I do it because my Poll about how much Student Debt is or will be owed by Law Grads has surprisingly drawn a lot of responses. So I thought, since money and debt seem to be on many people's minds, I'd throw in whatever helpful material I have so as to aid the thought process.
Here is a copy of an Amortization table sent to me by New York State Higher Education Services Corporation around the time I was defaulting in 09. *It doesn't mention anything about an interest rate though.
It's a bit chopped off, so I'll correct it later. But look at this one for now. For instance, if one is making 100K a year, (I'm assuming the chart means Gross Pay) the suggested monthly payment on a 95K Student Loan is $1250.00.
On a side note, and offhand, with respect to a typical Mortgage, I seem to recall a figure of six hundred to 700 a month per 100K borrowed. In either case, be it Mortgage or Student Loan, the Interest is all front-loaded, so that principle only gets paid into "on the back end" or towards the end of the loan term.
So anyway, $1250.00 a month seems like a really big payment to me for a 95K loan, especially since 100K in salary per year after taxes is more like 70K take home or net pay (give or take a few G's)
On the other hand the loan gets paid off in 6 to 8 years I believe.
So in this scenario a Loan Payment of $1250X12 months is 15K a year. Deduct that from your take home pay, and now you have 55K a year to live on for everything else. Pretty slim I'd say.
And here is an Expense Worksheet they were good enough to send. Have a look-especially you younger kids in your 20's and even you kids in your 30's, because food, clothing,shelter, and all of the other vital things that must get paid before the Student Loans are even considered.......cost money. And unlike above, where I deducted the Loan Payment first, you will in reality be factoring that payment in last, and after all other expenses. And if you cannot afford it, you will defer as I did. And defer, and defer, and defer.
What is always good to know at any point in your life is the answer to a very basic and simple question, yet one that a lot of people cannot always readily answer. And that question is: (Drumroll)
How much do you need to make?
Not how much you want or desire, but how much do you NEED?
Break it down monthly.
Obviously the more you owe in Student Loans, the more you will have to make in Salary or from whatever source.
Just stuff to consider, because Student loans have a way of growing and growing, like a monster in an old Sci-Fi B movie I saw, and I'll look for a youtube clip and put it here if I find it.
Here it is. Ymir kept growing and growing and defeats the Elephant in this scene. I always feel sad for the Poor Elephant. He was so brave, trying to defend the Earth and all.
Also, I'll rummage in my files for more of these helpful tables and/or worksheets.
And at this juncture, for a reality check, you should pay a visit to the Blog called: "Shit Law Jobs". It's to the right in my blog list.
Then try and figure out how you can roam the earth to find the job and/or the money you need for your new and very hungry friend: Debt. You know--Little Shop of Horrors and all that stuff. (I apologize to any other bloggers if they have used this clip already in a Post, just in case)
If your debt is under 50K or even 60K you have better than a fighting chance. More than that is a red flag, and pay attention to it, because though you might think you know the territory, it could well mean trouble with a capital T (Rhymes with P, and that stands for Pool).
One other thing: Try not to take on a mindset that tells you something like: "Oh! No Problem! When I win my first big case or two, I will pay the loans all off in one shot."
It has been my observation that that sort of thinking will cause you discard the month-to-month payment approach, and defer until that Magic Day when you win that big case--or get that big promotion, or Holiday Bonus, or sell that stock, or inherit that money from uncle Wilbur--which may or may not come.
In addition, it has been my observation that people that come into a windfall, however serendipitous or conversely, planned, tend to squander the fruits of that windfall on things other than Loan Debt, and pretty quickly. For instance, look at all the Lottery winners that piss through their winnings in a short period of time.
Then the money is gone, you still have the debt, and the solution is? You guessed it--defer some more.
This ain't Fantasy Island after all youse kids. Lawyer or not, the bottom line is that you will need to service that debt, or you will carry it with you for a long, long time.
Because ......one day....debtor or not, you wake up, look in the mirror .....and.....you are.......
OLD!
Who knows where the time goes.
Now, for me, how much do I need?
All I need do, I think, is to gross around 150K a year or 3K per week, or 500 bucks a day for 6 days a week.
Then maybe I will net 100K a year (After Taxes).
I will be able to pay off my 300K Debt, plus the 24K per year in interest it is now earning, in, say, 4 or 5 years?
Maybe I can do it. I have no family. No wife. No kids.
I will be 51 years old. 52 or 53 if it takes a few years longer.
Difficult, but maybe not impossible, so doable, maybe.
By now, I desire no home of my own or Vacation, or Country Club membership, or anything else but my Freedom, and my return to full first class, non-indebted American Citizenship.
And, I will not have to flee the Country.
Or, if I don't flee the country and pay nothing at all, the debt will literally soar past 1 million dollars in 20 years, because of compounded interest. The Taxpayer, in that scenario, would then be stuck with the bill.
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And Here are a couple of scans I figured I'd throw in for atmosphere, if nothing else. I'm having strong brewed coffee now, very hot, and Peanut Butter and Jelly. Then Bed. It's starting to rain outside. Sounds nice.
This form (below) did come with a request for hearing to object to wage garnishment form, which I can scan as well if anyone is interested.
So with Wage Garnishment, or, even if it never happens, at least the the threat of, or the vague idea of, you will always feel something akin to , if not actual, fear. I mean......come on! you know what a work place is like! An office, a construction site, the loading docks, the store or whatever.......there are people you get along with and like just fine, and then there are the people you can't stand. Maybe people that are jealous of you too? Possibly because of your Education? Maybe Hostile people?
Wait till they get wind of your Wage Garnishment you overeducated Shithead, as you feel opprobrious glances from the accounting department and elsewhere following you hither and thither, boring the proverbial hole in your back. Wait until your enemies at work hear about it through the grapevine.
And this too.
(Both of these are mine, with my name, , which is covered up.)
But at least only you and the Gov. will know about the seizure of the Tax return, and not the people at work.
I would love to see what a form notifying one of a seizure of a Social Security Check looks like. If anyone out there has one, and wants to e-mail it to me, I'll post it here.
Old FDR wuld be spinnin' for sure.
So really, if you are in a position where you do not even have to start down this road of Student Debt, my advice is not to.
Wait 5 years and then take a look at the job prospects for lawyers and the money being made.
We all know by now that the current system cannot sustain itself and that things have gotta change.
Who knows, you might just find something else you Love doing, and not want to become a Lawyer at all.
Are you so sure you won't?
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