Once Your COA Reaches 6 Figures

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iowalum
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Re: Once Your COA Reaches 6 Figures

Postby iowalum » Thu Nov 18, 2010 3:34 pm

LRAP is VERY risky though. You have to make 120 consecutive payments on time and remain in a qualifying PI position for all ten years without a break. And, with IBR and any debt over 100K your payments are less than your accruing interest each month (even with a salary of 60K or so). Say you do IBR and lose your PI job after 8 years - you are stuck with WAY more debt than you would otherwise and no longer eligible for LRAP. The financial aid guys at the school I visited did a sample pay schedule for me and have made me very wary of relying on LRAP...

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homestyle28
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Re: Once Your COA Reaches 6 Figures

Postby homestyle28 » Thu Nov 18, 2010 3:38 pm

iowalum wrote:LRAP is VERY risky though. You have to make 120 consecutive payments on time and remain in a qualifying PI position for all ten years without a break. And, with IBR and any debt over 100K your payments are less than your accruing interest each month (even with a salary of 60K or so). Say you do IBR and lose your PI job after 8 years - you are stuck with WAY more debt than you would otherwise and no longer eligible for LRAP. The financial aid guys at the school I visited did a sample pay schedule for me and have made me very wary of relying on LRAP...


I know that Northwestern changed their LRAP specifically to take account of this fact. Obviously, this would be a strong incentive to finish the 10 years. The qualifying position thing isn't so tough when any 401(c)3 counts, they're a dime a dozen.

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2014
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Re: Once Your COA Reaches 6 Figures

Postby 2014 » Thu Nov 18, 2010 6:17 pm

One other thing worth mentioning is that people are not fully rational, and even in a case of NYU at sticker where someone is going to probably be fine with LRAP/IBR or Biglaw, they will not be able to sustain academic or professional success due to the anxiety that comes with 80k or whatever more debt.

In those cases going down a minitier might take their debt level to a point where their stress is reduced sufficiently to perform well academically resulting in a greater chance of success and a greater chance at holding their job once they get it. The issue is of course that it is much harder to model human emotions than it is to model fairly concrete numbers.

That also made me think how little people here seem to worry about holding onto a job. It seems like the primary concern is finding a first job whether PI or Biglaw and after that people are content to believe that they will hold it as long as they see fit. However, there is a probability that either by choice or not they will not hold the same job in five years for example and that would skew any attempted model as well.

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bk1
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Re: Once Your COA Reaches 6 Figures

Postby bk1 » Thu Nov 18, 2010 6:22 pm

2014 wrote:One other thing worth mentioning is that people are not fully rational, and even in a case of NYU at sticker where someone is going to probably be fine with LRAP/IBR or Biglaw, they will not be able to sustain academic or professional success due to the anxiety that comes with 80k or whatever more debt.

In those cases going down a minitier might take their debt level to a point where their stress is reduced sufficiently to perform well academically resulting in a greater chance of success and a greater chance at holding their job once they get it. The issue is of course that it is much harder to model human emotions than it is to model fairly concrete numbers.

That also made me think how little people here seem to worry about holding onto a job. It seems like the primary concern is finding a first job whether PI or Biglaw and after that people are content to believe that they will hold it as long as they see fit. However, there is a probability that either by choice or not they will not hold the same job in five years for example and that would skew any attempted model as well.


This sounds possible but I highly doubt that having 100k instead of 200k debt will make it feel any lighter of a load for most people.

It's not about assuming one will hold job, it's about the fact that you should do first things first. Worry about doing well on the LSAT before doing well in law school before doing well in an interview before getting a permanent offer.

spondee
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Re: Once Your COA Reaches 6 Figures

Postby spondee » Thu Nov 18, 2010 6:46 pm

iowalum wrote:LRAP is VERY risky though. You have to make 120 consecutive payments on time and remain in a qualifying PI position for all ten years without a break. And, with IBR and any debt over 100K your payments are less than your accruing interest each month (even with a salary of 60K or so). Say you do IBR and lose your PI job after 8 years - you are stuck with WAY more debt than you would otherwise and no longer eligible for LRAP. The financial aid guys at the school I visited did a sample pay schedule for me and have made me very wary of relying on LRAP...


Great point - but it depends on the LRAP. Many schools' LRAPs are much better because of details like this. For example, some only require 36 consecutive payments, then the school forgives what they've paid on your behalf.

spondee
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Re: Once Your COA Reaches 6 Figures

Postby spondee » Thu Nov 18, 2010 6:48 pm

2014 wrote:One other thing worth mentioning is that people are not fully rational, and even in a case of NYU at sticker where someone is going to probably be fine with LRAP/IBR or Biglaw, they will not be able to sustain academic or professional success due to the anxiety that comes with 80k or whatever more debt.

In those cases going down a minitier might take their debt level to a point where their stress is reduced sufficiently to perform well academically resulting in a greater chance of success and a greater chance at holding their job once they get it. The issue is of course that it is much harder to model human emotions than it is to model fairly concrete numbers.


I doubt very many people's grades are affected by the size of their loans. Once you start school your debt really isn't something you think about much; there are plenty of other things to stress you out.

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Ersatz Haderach
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Re: Once Your COA Reaches 6 Figures

Postby Ersatz Haderach » Thu Nov 18, 2010 8:23 pm

In terms of attendance decisions, there is certainly a bigger mental 'gap' between 50k and 100k than there is between 100k and 150k. Generally that's going to be due to the inverse relationship between plentiful scholarship money and national NLJ250 placement/overall prestige.

I took the money over the national prestige. My COA is, I don't know, very low. 50k at most. Only some of that will be paid for with loans. Goal was to find a market I liked and a school that would be 'good enough' at least to let me re-enter another market I have ties with if things didn't work out there/I didn't want to stay, and, obviously, not to pay for very much of anything. I would not have taken a similar offer from a T3/T4 school, nor from most T2 schools. I had a very narrow opportunity zone and sometimes think I restricted my choices too much based on my dead-set desire to avoid serious debt...but I am probably about 85% happy with my choice so far. I think more students should at least have this choice, which is why I think there should be some contraction either in schools or in class sizes.

I would have taken loans to whatever extent necessary for most T10 schools, but I was well short of that. I just didn't see the point of 100-200k in debt for most of what was in-between where I ended up and the elite.

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IAFG
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Re: Once Your COA Reaches 6 Figures

Postby IAFG » Sat Nov 20, 2010 1:26 pm

spondee wrote:
2014 wrote:One other thing worth mentioning is that people are not fully rational, and even in a case of NYU at sticker where someone is going to probably be fine with LRAP/IBR or Biglaw, they will not be able to sustain academic or professional success due to the anxiety that comes with 80k or whatever more debt.

In those cases going down a minitier might take their debt level to a point where their stress is reduced sufficiently to perform well academically resulting in a greater chance of success and a greater chance at holding their job once they get it. The issue is of course that it is much harder to model human emotions than it is to model fairly concrete numbers.


I doubt very many people's grades are affected by the size of their loans. Once you start school your debt really isn't something you think about much; there are plenty of other things to stress you out.

I think about my debt but it motivates me.

spondee
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Re: Once Your COA Reaches 6 Figures

Postby spondee » Sat Nov 20, 2010 2:50 pm

You think about your debt in relation to your grades?

I don't think I did - at least not often. Whether via salary, LRAP, or IBR, regardless of my grades, the debt will be paid off. Far more important is whether I'll enjoy my work, have good opportunities, and be proud of my acheivements - so, whether I'd get a 2L SA offer, whether I'd make LR, whether I'll get a clerkship, whether I'll graduate magna/coif, etc. These things motivate my grades.

My loans are a horror that I'll face in two years - my grades can't change that.




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