It’s not unusual these days to come out of law school with over $120,000 in student loan debt.
A friend of mine started a solo practice, bought a new car, bought a house in San Diego, etc. He bought a new car before I did, he got married before I did, and he bought real estate before I did. He says he not getting rich off of the practice, but he’s doing ok. I asked him how in the hell he is doing all that AND paying his student loans.
He basically said he is not really paying his student loans. He didn’t give much in the way of specifics, but it sounds like he’s been doing deferments, forebearances, and/or minimum payment plans for the past 8 years or so.
I’m no expert on student loans, but his loans are probably on a 30 year term that will not be extended, at some point the loans will come due, and the longer he puts off paying the piper, the monthly payment is going to be through the roof when the lender comes knocking.
His response, “Well, I’m going to be dead at some point.”
In the meantime, I am doing basically the same as he is doing in terms of a law practice and a house, albeit not in San Diego, but I’m paying my loans on a “level pay plan” instead of making reduced payments now in exchange for large payments later. It really hurts the wallet to fork over the money every month, but I suck it up and do it.
I get the feeling my friend is setting himself up for default down the road unless his practice really takes off.
Which one of us is on the better track?