Support Thread for the 6-figure debt plunge Forum

[FiveSermon]

Going into 6 figure debt for CLS is not crazy at all.

[powerlawyer06]

Eh, relatively, I don't think that the amount of the interest is that much compared to the overall cost of the loan. Especially since I'm counting on either forgiveness after 10 years or 25 depending on which route I go and principal and interest are forgiven at the end of those. Not sure people will choose private loan alternatives though. They have pretty attractive interest rates right now (Citibank's giving me 2.25% last time I checked) which is variable but even at the height of the prime rate when I borrowed, it was like 7.75% which is not that much worse than government. With private loans though, you do not qualify for a lot of the stuff people are banking on, like LRAP, IBR, ISR, etc unless you are somehow able to get that into a federal direct consolidation loan somehow.

Yes but if you are counting on IBR or LRAP then you won't really care what the interest rate is or how much the debt figure is. All you would care about is the government and law schools keeping IBR and LRAP programs intact.

The private loan alternative is viable for someone trying to pay back their loans.

[InvictusFortis]

Still, charging interest from day one will amount to quite a bit over the three year period. I'm not sure how one, Obama, promotes education yet dismantles the vehicle that helps obtain it.

[2014]

Ya'll are crazy and need to listen to Dave Ramsey on the radio for ONE WEEK. You will think TWICE about going 200k in debt for a degree. Especially considering half the people who go to law school, don't even finish.

I've taken his Financial Peace class and a degree is an acceptable form of debt for him as is a mortgage. That is not to say that the entire 60-70k COA is acceptable to him, but I just wanted to note that he recognizes tuition as a valid reason to take on debt. The issue would be people who take on extra loans to afford a nicer apartment, nights out, good meals, new computers, etc.

I'll be joining you all in the 200k+ range, just a year later. I'll end up somewhere in the t14, probably at sticker and I'm coming out of UG with 55k or so debt and perhaps another 10? for next year's masters.

[TheStrand]

Yes but if you are counting on IBR or LRAP then you won't really care what the interest rate is or how much the debt figure is. All you would care about is the government and law schools keeping IBR and LRAP programs intact.

The private loan alternative is viable for someone trying to pay back their loans.

LRAP/IBR/ISR aren't just for someone who is trying to pay back 180k of the 200k (or whatever the numbers may be to tip one into forgiveness territory after 10/25 years). People who will always have to pay back the full amount count on LRAP/IBR/ISR as well and for many of those programs, you need to have federal loans. Additionally, regardless of whether you are paying the full amount or the monthly payments up to your 10th/25th year, you still care what the interest and debt figure is, because in tandemn with your income, those can affect your participant contribution.

If you are talking about someone paying back their loans entirely on their own, with no assistance at all, then sure yes, go for it if you think you're getting a lower interest rate. But you have the same problem, private loans generally will expect interest only payments in school, and if you make none, those get added to your principal upon graduation.

[rman1201]

Yes but if you are counting on IBR or LRAP then you won't really care what the interest rate is or how much the debt figure is. All you would care about is the government and law schools keeping IBR and LRAP programs intact.

The private loan alternative is viable for someone trying to pay back their loans.

LRAP/IBR/ISR aren't just for someone who is trying to pay back 180k of the 200k (or whatever the numbers may be to tip one into forgiveness territory after 10/25 years). People who will always have to pay back the full amount count on LRAP/IBR/ISR as well and for many of those programs, you need to have federal loans. Additionally, regardless of whether you are paying the full amount, or the monthly payments up to your 10th/25th year, you still care what the interest and debt figure is, because in tandemn with your income, those affect your participant contribution.

Not really, it caps off at $420/month for IBR at least, whether you have $150k or $450k debt. It does still matter though because the amount of principal remaining will affect your tax bomb if you're on the 25 year plan.

[TheStrand]

Not really, it caps off at $420/month for IBR at least, whether you have $150k or $450k debt. It does still matter though because the amount of principal remaining will affect your tax bomb if you're on the 25 year plan.

Sorry yeah, meant LRAP and ISR.

[AreJay711]

I think I have a new strategy out of this. Borrow from gov''t and if I get a job where I can afford the payments I'll consolidate with a private loan at a lower interest rate.

[sundance95]

Doesn't everyone consolidate their loans post graduation?

[InvictusFortis]

I think I have a new strategy out of this. Borrow from gov''t and if I get a job where I can afford the payments I'll consolidate with a private loan at a lower interest rate.

From what I understand, many private companies will not give you a fixed rate. If you can find one that does, it would be a great idea. If you can find one that uses simple interest, it would be an amazing idea.

[jayman6]

I'm looking at taking a total of $70k to attend the University of Denver. I also have about $30k in undergrad loans that my parents said they would "help" with. I'm not sure how much they'll be able to afford to pay (probably not much). Does anyone think my debt load will be unsustainable if I stay toward the top of my class?

[jpk5372]

I feel like an idiot because I have 60k from Duke (near my parents), 45 from uchi....and I STILL am in love with CLS for 200k in debt..... I go back and forth between duke and CLS on an hourly basis...

[lolschool2011]

I feel like an idiot because I have 60k from Duke (near my parents), 45 from uchi....and I STILL am in love with CLS for 200k in debt..... I go back and forth between duke and CLS on an hourly basis...

Have you tried leveraging the other scholarship yet? Maybe CLS will match at least 1/2?

[jpk5372]

I feel like an idiot because I have 60k from Duke (near my parents), 45 from uchi....and I STILL am in love with CLS for 200k in debt..... I go back and forth between duke and CLS on an hourly basis...

Have you tried leveraging the other scholarship yet? Maybe CLS will match at least 1/2?

I'm really unsure when to go about this, if I should wait until they offer something or just send in some competing offers?

[lolschool2011]

I feel like an idiot because I have 60k from Duke (near my parents), 45 from uchi....and I STILL am in love with CLS for 200k in debt..... I go back and forth between duke and CLS on an hourly basis...

Have you tried leveraging the other scholarship yet? Maybe CLS will match at least 1/2?

I'm really unsure when to go about this, if I should wait until they offer something or just send in some competing offers?

Tough one... on one hand you don't want to wait too long because they could have allocated all of their scholarship offers already, but on the other you don't want to potentially low ball yourself if they're considering offering more. The latter is probably more unlikely so I'd probably be proactive and send in the competing offers asap.

[flcath]

I had to pay off $15K from undergrad. It only took 2 years (I taught after UG), and I managed to live relatively comfortably (albeit in a low CoL area), but it was a miserable experience.

Debt isn't the only thing like this: paying to "fix" things (your car, the water heater in your house, flood damage to the hardwood floors) is the same way; it's just really miserable to pay crazy amounts of money to for something you already have.

I'm certain you all have done the math and it makes sense, but I truly don't envy you even if you're going to Yale.

[lolschool2011]

A way of looking at student loans for LS and the corresponding payment after....

Even if you take about $150,000 out for LS, your monthly payment will be about 1k/month.

That's about 12k/year.

Is it reasonable to assume that you'll be making 12k more per year after law school than if you hadn't gone?

I think it is. So I consider the extra 12/year (less if you figure the student loan interest tax deduction) an education tax, which is more than covered by the additional earnings I'll be receiving.

Over a career/lifetime, the benefit FAR outweighs the cost. So jump into the warm waters of student loan debt, there might be a little piss in the pool, but hey it's fun, everyone's splashing, come on in and enjoy!!!

[jpk5372]

I feel like an idiot because I have 60k from Duke (near my parents), 45 from uchi....and I STILL am in love with CLS for 200k in debt..... I go back and forth between duke and CLS on an hourly basis...

Have you tried leveraging the other scholarship yet? Maybe CLS will match at least 1/2?

I'm really unsure when to go about this, if I should wait until they offer something or just send in some competing offers?

Tough one... on one hand you don't want to wait too long because they could have allocated all of their scholarship offers already, but on the other you don't want to potentially low ball yourself if they're considering offering more. The latter is probably more unlikely so I'd probably be proactive and send in the competing offers asap.

Good point...Think I'll give it another week to see if anything comes in and go from there. Thanks for the advice!

[flcath]

A way of looking at student loans for LS and the corresponding payment after....

Even if you take about $150,000 out for LS, your monthly payment will be about 1k/month.

That's about 12k/year.

Is it reasonable to assume that you'll be making 12k more per year after law school than if you hadn't gone?

I think it is. So I consider the extra 12/year (less if you figure the student loan interest tax deduction) an education tax, which is more than covered by the additional earnings I'll be receiving.

Over a career/lifetime, the benefit FAR outweighs the cost. So jump into the warm waters of student loan debt, there might be a little piss in the pool, but hey it's fun, everyone's splashing, come on in and enjoy!!!

That's a 30-year repayment period dude. A 10-year repayment on $150K puts you at about $1,750/mo.

And I'm not arguing with you; in some circumstances you're right (in others not). Moreover, you'd be a fool to let some internet dudes talk you out of something like this.

I'm just saying that prior to having to actually pay off debts, I would've gone into 6-figures no problem (and I've had chosen Cornell at $160K over ND at $35K). Now, I can say for certain that I wouldn't go into 6-figure debt for any JD out there when--the way LS admissions work these days--you can just drop 6 rankings down and take a 50% scholarship.

[lolschool2011]

A way of looking at student loans for LS and the corresponding payment after....

Even if you take about $150,000 out for LS, your monthly payment will be about 1k/month.

That's about 12k/year.

Is it reasonable to assume that you'll be making 12k more per year after law school than if you hadn't gone?

I think it is. So I consider the extra 12/year (less if you figure the student loan interest tax deduction) an education tax, which is more than covered by the additional earnings I'll be receiving.

Over a career/lifetime, the benefit FAR outweighs the cost. So jump into the warm waters of student loan debt, there might be a little piss in the pool, but hey it's fun, everyone's splashing, come on in and enjoy!!!

That's a 30-year repayment period dude. A 10-year repayment on $150K puts you at about $1,750/mo.

And I'm not arguing with you; in some circumstances you're right (in others not). Moreover, you'd be a fool to let some internet dudes talk you out of something like this.

I'm just saying that prior to having to actually pay off debts, I would've gone into 6-figures no problem (and I've had chosen Cornell at $160K over ND at $35K). Now, I can say for certain that I wouldn't go into 6-figure debt for any JD out there when--the way LS admissions work these days--you can just drop 6 rankings down and take a 50% scholarship.

I hear ya, but starting out (and given average associate salary) I'd see no point to start repaying on a 10 year term immediately after graduation. I'd opt for a 20 year+ amortization to keep payments low, at least for the first 5, and then pay down more of the principle later on after making more $. Anyways - I see your point too.

[flcath]

A way of looking at student loans for LS and the corresponding payment after....

Even if you take about $150,000 out for LS, your monthly payment will be about 1k/month.

That's about 12k/year.

Is it reasonable to assume that you'll be making 12k more per year after law school than if you hadn't gone?

I think it is. So I consider the extra 12/year (less if you figure the student loan interest tax deduction) an education tax, which is more than covered by the additional earnings I'll be receiving.

Over a career/lifetime, the benefit FAR outweighs the cost. So jump into the warm waters of student loan debt, there might be a little piss in the pool, but hey it's fun, everyone's splashing, come on in and enjoy!!!

That's a 30-year repayment period dude. A 10-year repayment on $150K puts you at about $1,750/mo.

And I'm not arguing with you; in some circumstances you're right (in others not). Moreover, you'd be a fool to let some internet dudes talk you out of something like this.

I'm just saying that prior to having to actually pay off debts, I would've gone into 6-figures no problem (and I've had chosen Cornell at $160K over ND at $35K). Now, I can say for certain that I wouldn't go into 6-figure debt for any JD out there when--the way LS admissions work these days--you can just drop 6 rankings down and take a 50% scholarship.

I hear ya, but starting out (and given average associate salary) I'd see no point to start repaying on a 10 year term immediately after graduation. I'd opt for a 20 year+ amortization to keep payments low, at least for the first 5, and then pay down more of the principle later on after making more $. Anyways - I see your point too.

Yeah, federally backed debt isn't the end of world; it's pretty tame as debt goes. TLS has got it all wrong when they point to stories of destitution, "crippling" debt, etc. That shit doesn't happen under the IBR regime.

What it will be is an inconvenience for years (and possibly years and years and years) to come, that limits your ability to do things that "people like you" should/want to be doing, like saving adequately for retirement and taking your wife to the Bahamas.

I have loads of MDs in my family; obviously that's a good investment, but that doesn't mean that they aren't limited in their lifestyles b/c of the debt. And my thing is, with JDs (unlike MDs) you have a choice of whether you want to take that on.

[zonto]

Just remember to pay an extra 10% every month or an extra payment per year. Basically same principles as a mortgage. Except you'll have two.

[sparty99]

All this talk about people who want to take on $100-200k debt is foolish and naive. I am certain none of you have had to pay off a large debt before, because if you have, you'd think TWICE about going $200k in debt.

If you can get into Yale, then you can easily get a full-ride at Washington U St. Louis or another high quality institution. It's easy to say you can pay it off, people said that about mortgages. But 100% of the houses in foreclosure have a mortgage. You can't bankrupt student loans and you're not even preparing for risk. What if you don't get an associate job, what if you have a medical mishap (your appendix bursts), what if we have another recession? Whatever happens - good or bad - you will have that $200,000 leach on your neck...sucking your blood. Every paycheck you get will go first to Fannie Mae. You want $160,000 job? Well, that only comes in high price cities. Like New York, where a studio can run $2,000...

The borrower is slave to the lender!

[AreJay711]

All this talk about people who want to take on $100-200k debt is foolish and naive. I am certain none of you have had to pay off a large debt before, because if you have, you'd think TWICE about going $200k in debt.

If you can get into Yale, then you can easily get a full-ride at Washington U St. Louis or another high quality institution. It's easy to say you can pay it off, people said that about mortgages. But 100% of the houses in foreclosure have a mortgage. You can't bankrupt student loans and you're not even preparing for risk. What if you don't get an associate job, what if you have a medical mishap (your appendix bursts), what if we have another recession? Whatever happens - good or bad - you will have that $200,000 leach on your neck...sucking your blood. Every paycheck you get will go first to Fannie Mae. You want $160,000 job? Well, that only comes in high price cities. Like New York, where a studio can run $2,000...

The borrower is slave to the lender!

You're right no one has thought about it at all.

[lolschool2011]

All this talk about people who want to take on $100-200k debt is foolish and naive. I am certain none of you have had to pay off a large debt before, because if you have, you'd think TWICE about going $200k in debt.

Wow this is really uncredited... I mean really bad. So you're "certain" you say? I'm "certain" this isn't the first time you've been wrong when using the term "certain." Anyways, credit isn't a bad thing if you leverage it well.... and have you bothered to figure out what the payment on a 100k student loan over 20-30 years is? Look it up... if you think that's crippling debt, I don't think you're ready for adult land yet. Yes, no debt is better than debt, but it's absolutely stupid to make generalizations as though your shallow view applies crucially to everyone.