Advice wanted

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Advice wanted

Postby Anonymous User » Fri Mar 09, 2018 2:14 pm

I graduated from a T14 in May 2016. I passed a bar and started work in a litigation firm in August 2016, where I still am. My current salary is $120k with $5-10k bonus.

I want to move out of litigation and into a career with less and more consistent working hours (I plan on starting a family soon). I also value stability. Therefore, I am looking at federal jobs. I don't have the years or type of experience that most federal openings require. The only job I've gotten a callback for is a GS 11 position. Taking a GS 11 position would be quite a pay cut (although the step would matter greatly).

My current loan balance is ~118k. I am currently making $1,300/mo payments and have about 8.5 years left on the standard repayment plan.

The questions I am asking myself are:
- Can I suck it up for 8-9 more years until I get this paid off? But by then, will I have too much experience in my niche field to land a federal job?
- If I take the GS 11 job, will I have enough money to live off of and save securely? GS 11 + $1,300/mo in loan payments is very tough. My take home net would be slim.
- If I take the GS 11 job, would it make sense to switch to REPAYE and pursue PSLF? On one hand, it would alleviate the immediate financial stress and I would pay less over time. But, I run the risk of PSLF being cancelled, or losing my job, etc etc and having a large loan balance waiting. I would have to pay taxes on a significant sum of money. Which means that I would have to start a side-fund for that, which is essentially an additional monthly loan payment. Additionally, it would take 10 years. So instead of 8.5 years remaining (currently), it would add about 2 more years to my debt life.

I'm looking for general thoughts and would appreciate any input. Thank you.

albanach

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Re: Advice wanted

Postby albanach » Fri Mar 09, 2018 3:21 pm

Anonymous User wrote:I graduated from a T14 in May 2016. I passed a bar and started work in a litigation firm in August 2016, where I still am. My current salary is $120k with $5-10k bonus.

I want to move out of litigation and into a career with less and more consistent working hours (I plan on starting a family soon). I also value stability. Therefore, I am looking at federal jobs. I don't have the years or type of experience that most federal openings require. The only job I've gotten a callback for is a GS 11 position. Taking a GS 11 position would be quite a pay cut (although the step would matter greatly).

My current loan balance is ~118k. I am currently making $1,300/mo payments and have about 8.5 years left on the standard repayment plan.

The questions I am asking myself are:
- Can I suck it up for 8-9 more years until I get this paid off? But by then, will I have too much experience in my niche field to land a federal job?
- If I take the GS 11 job, will I have enough money to live off of and save securely? GS 11 + $1,300/mo in loan payments is very tough. My take home net would be slim.
- If I take the GS 11 job, would it make sense to switch to REPAYE and pursue PSLF? On one hand, it would alleviate the immediate financial stress and I would pay less over time. But, I run the risk of PSLF being cancelled, or losing my job, etc etc and having a large loan balance waiting. I would have to pay taxes on a significant sum of money. Which means that I would have to start a side-fund for that, which is essentially an additional monthly loan payment. Additionally, it would take 10 years. So instead of 8.5 years remaining (currently), it would add about 2 more years to my debt life.

I'm looking for general thoughts and would appreciate any input. Thank you.


You plan on starting a family? Are you married and if so, does your spouse work? Obviously, a federal position would be PSLF eligible and you could switch to PAYE. With a family size of 3 and $60k in income, your loans would be about $250 according to the online calculator I found. You may also be eligible for your school's LRAP.

If your spouse is working, then this might not help.

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Re: Advice wanted

Postby Anonymous User » Fri Mar 09, 2018 3:29 pm

albanach wrote:
Anonymous User wrote:I graduated from a T14 in May 2016. I passed a bar and started work in a litigation firm in August 2016, where I still am. My current salary is $120k with $5-10k bonus.

I want to move out of litigation and into a career with less and more consistent working hours (I plan on starting a family soon). I also value stability. Therefore, I am looking at federal jobs. I don't have the years or type of experience that most federal openings require. The only job I've gotten a callback for is a GS 11 position. Taking a GS 11 position would be quite a pay cut (although the step would matter greatly).

My current loan balance is ~118k. I am currently making $1,300/mo payments and have about 8.5 years left on the standard repayment plan.

The questions I am asking myself are:
- Can I suck it up for 8-9 more years until I get this paid off? But by then, will I have too much experience in my niche field to land a federal job?
- If I take the GS 11 job, will I have enough money to live off of and save securely? GS 11 + $1,300/mo in loan payments is very tough. My take home net would be slim.
- If I take the GS 11 job, would it make sense to switch to REPAYE and pursue PSLF? On one hand, it would alleviate the immediate financial stress and I would pay less over time. But, I run the risk of PSLF being cancelled, or losing my job, etc etc and having a large loan balance waiting. I would have to pay taxes on a significant sum of money. Which means that I would have to start a side-fund for that, which is essentially an additional monthly loan payment. Additionally, it would take 10 years. So instead of 8.5 years remaining (currently), it would add about 2 more years to my debt life.

I'm looking for general thoughts and would appreciate any input. Thank you.


You plan on starting a family? Are you married and if so, does your spouse work? Obviously, a federal position would be PSLF eligible and you could switch to PAYE. With a family size of 3 and $60k in income, your loans would be about $250 according to the online calculator I found. You may also be eligible for your school's LRAP.

If your spouse is working, then this might not help.


Not married but will be soon, most likely. My partner does work and makes ~$96k. No student loans.

My school doesn't have an eligible LRAP.

My biggest fear with PSLF is watching my debt balloon over the years, only to have something catastrophic happen and be on the hook for it (not to mention the tax bill). I definitely want to continue paying the principal down...but the standard payments are steep on a GS-11 salary, as you understand.

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boredtodeath

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Re: Advice wanted

Postby boredtodeath » Fri Mar 09, 2018 3:41 pm

I replied to your post in the Student Loan thread, but I just want to reiterate here that forgiveness under PSLF is NOT taxable. It's not the same as riding PAYE/REPAYE to forgiveness.

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Re: Advice wanted

Postby Anonymous User » Fri Mar 09, 2018 3:45 pm

boredtodeath wrote:I replied to your post in the Student Loan thread, but I just want to reiterate here that forgiveness under PSLF is NOT taxable. It's not the same as riding PAYE/REPAYE to forgiveness.


You are correct! Thank you!

Are loan amounts forgiven under PSLF considered taxable by the IRS?
No. According to the Internal Revenue Service (IRS), student loan amounts forgiven under PSLF are not considered income for tax purposes. For more information, check with the IRS or a tax advisor.

Do I need to make consecutive payments to qualify for PSLF?
No. The 120 payments do not have to be consecutive payments. For example, if you have a period of employment with a nonqualifying employer, you won’t lose credit for prior qualifying payments you made. However, a payment can be counted only if you are employed full-time by a qualifying employer at the time you make the payment.

https://studentaid.ed.gov/sa/repay-loan ... g-payments

albanach

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Re: Advice wanted

Postby albanach » Fri Mar 09, 2018 5:14 pm

Anonymous User wrote:Not married but will be soon, most likely. My partner does work and makes ~$96k. No student loans.

My school doesn't have an eligible LRAP.

My biggest fear with PSLF is watching my debt balloon over the years, only to have something catastrophic happen and be on the hook for it (not to mention the tax bill). I definitely want to continue paying the principal down...but the standard payments are steep on a GS-11 salary, as you understand.


Does your partner have loans and if so, could they be pslf eligible? That would be a double benefit.

I thought the entire T-14 had LRAP that covers government employment. Of course even if it is covered, when you add your future spouse's income you may not receive anything.

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Re: Advice wanted

Postby Anonymous User » Fri Mar 09, 2018 6:05 pm

albanach wrote:
Anonymous User wrote:Not married but will be soon, most likely. My partner does work and makes ~$96k. No student loans.

My school doesn't have an eligible LRAP.

My biggest fear with PSLF is watching my debt balloon over the years, only to have something catastrophic happen and be on the hook for it (not to mention the tax bill). I definitely want to continue paying the principal down...but the standard payments are steep on a GS-11 salary, as you understand.


Does your partner have loans and if so, could they be pslf eligible? That would be a double benefit.

I thought the entire T-14 had LRAP that covers government employment. Of course even if it is covered, when you add your future spouse's income you may not receive anything.


Mine doesn't cover because the salary is too high. The partner does not have student loans.

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anon sequitur

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Re: Advice wanted

Postby anon sequitur » Sat Mar 10, 2018 1:13 am

Except for the very best programs, LRAP is pretty much only useful for really low paying jobs like legal aid, DA/PD. Anyone with a federal job is going to outgrow it in a year or two.

OP, if you have six months experience, you'll be GS-12 eligible in six months, that's quite a big jump. You can hold out, I'd definitely consider any job that has at least a gs-14 eligibility, it's a good lifestyle. After 3 years you get 13 sick days, 20 vacation days, plus 11 federal holidays a year. You'll never get rich, but it's the kind of job where you have time to actually raise a family without a nanny.

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Re: Advice wanted

Postby Anonymous User » Mon Mar 12, 2018 10:39 am

anon sequitur wrote:Except for the very best programs, LRAP is pretty much only useful for really low paying jobs like legal aid, DA/PD. Anyone with a federal job is going to outgrow it in a year or two.

OP, if you have six months experience, you'll be GS-12 eligible in six months, that's quite a big jump. You can hold out, I'd definitely consider any job that has at least a gs-14 eligibility, it's a good lifestyle. After 3 years you get 13 sick days, 20 vacation days, plus 11 federal holidays a year. You'll never get rich, but it's the kind of job where you have time to actually raise a family without a nanny.


Thanks, and I agree, I think I will accept if it is offered.

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Re: Advice wanted

Postby Anonymous User » Mon Mar 12, 2018 2:13 pm

Actually, it might make sense to not enter REPAYE, if I marry (which I intend to). As I understand it, spousal income is factored in to REPAYE. Whether filing taxes jointly or separately.

With some quick math, if I'm making $84k and my wife is making $100k, my monthly payments would be about $1,300, which is what I'm paying now!

Someone please tell me I'm wrong! :D

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Re: Advice wanted

Postby Anonymous User » Wed Mar 14, 2018 11:29 am

A follow-up, general question: Does anyone think/not think the massive pay cut is worth it for the federal "lifestyle"? It's a huge pay cut, but after a few years I should be making okay money as a 12/13. Some of the downsides are having to pay for health insurance and having to pay for monthly parking, so that cuts into the paycheck even more. Also, going on PAYE means that, when married, we won't be able to file our taxes jointly, which could end up as a bigger tax bill.

But, I think it is worth it to get my foot in the door in a GS position. I don't see how else I could really enter the federal sphere as a 12/13, as my current job really has no relation to federal skillsets.

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Re: Advice wanted

Postby Anonymous User » Thu Mar 15, 2018 6:51 am

I’ll be honest, I think what you’re describing is a bad idea. The federal lifestyle, at least for my friends (who started at GS 9 or GS 11 as grad-level scientists), sucks. Some of your hours savings will be eaten up by your commute: assuming you’ll be in DC if you want to have enough space for kids at that salary (and your spouse’s) you’ll be living on an island somewhere out in the Chesapeake. More generally, why go to law school and become a lawyer if you’re immediately going to light it on fire for a quasi-dead-end fed job that doesn’t pay much better - or offer the promise of future raises - compared to a non legal job that didn’t saddle you with so much debt?

I could see the argument for the quick fed job if your spouse was killing it, but I’m not seeing the quality of life with that debt service and that income. Ladle a mortgage onto that and ??????. Both my friends - neither of whom went to LS so have less debt - have been looking at jumping to the private sector for more $$.

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Re: Advice wanted

Postby Anonymous User » Thu Mar 15, 2018 9:36 am

Anonymous User wrote:I’ll be honest, I think what you’re describing is a bad idea. The federal lifestyle, at least for my friends (who started at GS 9 or GS 11 as grad-level scientists), sucks. Some of your hours savings will be eaten up by your commute: assuming you’ll be in DC if you want to have enough space for kids at that salary (and your spouse’s) you’ll be living on an island somewhere out in the Chesapeake. More generally, why go to law school and become a lawyer if you’re immediately going to light it on fire for a quasi-dead-end fed job that doesn’t pay much better - or offer the promise of future raises - compared to a non legal job that didn’t saddle you with so much debt?

I could see the argument for the quick fed job if your spouse was killing it, but I’m not seeing the quality of life with that debt service and that income. Ladle a mortgage onto that and ??????. Both my friends - neither of whom went to LS so have less debt - have been looking at jumping to the private sector for more $$.


All valid points. It would certainly be more banal work. But I really don't enjoy the litigation lifestyle and hours.

My commute would be the same. Money would be tight for the first year or two, but once I started moving up GS-12 it would be manageable.

All I really want from a job is stability and a modest income. I don't eve aspire to be rich. I'm okay with a "dead end" job that's GS-14 ceiling. Theoretically, I could always jump back private if I desired. Or transfer to other federal jobs possibly at a higher grade and with a closer commute.

I would love a non-legal job that offers the same opportunities, but what is it?

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anon sequitur

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Re: Advice wanted

Postby anon sequitur » Thu Mar 15, 2018 11:48 am

As the person who recommended the fed lifestyle above, I would add that I do not live in the DC area or any other high cost of living area, and personally would not be interested in doing so unless I were single, DINK, or had a family with a high income partner. But there are fed jobs all over the country.



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