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20141023
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Postby 20141023 » Fri Mar 15, 2013 10:34 pm

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Last edited by 20141023 on Sat Feb 14, 2015 9:21 pm, edited 3 times in total.

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Xs20
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Re: Debt Pwnage Calculator

Postby Xs20 » Fri Mar 15, 2013 10:44 pm

Guh. I wish excel for mac supported ActiveX. Thanks for making this, though

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clouded.memory
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Re: Debt Pwnage Calculator

Postby clouded.memory » Sat Mar 16, 2013 12:13 am

This is beautiful. I was just in the middle of using your earlier spreadsheet from the UChi thread as a model for my own calculations, but this is much better, and faster, to boot! Thank you!

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guano
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Re: Debt Pwnage Calculator

Postby guano » Sat Mar 16, 2013 12:25 am

this is better
use in conjunction with this

edit: that being said, nicely done*
*I've not checked the formulas or the math

20141023
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Re: Debt Pwnage Calculator

Postby 20141023 » Sat Mar 16, 2013 10:35 am

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Last edited by 20141023 on Sat Feb 14, 2015 9:21 pm, edited 1 time in total.

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Xs20
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Re: Debt Pwnage Calculator

Postby Xs20 » Sat Mar 16, 2013 10:38 am

kappycaft1 wrote:I suppose that this would be a good place to ask you TLSers another question: One of my friends who recently graduated law school said that he was able to borrow loans by having his family become his "sponsor" in the sense that when he borrowed his loans, they vouched for him and he was able to get them at a lower interest rate (by basically saying that they would pay for them if he defaulted). He told me that basically anyone can do this for you as long as they are financially well-off. This is the first time that I'd ever heard of anything like this; does anyone know more details about this sort of thing?

Home equity loan?

dixiecupdrinking
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Re: Debt Pwnage Calculator

Postby dixiecupdrinking » Sat Mar 16, 2013 10:42 am

kappycaft1 wrote:I suppose that this would be a good place to ask you TLSers another question: One of my acquaintances who recently graduated law school said that he was able to borrow loans by having his family become his "sponsor" in the sense that when he borrowed his loans, they vouched for him and he was able to get them at a lower interest rate (by basically saying that they would pay for them if he defaulted). He told me that basically anyone can do this for you as long as they are financially well-off. This is the first time that I'd ever heard of anything like this; does anyone know more details about this sort of thing?

Must have been private loans. The rates can vary depending on whether you have a cosigner.

Honestly, the conventional wisdom is to avoid private loans but I am curious if I should have gone this route, at least in lieu of those 8% GradPLUS loans. It looks like variable rate private loans can be as low as around 3.5%. You do probably need a cosigner to get the rates that low.

florida1949
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Re: Debt Pwnage Calculator

Postby florida1949 » Sat Mar 16, 2013 10:44 am

this is awesome, thanks kappycaft1.

20141023
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Re: Debt Pwnage Calculator

Postby 20141023 » Sat Mar 16, 2013 10:46 am

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Last edited by 20141023 on Sat Feb 14, 2015 9:21 pm, edited 1 time in total.

NYstate
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Re: Debt Pwnage Calculator

Postby NYstate » Sat Mar 16, 2013 10:49 am

Private loans are not available for LRAP, PAYE or IBR or any kind of deferment. None of the " protections" that come from the govt will apply. If your co- signer or guarantor is happy to be responsible for paying your loans should you not get a job, then it would be fine. Private loans are dischargable in bankruptcy but I doubt your parents will want to go that route.

There are other reasons as well. I don't know all of them. I guess one is that you can't benefit from school loan payment plans either.

If your parents will cosign the loan, why not borrow the money from them and repay them directly? Why use a bank?
Last edited by NYstate on Sat Mar 16, 2013 11:11 am, edited 1 time in total.

dixiecupdrinking
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Re: Debt Pwnage Calculator

Postby dixiecupdrinking » Sat Mar 16, 2013 11:09 am

NYstate wrote:Private loans are not available for LRAP, PAYE or IBR or any kind of deferment. If your co- signer or guarantor is happy to be responsible for paying your loans should you not get a job, then it would be fine.

This is why I didn't do it. If everything goes well, you pay less on the private loans, but if shit hits the fan, you have less of a safety net on paying it back.

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Lincoln
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Re: Debt Pwnage Calculator

Postby Lincoln » Sat Mar 16, 2013 11:16 am

Along the lines of what's been said above, GradPlus loans have some advantages compared to private loans.

Repayment on private loans typically starts immediately, whereas payment on GradPlus loans starts six months after graduation (which is right after many BigLaw jobs start). Although GradPlus loans accrue interest during the time you are in school, the interest isn't compounded (meaning there's no additional interest applied to unpaid interest) until repayment starts. If you ever lose your job or get a lower-paying job, you can reduce your monthly payment in various ways (e.g. IBR). Conversely, if you feel like you can pay more, you can pre-pay and direct such pre-payment towards your high-interest loans. Neither of these options carry a penalty, whereas most private loans punish you for paying early.

why not borrow the money from them and repay them directly? Why use a bank?


Not all wealthy people are liquid enough to front the amount of cash needed for law school. Many people have their equity tied up in their home or other non-cash assets. These can be excellent security for a loan. Even if this is not an issue, some wealthy people are able to obtain loans at lower interest rate than their ROI on invested cash. See, e.g., Mark Zuckerberg taking out a mortgage when he bought his house.

20141023
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Re: Debt Pwnage Calculator

Postby 20141023 » Sat Mar 16, 2013 11:24 am

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Last edited by 20141023 on Sat Feb 14, 2015 9:21 pm, edited 2 times in total.

NYstate
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Re: Debt Pwnage Calculator

Postby NYstate » Sat Mar 16, 2013 11:38 am

Lincoln wrote:Along the lines of what's been said above, GradPlus loans have some advantages compared to private loans.

Repayment on private loans typically starts immediately, whereas payment on GradPlus loans starts six months after graduation (which is right after many BigLaw jobs start). Although GradPlus loans accrue interest during the time you are in school, the interest isn't compounded (meaning there's no additional interest applied to unpaid interest) until repayment starts. If you ever lose your job or get a lower-paying job, you can reduce your monthly payment in various ways (e.g. IBR). Conversely, if you feel like you can pay more, you can pre-pay and direct such pre-payment towards your high-interest loans. Neither of these options carry a penalty, whereas most private loans punish you for paying early.

why not borrow the money from them and repay them directly? Why use a bank?


Not all wealthy people are liquid enough to front the amount of cash needed for law school. Many people have their equity tied up in their home or other non-cash assets. These can be excellent security for a loan. Even if this is not an issue, some wealthy people are able to obtain loans at lower interest rate than their ROI on invested cash. See, e.g., Mark Zuckerberg taking out a mortgage when he bought his house.



It never occurred to me that parents would be willing to risk their house to pay for their kids law school. I guess they don't know the job market as well as we do.
Still I think Zuckerberg is a bad example. He can probably put his hands on law school tuition money without any effort.

kappycaft1: have you looked at the Georgetown calculator? They include interest.

20141023
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Re: Debt Pwnage Calculator

Postby 20141023 » Sat Mar 16, 2013 11:48 am

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Last edited by 20141023 on Sat Feb 14, 2015 9:21 pm, edited 1 time in total.

NYstate
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Re: Debt Pwnage Calculator

Postby NYstate » Sat Mar 16, 2013 12:00 pm

kappycaft1 wrote:
NYstate wrote:kappycaft1: have you looked at the Georgetown calculator? They include interest.

Yeah, I've seen Georgetown's as well as Michigan's.

Based on Lincoln's comments above, though, is it true that interest on interest isn't accrued during the time you are in law school and for the 6 months thereafter? If so, is this true only for the Federal Direct PLUS Loans, or is it true for both the Federal Direct PLUS loans and the Federal Direct Unsubsidized Loans?


I can't figure this one out. I don't have debt or loans.Why not just call the financial aid office at Chicago to get the answer?

20141023
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Re: Debt Pwnage Calculator

Postby 20141023 » Sat Mar 16, 2013 12:09 pm

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Last edited by 20141023 on Sat Feb 14, 2015 9:22 pm, edited 1 time in total.

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guano
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Re: Debt Pwnage Calculator

Postby guano » Sat Mar 16, 2013 12:13 pm

The issue with private loans is that they usually aren't fixed rate, but are indexed, which means that while the interest rate might be low now, if the economy picks up and rates start rising (or, the political will to keep rates low dissipates, or any of a number of other reasons), the rate on your loan could spike.


As for Zuckerberg, a number of wealthy people have mortgages they don't need because the interest rate is low and the payments are tax deductible, so if they have reasonable investment opportunities, they will do this (it's called leveraging)

NYstate
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Re: Debt Pwnage Calculator

Postby NYstate » Sat Mar 16, 2013 12:17 pm

kappycaft1 wrote:
NYstate wrote:I can't figure this one out. I don't have debt or loans.Why not just call the financial aid office at Chicago to get the answer?

Because they're not open until Monday, and I want to update the sheet this weekend while I have the time of possible. :mrgreen:

Plus, there are enough people with student loans on TLS that I figure that someone understands the state of their debt well enough to answer this question.

The law just changed last July. I'm not sure how well people know this shit.

20141023
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Re: Debt Pwnage Calculator

Postby 20141023 » Sat Mar 16, 2013 12:20 pm

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Last edited by 20141023 on Sat Feb 14, 2015 9:22 pm, edited 1 time in total.

dixiecupdrinking
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Re: Debt Pwnage Calculator

Postby dixiecupdrinking » Sat Mar 16, 2013 12:27 pm

kappycaft1 wrote:
NYstate wrote:The law just changed last July. I'm not sure how well people know this shit.

Hopefully at least one person among a group of people hoping to become lawyers understands the law, especially when it directly affects how much money they will owe. If not, maybe the "lawyers are bad at math" argument is true. :lol:

I am fairly confident that interest accrues but does not compound while you are in school; it's then capitalized when you enter repayment and from that point forward becomes part of your principle balance on which interest accrues.

I actually think that federal loans never compound interest, even in repayment, though I am less confident on that.

I can't (read: don't care enough to) point to any language to substantiate these claims at the moment.

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smaug_
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Re: Debt Pwnage Calculator

Postby smaug_ » Sat Mar 16, 2013 12:30 pm

I'm probably outing the extent to which I don't understand this stuff, but it was my understanding that interest accrues on grad plus loans while you're in school but does not capitalize until repayment starts.

ETA: I just got ninjaed. My understanding is the same as dixiecupdrinking's (though I'm less sure about the never compounding part.)

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JXander
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Re: Debt Pwnage Calculator

Postby JXander » Sat Mar 16, 2013 12:43 pm

This is fantastic. Thank you very much for putting this together.

NYstate
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Re: Debt Pwnage Calculator

Postby NYstate » Sat Mar 16, 2013 12:54 pm

kappycaft1 wrote:
NYstate wrote:The law just changed last July. I'm not sure how well people know this shit.

Hopefully at least one person among a group of people hoping to become lawyers understands the law, especially when it directly affects how much money they will owe. If not, maybe the "lawyers are bad at math" argument is true. :lol:

My feeling is that most people don't even want to know their loan balance. Or try to know the exact amount of their monthly payment. Most people arent really adding up their 3 years of debt before they go. As long as the loans cover it, they figure they will worry about it later. Just my impression. I'm willing to bet that most the current students don't know their current loan balance.

J90
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Re: Debt Pwnage Calculator

Postby J90 » Sat Mar 16, 2013 1:01 pm

I really like this, I just can't use it on my Mac (Office 2008 for Mac). :(




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