. We live in a relatively low COL city, do not own a home yet and do not have kids.

My question is this: I file taxes Married Filing Separately, right? My PAYE amount should raise between $200 and $400, so the tax benefits of MFJ probably do not cancel out adding on another ~$400 to the already increasing amount. Any input from those similarly situated is appreciated.

Probably, but I'd use tax software to calculate MFJ vs MFS (should be easy to toggle the switch after you input all your info) and then compare that to the difference in PAYE.

[RaceJudicata]

Maybe stupid question... but how long after graduation do loan payments kick in?

I - fortunately - do not have crippling debt, but making payments during bar study before I start work in Sept/Oct would be a significant challenge.

[bk1]

Maybe stupid question... but how long after graduation do loan payments kick in?

I - fortunately - do not have crippling debt, but making payments during bar study before I start work in Sept/Oct would be a significant challenge.

The grace period depends on the loan, though the exact date sometimes depends on your loan servicer (I'm not entirely sure why re the latter). Grace periods are 6 months for PLUS (if you ask), 6 months for Stafford, and 9 months for Perkins.

[RaceJudicata]

Maybe stupid question... but how long after graduation do loan payments kick in?

I - fortunately - do not have crippling debt, but making payments during bar study before I start work in Sept/Oct would be a significant challenge.

The grace period depends on the loan, though the exact date sometimes depends on your loan servicer (I'm not entirely sure why re the latter). Grace periods are 6 months for PLUS (if you ask), 6 months for Stafford, and 9 months for Perkins.

Awesome, thank you.

[Anonymous User]

My wife is on track for PSLF with PAYE - making around $55k as a teacher.

My salary will be 180k (with around 180k in debt) - will we have to file taxes separately to make sure her payments don't spike since her discretionary income will go up?

[bk1]

My wife is on track for PSLF with PAYE - making around $55k as a teacher.

My salary will be 180k (with around 180k in debt) - will we have to file taxes separately to make sure her payments don't spike since her discretionary income will go up?

Yes, filing separately means that spousal income is not factored into PAYE. See http://www.usnews.com/education/blogs/s ... ment-plans

[ezjojo30]

~$160k Law school debt all federal
$155k income between my wife and I. (Not including annual bonus because unsure of size)

In house counsel gig so long term employment feasibility.

Unsure how to approach repayment. We are planning to buy a house within the next 12-18 months so need to save up a decent down payment. My initial plan is to make the minimum payments for the next year, buy a house, then refi on a 10 year plan.

Thoughts?

[Anonymous User]

$220k debt

I'm currently on REPAYE. I wasn't eligible for PAYE because I have one loan that I took out 30 days before the October 2007 cut-off. My partner has no debt. We'd like to get married in the next year or two, but I'm concerneced with the REPAYE marriage penalty. IBR doesn't have a marriage penalty, but it's 15% discretionary income versus 10% on REPAYE. Is it just a matter of deciding which payment plan puts me at a lower monthly payment?

[Anonymous User]

We'd like to get married in the next year or two, but I'm concerneced with the REPAYE marriage penalty. IBR doesn't have a marriage penalty, but it's 15% discretionary income versus 10% on REPAYE. Is it just a matter of deciding which payment plan puts me at a lower monthly payment?

You can calculate and compare the payment plans here- https://studentloans.gov/myDirectLoan/m ... tor.action

But you should also talk to a tax professional and see if the tax consequences of filing separately versus jointly eats at the difference you'll save between plans.

[Anonymous User]

Unsure how to approach repayment. We are planning to buy a house within the next 12-18 months so need to save up a decent down payment. My initial plan is to make the minimum payments for the next year, buy a house, then refi on a 10 year plan.

Thoughts?

I recently refinanced my private student loans after I bought my place. Your credit score skyrockets after you buy a home, so you should be able to get much better rates for refinancing after that happens. However, you can also refinance private student loans multiple times (wish I'd known that earlier), so it might be worth the small drop in credit score to apply for refinancing now and see if you can significantly drop your minimum payments so you can put more toward the down payment.

[Johann]

$220k debt

I'm currently on REPAYE. I wasn't eligible for PAYE because I have one loan that I took out 30 days before the October 2007 cut-off. My partner has no debt. We'd like to get married in the next year or two, but I'm concerneced with the REPAYE marriage penalty. IBR doesn't have a marriage penalty, but it's 15% discretionary income versus 10% on REPAYE. Is it just a matter of deciding which payment plan puts me at a lower monthly payment?

could get a civil union. i considered that for a while.

[Anonymous User]

$220k debt

I'm currently on REPAYE. I wasn't eligible for PAYE because I have one loan that I took out 30 days before the October 2007 cut-off. My partner has no debt. We'd like to get married in the next year or two, but I'm concerneced with the REPAYE marriage penalty. IBR doesn't have a marriage penalty, but it's 15% discretionary income versus 10% on REPAYE. Is it just a matter of deciding which payment plan puts me at a lower monthly payment?

Can someone explain the "marriage penalty" under IBR/PAYE/REPAYE?

[bk1]

$220k debt

I'm currently on REPAYE. I wasn't eligible for PAYE because I have one loan that I took out 30 days before the October 2007 cut-off. My partner has no debt. We'd like to get married in the next year or two, but I'm concerneced with the REPAYE marriage penalty. IBR doesn't have a marriage penalty, but it's 15% discretionary income versus 10% on REPAYE. Is it just a matter of deciding which payment plan puts me at a lower monthly payment?

Can someone explain the "marriage penalty" under IBR/PAYE/REPAYE?

They factor your spouse's income into your payment if you are married filing jointly for IBR/PAYE. For REPAYE, it counts your spouse's income whether you file jointly or separately. See https://www.usnews.com/education/blogs/ ... ment-plans

[Anonymous User]

For those who have refinanced through First Republic or otherwise, how did your experience compare to the Eagle One plan First Republic advertises. If your firm has a connection with the bank(s) were the requirements different from those advertised?

In the plan they advertise you must have a 750 credit score and have been working in the industry for 24 months. However, it seems many here refinance in their first year so I'm guessing this requirement doesn't extend to the special relationships between firms and banks, correct?

[bk1]

For those who have refinanced through First Republic or otherwise, how did your experience compare to the Eagle One plan First Republic advertises. If your firm has a connection with the bank(s) were the requirements different from those advertised?

In the plan they advertise you must have a 750 credit score and have been working in the industry for 24 months. However, it seems many here refinance in their first year so I'm guessing this requirement doesn't extend to the special relationships between firms and banks, correct?

I don't think their requirements change. It's just that their guidelines tend to be soft rather than hard (e.g., you can make up for lack of experience with higher liquidity) whether your firm has a relationship or not.

[Pokemon]

Tls, I have to complete my repaye renewal application by end of May. My guess is not to hurry and complete it before since my income has increased and completing it now will mean immediate rise to my monthly payments.
Am I correct in that assumption?

[Tiago Splitter]

Tls, I have to complete my repaye renewal application by end of May. My guess is not to hurry and complete it before since my income has increased and completing it now will mean immediate rise to my monthly payments.
Am I correct in that assumption?

You can always just use your prior year's tax return.