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Law school loans: draining my savings edition

I, Mr. LawSchoolDebt, now have zero savings after siphoning everything into my law school debt.

goodman

I still have $1,000 in a 401k from an old job and I’m planning to liquidate that. And yes, I’m well aware that taking the tax penalty for withdrawing a 401k early is the Lloyd Christmas approach to financial planning, but we’re only talking about a $1,000 401k and paying off my law school debt is my #1 goal in life. The little Mr. LawSchoolDebt who wanted to be a dot-com CEO wouldn’t be impressed that paying off student loans is my life’s dream, but little Mr. LawSchoolDebt grew into medium Mr. LawSchoolDebt, who thought law school was a good idea, so little Mr. LawSchoolDebt has zero credibility.

Here’s the current damage report as of today:

Principal Accrued Interest Interest Rate Total
$22,084.34 $16.74 6.55% $22,101.08
$35,533.53 $37.24 7.65% $35,570.77
$23,437.53 $1,007.08 6.55% $24,444.61
$0.00 $0.00 8.25% 0
$44,345.54 $33.31 8.00% $44,378.85
$24,307.85 $33.31 6.30% $24,341.16
TOTAL: $150,836.47

It’s a breathtaking thing of beauty to see the loan with the ghastly 8.25% interest rate reduced to nothingness. I hope some banker is crestfallen that I paid off the loan quickly and he will be unable to enjoy his fourth gold-plated LEED-certified hot tub that he planned to finance with compounding interest from my law school loans.

There will be few days when I will be able to enjoy a steep drop in my loan balance like today, so I will do my best to savor this experience and fondly look back on the day I slayed the 8.25% Death Monster. Of course, this could all change if I landed a job that paid significantly more or I won the lottery/Jeopardy/Survivor. However, my life experience has taught me to assume the worst possible outcome is more likely to happen to me than an unlikely fantastic outcome, so I’m going to continue to operate on the assumption that my present life situation in terms of debt and salary won’t be materially altered in the near term.

What would it take to pay off your law school loans in three years?

Excellent question to ask yourself, Mr. LawSchoolDebt! Also, stop talking to yourself because other people think it’s weird and this is #WhyImSingle. Although it takes three years to pile up an enormous, jaw-dropping sum of debt that dismantles your quality of life, reshapes your future, and drenches your life in cynicism and despair, three years is actually not a very long time in the greater scheme of things. So, I thought I’d run an experiment using Credit Karma’s online debt calculator to see what it would take to pay off the balance of my law school loans in three years. Here are the results of my scientific study:

Monthly payment Interest paid Total paid
Loan #1 $22,084.34 $677.00 $2,302.00 $24,386.34
Loan #2 $35,533.53 $1,108.00 $4,435.00 $39,968.53
Loan #3 $23,437.53 $719.00 $2,441.00 $25,878.53
Loan #4 $44,345.54 $1,390.00 $5,679.00 $50,024.54
Loan #5 $24,307.85 $743.00 $2,432.00 $26,739.85
Monthly payment: $4,637.00 Total: $166,997.79

Seeing as I’m only making about $3,000 a month post-taxes, I don’t think this is feasible. There’s currently no way I can make a $4,637 monthly payment unless a sugar momma were to magically come into my life and I don’t have the abs for that to happen, so it looks like the three-year plan is out. C’est la vie.

What would it take to pay off your law school loans in six years?

Let’s stop talking foolish and aim for a more realistic goal of six years. Six years is longer than I’d like to take and certainly longer than my parents want me to live at home and, by my calculation, exactly six full years longer than a single woman will accept a 30-something prospective suitor to live with his parents, but $150,836.47 in debt is more than I’d like to have, so them’s the facts. Here’s how the six-year timeline looks:

Monthly payment Interest paid Total paid
Loan #1 $22,084.34 $372.00 $4,679.00 $26,763.34
Loan #2 $35,533.53 $617.00 $8,887.00 $44,420.53
Loan #3 $23,437.53 $395.00 $4,962.00 $28,399.53
Loan #4 $44,345.54 $778.00 $11,626.00 $55,971.54
Loan #5 $24,307.85 $406.00 $4,951.00 $29,258.85
Monthly payment: $2,568.00 Total: $184,813.79

Now this is looking better. If I could get some side gigs, I think paying $2,568 per month is within striking distance of encroaching upon the outer limits of the universe that just may intersect the mystical realm of feasibility. I’d prefer not to live with my progenitors for another 1/2 decade + 1, but if that’s the hand life has dealt me then so be it. The thing that irritates me under the six-year plan is the amount of interest I’m forking over to the greedy, evil, unloved-by-their-mothers bankers – $17,816 more in interest. For your convenience, I’ve included this handy graphic that not only reenacts each EvilBanker’s reaction to receiving your law school loan payment, but also conveniently and uncannily offers you,  dear reader, with a militarily precise representation of each and every EvilBanker’s physical appearance and manner of dress:

snidely-whiplash

I would rather pay off my law school loans faster than the Evil Banker can exclaim, “Curses! Foiled again!” If you’re a banker and offended by this factual depiction, I am more than willing to portray bankers in a sympathetic and attractive light in exchange for a hefty and morals-shifting gift to the Money For Mr. LawSchoolDebt’s Debt Charity. My 501(c)(3) status and Charity Navigator rating are pending, but don’t worry, it all goes to good cause.

So there we have it. $4,637 a month if Mr. LawSchoolDebt wants to unshackle himself in three years. $2,568 if Mr. LawSchoolDebt wishes to dig through a 500-foot financial sewage pipe for six years and escape into a ferocious rainstorm of freedom that will physically and metaphorically cleanse Mr. LawSchoolDebt’s soul à la Shawshank Redemption.

law-school-debt

 

 

 

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3 responses »

  1. I say go for the three year plan. What is the worst that could happen? You fail to achieve it and yet have paid down an enormous amount of loans nevertheless?

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    Reply
    • You’re right, I supposed the worst that could happen would be not meeting the goal. I’m definitely going to try, but I’m trying to stay grounded in reality. Failure to stay tethered to reality is what got me in this mess in the first place. Congrats on paying off two of your three loans, by the way. That must feel amazing.

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      Reply
  2. I hope you can get some freelance writing gigs in the future because you are a very entertaining (and informative) writer! That may be a great way to knock off some of your loans and maybe work toward a four- or five-year plan of repayment. Keep on truckin’!

    Liked by 1 person

    Reply

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