CCN at sticker - whats the worst case scenario look like?

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rustyburger2
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CCN at sticker - whats the worst case scenario look like?

Postby rustyburger2 » Wed Feb 25, 2015 9:37 pm

Fully financed by student loans.

Everyone talks about how risky that is, so my question is this: what exactly does the worst case scenario lifestyle look like?

By this I mean assume graduate and pass the bar, but you don't land biglaw or any other high paying job. You're 300k in debt, so what exactly do you do?

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Ron Don Volante
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Re: CCN at sticker - whats the worst case scenario look like?

Postby Ron Don Volante » Wed Feb 25, 2015 9:41 pm

Image

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twenty
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Re: CCN at sticker - whats the worst case scenario look like?

Postby twenty » Wed Feb 25, 2015 9:47 pm

rustyburger2 wrote:You're 300k in debt, so what exactly do you do?


I don't get what you're asking. When you borrow money, you either have to pay it back, or default. There are huge repercussions to defaulting on a federal student loan (like never being able to get a federal job, etc. etc.) Maybe you do PAYE for 25 years and get hit with a massive tax bomb at the end based on a two million dollar-plus year of realized income.

Sell meth? Renounce citizenship and move to a country where they don't have internet?

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bearsfan23
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Re: CCN at sticker - whats the worst case scenario look like?

Postby bearsfan23 » Wed Feb 25, 2015 9:52 pm

twenty wrote:
rustyburger2 wrote:You're 300k in debt, so what exactly do you do?


I don't get what you're asking. When you borrow money, you either have to pay it back, or default. There are huge repercussions to defaulting on a federal student loan (like never being able to get a federal job, etc. etc.) Maybe you do PAYE for 25 years and get hit with a massive tax bomb at the end based on a two million dollar-plus year of realized income.

Sell meth? Renounce citizenship and move to a country where they don't have internet?



1. PAYE is 20 years

2. WTF is a "two million dollar-plus year of realized income". If you make partner type money, you're not going to have trouble paying back sticker. If not, INTEREST DOES NOT CAPITALIZE UNDER PAYE. I have no idea why some posters can't understand this.

rustyburger2
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Re: CCN at sticker - whats the worst case scenario look like?

Postby rustyburger2 » Wed Feb 25, 2015 10:13 pm

twenty wrote:
rustyburger2 wrote:You're 300k in debt, so what exactly do you do?


I don't get what you're asking. When you borrow money, you either have to pay it back, or default. There are huge repercussions to defaulting on a federal student loan (like never being able to get a federal job, etc. etc.) Maybe you do PAYE for 25 years and get hit with a massive tax bomb at the end based on a two million dollar-plus year of realized income.


I'm asking for a description of what the lifestyle implications of those options are. Am I going to be living in poverty? Forced into public interest law? Homeless?

What the hell does the worst case scenario actually look like?

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ballcaps
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Re: CCN at sticker - whats the worst case scenario look like?

Postby ballcaps » Wed Feb 25, 2015 10:22 pm

rustyburger2 wrote:Basically I'm asking: what the hell does the worst case scenario actually look like?


your life is going to look like your current life, but + jd + 200k debt.

wtf do you mean "what does that look like?"?

the debt never goes away and you have to keep paying it every month. it is an incessant drain on your financial resources. if you don't have a job or run out of money, you default.

and defaulting is very, very bad:
https://studentaid.ed.gov/repay-loans/default

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Ron Don Volante
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Re: CCN at sticker - whats the worst case scenario look like?

Postby Ron Don Volante » Wed Feb 25, 2015 10:24 pm

**your life now except unemployable in whatever field you're currently in/have options in

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Clemenceau
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Re: CCN at sticker - whats the worst case scenario look like?

Postby Clemenceau » Wed Feb 25, 2015 10:25 pm

rustyburger2 wrote:Forced into public interest law?


The horror!!

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twenty
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Re: CCN at sticker - whats the worst case scenario look like?

Postby twenty » Wed Feb 25, 2015 10:34 pm

bearsfan23 wrote:1. PAYE is 20 years


Considering there's already talk about extending it to 25 years for borrowers above the aggregate loan limit for independent undergraduate students (which is $57k currently), I wouldn't count on this. Alternatively, 20 years is still a ridiculously long time.

2. WTF is a "two million dollar-plus year of realized income". If you make partner type money, you're not going to have trouble paying back sticker. If not, INTEREST DOES NOT CAPITALIZE UNDER PAYE. I have no idea why some posters can't understand this.


1) No.

worst case scenario . . . you don't land biglaw or any other high paying job.


2) The "no capitalized interest" rule only applies if the borrower meets the partial financial hardship requirement. Cross your fingers to hope that Congress doesn't figure out that people making 300k+ a year as doctors are able to claim PFH under this rule. But even if the interest doesn't capitalize and the rules on that never change, that's still between 600k and 800k in forgiveness depending on how bad "worst case scenario" is.

I'm asking for a tangible description of what that lifestyle would look like. Saying I have to either default on the loan or do PAYE for 25 years doesn't really explain much in terms of the actual implications of that. Am I going to be living in poverty? Forced into public interest law? Homeless?


I mean, I've met people that have defaulted on federal student loans and became permanently homeless, so yeah, that is an option I guess. Considering that people who desperately want public interest law often can't get it, chances are nothing's going to force you into it. Defaulting on federal student loan debt also makes you permanently ineligible for federal employment (in almost all cases).





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