Hi Blind. I am currently a 3rd-year CS student at a no-name (but expensive) school around Boston. So far, I have 62k in private student loans currently at ~11% (I will be refinancing as soon as I graduate). I am very scared of this debt but it is too late for me to switch schools to something cheaper. I have prior internship experience at IBM and this year I am interning at Tesla ($28 hourly) and Datadog ($50 hourly) during the Fall season (hopefully going to get return offer for new grad). I am looking for some advice of how I can move forward with my debt. I would like to get this debt paid off as soon as possible so I can start investing more and start building wealth before I have kids. What would you do in my shoes? Should I invest in the meantime? Do I just save up and pay a lump sum of my loans at once? Do your thing, Blind.
You can get a $100k signing bonus from big tech if you negotiate, even after tax you can pay off all student debt at once.
Super easy. You should be leetcoding like crazy. 62k is nothing for a CS major. You can pay it off with your joining bonus. Focus on learning CS, get excellent at programming, algo and DS, aim for FAANG and you are set. You should not spend even a minute of ur time on this debt thing.
I have done about 100 LC (mainly med) and 150 on binarysearch.com but I definitely have a lot to learn. Can you give some examples of companies that give a large signing bonus like this?
FAANG...
Graduated with CS ages ago. I started at $17/hr right out of college. I managed to pay an extra $1k/month for several years to pay off my student loans. You’re making way more and should be able to knock it out fast. Just don’t get sucked into buying a new car or a place too expensive. Pay as much as you can as often as you can. You don’t don’t want to be one of those whiny 30yr olds complaining about how you own more now than you did when you first graduated. So people will try to drag you down. Or convince you to play a game of arbitrage to make theirselves feel betters. Once again, pay as much as you can as often as you can. A huge weight was lifted from my shoulders after my last payment.
Tesla only pays interns $28?!
They also work them 50+ hours a week.
Coz it's Tesla. Kids go there for experience and brand on resume. I had many friends of mine head there for internship to use that level up to Google/Apple next internship to eventually land FT in FANG.
You can kill that debt within a few years if you get a decent CS job, just focus on doing well in your internships and interviewing with companies a couple semesters before graduation so you can line up potential offers, and potentially have a return offer from one of your internships to compare against. If you can successfully get a few offers, you can let each know about the highest other offer and ask if they can match each other. This is the best way to get a good starting salary, without comparable offers you don't have much leverage for negotiating. After you've started a job, just stay frugal for the first few years and aggressively pay down that debt, since even after refinancing, it'll weigh you down until it's gone. If you can allocate 10% towards cash emergency savings and everything else besides basic expenses and 10% fun money to debt, you'll be good, and won't have to worry too much. Pay it down as quickly as possible. Then you can get to investing for retirement, kids, anything you wish for. I wouldn't invest until eliminating all debt with over 5% interest. Also, if you have some internship income to spare, it's worth prepaying some of that amount before interest starts accruing. Summary of personal preference for approaching that kind of debt while in school: * Save 10% of all internship income in cash emergency funds and put all other excess income towards prepaying the debt. * Besides that, just focus on doing well in internships and classes, and start interviewing with companies a couple semesters before graduation. * Line up 2+ offers with companies you'd like to work for, and negotiate using the other offers for leverage. * Live frugally after graduation and put all excess income to debt until fully paid off, with 10% income for savings and 10% for fun. Don't take on any unnecessary major expenses until then (keep housing and transportation costs low). * Once paid off, transition excess income to investments.
thanks! actionable advice. my goal is to continue living like a college student as best as i can after graduation until loans are significantly paid off but with an income like that... we’ll see)
With a good SDE income you might be able to pay off the debt in 1-2 years. :) Keeping it up for a bit after paying off debt will also give you the flexibility to absorb unexpected costs and retire decades earlier than higher TC folks if you choose, or just be more financially stable when/if you buy a house or start a family. You'll be able to relax a bit, but you'll be starting from knowing what you need and don't need and be able to just add expenses you feel make a noticeable improvement to your quality of life. Keeping the biggest costs like housing (rent below market average), transportation (walk/bike/bus), travel (kayak.com is great for getting low airfare + hotel prices, combine inexpensive local food with groceries for picnics), and food (cook most of the time) low makes it easy to save most of your income when earning over $60k, and builds awesome life skills. I kept expenses between $20k - $30k for the first few years after graduating, and have no regrets. Now I'm a homeowner, expenses are higher but still at a comfortable range to avoid interfering with other goals. There are a lot of helpful online resources around debt repayment, frugality, and financial freedom that you might find useful. Good luck!
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11%!? Did you borrow from the mob?
Discover Student Loans is the modern day mob looool
Dang that's crazy sorry. Not much you can do. Pay it off as soon as you can.