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Messages - DTEJD1997

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Incoming 1Ls / Re: LOANS: Your debt load? Normal debt load?
« on: June 09, 2010, 12:07:02 AM »

I would caution you to think twice about having $175k in student loan debt.

I graduated from law school in 1997 and did not get a good job for several years.  My debt eventually went up to just over $100k. 

Eventually, I got back on track and I have had a VERY good job for the last several years.   So far, I have paid about $60k towards my loans & interest, but I still owe about $75k.

Lets assume you can make $100k a year after graduation.  Take home pay will be in the neighborhood of $60k.  You will most likely have to have a place to live , vehicle, food, clothing, etc....That is certainly going to be at least $2k a month, but probably will be at least $3k, maybe even more...That will leave you with $24k a year to build a retirement account, build a down payment for a house, AND PAY DOWN YOUR LOAN BALANCE.   I forgot to calculate interest on your loans....interest will probably be around 5% or so, which equates to $8k a year.

REMEMBER, for all intents & purposes, student loan interest is not tax deductible.

If you have a job earning $100k a year, you will probably be able to pay down your student loan debt by a maximum of $12-16k a year.  It will therefore take you a MINIMUM of 10 years to pay off your loan.  Probably a more realistic expectation is 12-14 years.  That is also assuming that you make AT LEAST $100K a year.

Of course, if you are making $125k or more, you will probably be OK if you are aggressive about debt repayment for 5-6 years.

Please be careful, and GOOD LUCK!

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