Staggering student loans

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My buddy paid for most of his condo with poker winnings, and I paid for a good chunk of a degree in another field with gambling winnings (all reported to the IRS and bet at legal betting establishments). The biggest irony is that I learned more statistics building experimental stats models to try and predict in-game performance measures than I did doing straight psychology research.

A couple years ago I built a successful model to accurately predict an NFL RB's rushing totals for the 2nd half of the season, which I used to make prop. bets for/against him, and also inform on some shakey spreads for his team. I went something like 9-1, though I had to scrap everything at the end of the season because the offensive coordinator brought in too many new players.

Statistics...they are good for more than EBT. :D

There was a time when I was making decent earnings online on online poker, and I think I need to get back to that. A lot of stats involved in that.

its amazing how sometimes the only practical solutions are completely unpractical!

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My idea is that if I can consolidate into two loans, then it might be more managable at some point. I figure eventually I will need to speak to a financial advisor, just have to find one :(
It can be like finding a good mechanic....there are very few that are truly good at what they do. I would recommend asking other professionals (lawyers and physicians, since both carry high debt loads) if they work with anyone. I'll be doing this before too long, because while I consolidated around 4.5% (which isn't bad), I still have a couple at 6.8%, and it irks me to no end having to pay that extra interest. I can't even imagine taking loans now, since the rates are more likely to go up than down. For people who went to grad school in the mid-late 90's, they have loans ~2%, which is crazy...that is free money. In that case I would have maxed out everything and reinvested it.
 
It can be like finding a good mechanic....there are very few that are truly good at what they do. I would recommend asking other professionals (lawyers and physicians, since both carry high debt loads) if they work with anyone. I'll be doing this before too long, because while I consolidated around 4.5% (which isn't bad), I still have a couple at 6.8%, and it irks me to no end having to pay that extra interest. I can't even imagine taking loans now, since the rates are more likely to go up than down. For people who went to grad school in the mid-late 90's, they have loans ~2%, which is crazy...that is free money. In that case I would have maxed out everything and reinvested it.

Yikes if you are erked about 6% you would umm be really unhappy about my private loan rates, they use the Libor index, so basically its like getting a finger shoved up something repeatedly. Sorry for thr graphics

Thats good advice though, I know of some newer doctors i might ask what they did, assuming mom and dad didnt pay for it.
 
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150,000 at 6.8% = 10 years or 120 payments of forking out $1726.20 per month! I'm sorry, but actually makes me scared to think about. A good rule of thumb is that your total education debt should be less than your expected starting salary. If you borrow more than twice your expected starting salary you will find it extremely difficult to repay the debt!

That's 1726 bucks a month that you could have used to pay for your kids educations, a fat retirement account at the end of your career, opportunities to see the world, a mortgage on a nice home (or heck a mortgage on a modest home plus the mortgage on your sick parents modest home). Psychologists can make a comfortable living, but when 1/3 of your income each moth is dissolved like that - financially it's just not logical.

I went and got my doctorate, came out with about $20,000 in debt from undergrad and another 10k from gradschool- and still lament the skimpy living conditions I put my family through during this time and having to pay back even that sum. Plus, going to gradschool also means a loss of wages over five to seven years where you could have been working full time, making headway on a home, retirement, etc. which is something most don't consider.

I see many challenges in our field right now, but I'd say the debt psychologists are going into is one of the most prominent

Actually what you pay back each month on Income Based repayment is based on your income from the previous year. You have to refile each year based on your taxes. Repayment is based on income,marital status and number of dependents you claim on your taxes. A single parent with two children and a $ 45,000 a year job will pay $220 per month even with a debt load of $150,000 at 7% interest. See http://www.ibrinfo.org/calculator.php and do the math.

After 10 years of paying on the loan under IBR in a public service job or government position like a community mental health agency, publicly funded educational institution like a state university, the Veterans Administration, a 501c nonprofit corporation etc the entire balance is forgiven and that forgiven debt is NONTAXABLE! If you work in private practice or for a private company, the balance unpaid on the loan is forgiven after 25 years and the balance of forgiven debt is taxable. To qualify you have to get your loans consolidated into direct loans which is allowed even if you have consolidated before. The loans must be federal loans Perkins Stafford etc... The 10 years of payment under IBR do not need to e at the same job nor do they have to be consecutive.

This public service forgiveness was created to encourage people with expensive educations (meaning lawyers who went to Duke, Stanford or Yale) to work in the public sector. Lawyers rule the universe and thereby create perks for themselves :laugh:
 
Actually what you pay back each month on Income Based repayment is based on your income from the previous year. You have to refile each year based on your taxes.

This public service forgiveness was created to encourage people with expensive educations (meaning lawyers who went to Duke, Stanford or Yale) to work in the public sector. Lawyers rule the universe and thereby create perks for themselves :laugh:

It is precisely why my wife is now considering the military as an option after spending a fortune to go to Georgetown. Interestingly, I ran the numbers, and it actually is only a small pay cut to go into a military position versus the corporate world all things considered.

A standard 10 year repayment, not income based repayment, would require a $4k per month payment in order for her to pay off the loans in 10 years, versus the $550 average payment over a 10 year stint in the military (She'll have roughly $300k in educational debt.) What is really shocking is that once you add everything up, it's not all that far apart. Sure private sector is still more lucrative, but federal employment still compares rather favorably.

If this is your plan, and you can qualify/secure a position that will make you happy, then I see no problem with this plan. Avoiding putting all your eggs in one basket is important, but for most people working in a 501(c)3, a federal, state or local municipal facility, or the military is an attractive option. Competition is keen for these positions because of these benefits, but don't let that stop you from considering these as viable options, just make sure that you set yourself up for the success you want.

Mark
 
Interesting statistic to add to this discussion, according to 2009 APPIC match statistics, more than 50% of all students applying to internship owed $70,000 or more, of those more than 38% owed more than $100,000.

The Average Stipend of those who matched: $23,396!
Average age: 30.2

This situation is criminal at best. Seriously, if you're 30, your job pays you $23,396, and you have over $70,000 of debt.... Something is REALLY wrong.


Mark
 
A standard 10 year repayment, not income based repayment, would require a $4k per month payment in order for her to pay off the loans in 10 years, versus the $550 average payment over a 10 year stint in the military (She'll have roughly $300k in educational debt.)

I'm still murky on this IRB, I read somewhere that the loans had to be taken out after 2014 to qualify for the ten year deal. Is there another ten year program out there as well?

Thanks for all these comments guys and gals. Military is a plan for me but I'm working out some others that won't run my family's finances. I'm starting to think I should learn poker:D
 
I'm still murky on this IRB, I read somewhere that the loans had to be taken out after 2014 to qualify for the ten year deal. Is there another ten year program out there as well?

Thanks for all these comments guys and gals. Military is a plan for me but I'm working out some others that won't run my family's finances. I'm starting to think I should learn poker:D

yeah all the newest regulations circa 2009-2010 require that the loans be taken out post 2014

BUT and this is a big BUT. There seems to be a loophole, that if you consolidate into a Direct loan after 2014, which if we are all starting out grad school, would be about the appropriate time to do so, then that consolidated direct loan DOES fall under the 2009 legislation, i.e., the 10 year program.

Cheers
 
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