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    Wisconsin Lawyer
    July 01, 2002

    Consolidating Law School Debt - Figures

    Considering whether to consolidate your law school debt? This economics primer for law students and lawyers gives some key facts about federal consolidation loans and information sources you'll need to make that decision.

    Richard George

    Wisconsin Lawyer
    Vol. 75, No. 7, July 2002

    Figure 1
    Recent 10-year History
    Average Repayment Rate = 7.55

    Year Repayment
    Rate
      Year Repayment
    Rate

    92-93

    6.94 %
    98-99
    8.25 %

    93-94

    6.22 %
    99-00 7.72 %

    94-95
    *

    7.43 %
    00-01 8.19 %

    95-96

    8.25 %
    01-02
    5.99 %
    96-97
    8.25 %
    02-03 4.06 %

    97-98

    8.25 %
       

    (effective July 1, 2002)

    Figure 2
    Cumulative Amount of Federal Student Loans Borrowed by Degree Recipients in the 1990s

     
    1992-93
    1995-26
    1999-2000
    Program &
    Institution Type
    % who
    Borrowed
    Median
    Amt. Brrwd.
    Monthly
    pymt. for
    Median
    % who
    Borrowed
    Median
    Amt. Brrwd.
    Monthly
    pymt. for
    Median
    % who
    Borrowed
    Median
    Amt. Brrwd.
    Monthly
    pymt. for
    Median
    Bachelor's
    Public College or U
    38.1 6,449 75 52.4 10,342 120 59.6 15,375 179
    Bachelor's
    Private College or U
    45.5 9,793 114 55.4 13,983 162 66.5 17,250 200

    Master's
    Public U

    33.8 8,502 99 55.5 12,496 145 54.2 17,341 201
    Master's
    Private U
    39.0 9,343 108 54.4 19,213 223 59.1 24,409 28
    Doctoral 45.0 11,191 130 34.0 14,084 164 50.0 24,078 280

    Professional
    Public U

    72.2 20,884 242 80.2 47,183 548 87.0 61,417 713
    Professional
    Private U
    75.1 26,813 311 74.5 54,214 629 83.3 73,533 854
    Notes: Figures reflect cumulative student loan borrowing as of the year indicated. For graduate students, this includes debt incurred as an undergraduate. Monthly payment is calculated using the median amount borrowed, assuming an annual interest rate of 7 percent under the standard 10-year repayment plan. Source: U.S. Department of Education, National Center for Education Statistics. National Postsecondary Student Aid Studies: 1992-93, 1995-96, and 1999-2000.

    Figure 3
    Monthly Payment Table

    Balance
    5.00 %
    6.00 %
    7.00 %
    8.25 %
    Level
    $ 5,000 $53.03 $55.51 $58.05 $61.33 10 yrs
    6,000 63.64 66.61 69.67 73.59 10 yrs
    7,500 69.37 73.19 77.13 82.22 12 yrs
    8,000 73.99 78.07 82.27 87.70 12 yrs
    9,000 83.24 87.83 92.55 98.66 12 yrs
    10,000 79.08 84.39 89.88 97.01 15 yrs
    15,000 118.62 126.58 134.82 145.52 15 yrs
    20,000 131.99 143.29 155.06 170.41 20 yrs
    30,000 197.99 214.93 232.59 255.62 20 yrs
    40,000 233.84 257.72 282.72 315.38 25 yrs
    50,000 292.30 322.15 353.39 394.23 25 yrs
    60,000 322.09 359.73 399.18 450.76 30 yrs
    70,000 375.78 419.69 465.71 525.89 30 yrs
    80,000 429.46 479.64 532.24 601.01 30 yrs
    90,000 483.14 539.60 598.77 676.14 30 yrs
    100,000 536.82 599.55 665.30 751.27 30 yrs
    120,000 644.19 719.46 798.36 901.52 30 yrs
    130,000 697.87 779.42 864.89 976.65 30 yrs
    140,000 751.55 839.37 931.42 1,051.77 30 yrs
    150,000 805.23 899.33 997.95 1,126.90 30 yrs
    160,000 858.91 959.28 1,064.48 1,202.03 30 yrs
    170,000 912.60 1,019.24 1,131.01 1,227.15 30 yrs
    180,000 966.28 1,079.19 1,197.54 1,352.28 30 yrs
    190,000 1,019.96 1,139.15 1,264.07 1,108.33 30 yrs
    200,000 1,073.64 1,199.10 1,330.60 1,502.53 30 yrs
    220,000 1,181.01 1,391.01 1,463.67 1,652.79 30 yrs
    240,000 1,288.37 1,438.92 1,596.73 1,803.04 30 yrs
    260,000 1,395.74 1,558.83 1,729.79 1,953.29 30 yrs
    280,000 1,503.10 1,678.74 1,862.85 2,103.55 30 yrs
    300,000 1,610.46 1,798.65 1,995.91 2,253.80 30 yrs

    Figure 4
    Recent Treasury Bill Auction Results

    Term Issue Date Maturity Date Discount Rate%
    91-day 4-25-2002 7-25-2002 1.690
    91-day 4-18-2002 7-18-2002 1.680
    91-day 4-11-2002 7-11-2002 1.710
    92-day 4-04-2002 7-05-2002 1.790
    91-day 3-21-2002 6-20-2002 1.840
    91-day 3-14-2002 6-13-2002 1.825
    91-day 3-07-2002 6-06-2002 1.760
    91-day 2-28-2002 5-30-2002 1.735
    91-day 2-21-2002 5-23-2002 1.730
    91-day 2-14-2002 5-16-2002 1.715
    91-day 2-07-2002 5-09-2002 1.735
    91-day 1-31-2002 5-02-2002 1.715

    (New reference rate, 1.76 %)

    Figure 5
    Impact of Rate and Term on Original Balance of $79,000

      10 Years
    @ 8.25%

    10 Years
    @ 5.50%

    30 Years
    @ 5.50%
    Monthly
    Payment
    $968.95 $857.35 $448.55

    Total Cost
    of Loan

    $116,274.68 $102,882.91 $161,479.19

    Figure 6
    The 8 - 10 % Guideline of Loan to Income Comparison

    Annual Income

    Monthly Income Maximum Student Loan Repayment at
    8% 10% 15%
    $30,000 $2,500 $200 $250 $375
    $50,000 $4,167 $333 $417 $625
    $75,000 $6,250 $500 $625 $938
    $100,000 $8,333 $667 $833 $1,250

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