Monthly Archives: May 2014

Step 1: Identify the Problem

The Problem

I graduated from Harvard Law School with debt.  A lot of it.  Even though I only took out enough to cover the cost of tuition, and didn’t have any other debt, a few years later, I still owe $125,933.50.  I know I’m not alone.

This is an enormous problem.

Why?

Exhibit A: Classmate working twelve zillion hours a week at a large law firm, and never sees his child/wife/dog/bed, but can’t move to something with more reasonable hours because it won’t pay enough.

Exhibit B: Friend working for a not-for-profit, and even with the federal government’s income-based-repayment program will be repaying her loans for TWENTY-FIVE YEARS.  She’ll be close to 60 years old before she’s done.

OK, you say, those are the extremes.  Agreed.  Here’s some other problems even if you are (as I am) somewhere on the scale between the two:

  1. It’s stressful.
  2. Because of compound interest, it’s going to cost a lot. Really a lot.
  3. As a result of #2, it’s harder to afford a house.  A child.  Supporting elderly parents.  [INSERT REALLY IMPORTANT AND PRICEY THING OF YOUR CHOOSING HERE].

None of these are what’s driving me crazy about my loans, however.  What’s lighting a fire under my butt is that I’m spending about 1/3 of my after-tax monthly salary on meeting my loan payments.  In other words, I work about 1.5 days (of a five-day work week) just to pay Harvard Law School (principal payments) and the federal government* (interest payments).

I like both of those institutions.  I really do.  I’m happy to pay taxes to the federal government in recognition of the enormous benefits of living in this country.  I’m grateful to Harvard Law School for the degree.  I just don’t want to spent the next decade working for them.  Instead, I want to work for the following: me and my family.

The Plan

Pay down all of the debt in one year and forty-five days.  That’s how long it took to build the Empire State Building.  If in the 1930s, during the Great Depression, they could build a 103-story skyscraper in that period of time, I can pay back my loans in the same time.

It’s not going to be easy.  I make a monthly salary of $6,574 (after taxes etc.).  In other words, putting 100% of my paycheck towards my loans will not get me there.

The Solution

So, that’s the problem, and the plan.  What’s the solution?  Frankly, I don’t know (although I have some ideas).  This blog will be about figuring it out.

*My loans are mostly all from the federal government, instead of private lenders.