If biglaw or bust, are private loans the way to go?

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.

Private Loans?

Yes
5
28%
No
13
72%
 
Total votes: 18

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Kabuo
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If biglaw or bust, are private loans the way to go?

Postby Kabuo » Sat Jul 30, 2011 10:22 pm

Question in the title. If you know you're never going to be looking for PI or utilizing an LRAP, doesn't it make more sense to take private loans? I've heard of people getting offered like 2.5% interest on what would also be dischargable debt I think. I doubt I have the credit to get this on my own, and I wouldn't get my dad to cosign if the plan was net biglaw or declare bankruptcy, but I was wondering about this all day and have decided to ask TLS.

lawgod
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Joined: Mon Dec 28, 2009 3:22 pm

Re: If biglaw or bust, are private loans the way to go?

Postby lawgod » Sat Jul 30, 2011 10:23 pm

You can get dischargeable debt at 2.5%? Sounds good to me.

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DMBFan
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Joined: Sat Mar 12, 2011 4:44 pm

Re: If biglaw or bust, are private loans the way to go?

Postby DMBFan » Sat Jul 30, 2011 10:29 pm

Kabuo wrote:the plan was net biglaw or declare bankruptcy


Wow...seems like a slightly risky plan.

lawgod
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Joined: Mon Dec 28, 2009 3:22 pm

Re: If biglaw or bust, are private loans the way to go?

Postby lawgod » Sat Jul 30, 2011 10:31 pm

DMBFan wrote:
Kabuo wrote:the plan was net biglaw or declare bankruptcy


Wow...seems like a slightly risky plan.


Why not biglaw AND declare bankruptcy?

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NYC Law
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Re: If biglaw or bust, are private loans the way to go?

Postby NYC Law » Sat Jul 30, 2011 10:33 pm

ALL student loans are non-dischargeable, private or public.

rcweedman
Posts: 50
Joined: Thu Sep 16, 2010 1:09 am

Re: If biglaw or bust, are private loans the way to go?

Postby rcweedman » Sat Jul 30, 2011 10:35 pm

Kabuo wrote: people getting offered like 2.5% interest

Image

lawgod
Posts: 465
Joined: Mon Dec 28, 2009 3:22 pm

Re: If biglaw or bust, are private loans the way to go?

Postby lawgod » Sat Jul 30, 2011 10:35 pm

NYC Law wrote:ALL student loans are non-dischargeable, private or public.


Yes, what does that mean anyway?
What do they do if you don't have the money? Will they take everything you have and toss you on the street like in the old days? Will they put you in debtors prison?

bruinwang
Posts: 26
Joined: Wed Oct 28, 2009 6:14 pm

Re: If biglaw or bust, are private loans the way to go?

Postby bruinwang » Sat Jul 30, 2011 10:36 pm

Kabuo wrote:I've heard of people getting offered like 2.5% interest on what would also be dischargable debt I think.


Yup, I got 2.5% interest through Sallie Mae with my parents cosigning. I also took out some Federal Stafford, but the majority of my loans are private.

shoeshine
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Joined: Wed May 04, 2011 10:58 pm

Re: If biglaw or bust, are private loans the way to go?

Postby shoeshine » Sat Jul 30, 2011 10:36 pm

NYC Law wrote:ALL student loans are non-dischargeable, private or public.


This.

Plus even if you are big law or bust it is good to give yourself the option of doing public interest if you strike out at OCI.

lawgod
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Joined: Mon Dec 28, 2009 3:22 pm

Re: If biglaw or bust, are private loans the way to go?

Postby lawgod » Sat Jul 30, 2011 10:37 pm

bruinwang wrote:
Kabuo wrote:I've heard of people getting offered like 2.5% interest on what would also be dischargable debt I think.


Yup, I got 2.5% interest through Sallie Mae with my parents cosigning. I also took out some Federal Stafford, but the majority of my loans are private.


I want 2.5. Blazes durn it!

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Bildungsroman
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Re: If biglaw or bust, are private loans the way to go?

Postby Bildungsroman » Sat Jul 30, 2011 10:38 pm

lawgod wrote:
NYC Law wrote:ALL student loans are non-dischargeable, private or public.


Yes, what does that mean anyway?

I think this should get you started: http://lmgtfy.com/?q=How+does+Google+fucking+work%3F

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NYC Law
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Re: If biglaw or bust, are private loans the way to go?

Postby NYC Law » Sat Jul 30, 2011 10:39 pm

lawgod wrote:
NYC Law wrote:ALL student loans are non-dischargeable, private or public.


Yes, what does that mean anyway?
What do they do if you don't have the money? Will they take everything you have and toss you on the street like in the old days? Will they put you in debtors prison?


The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) (LinkRemoved) is what made private loans non-dischargeable btw.

But if you can't pay they'll just wreck your credit and get a judgment, put a lien on your assets, garnish your wages, etc etc.

shoeshine
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Joined: Wed May 04, 2011 10:58 pm

Re: If biglaw or bust, are private loans the way to go?

Postby shoeshine » Sat Jul 30, 2011 10:40 pm

lawgod wrote:
NYC Law wrote:ALL student loans are non-dischargeable, private or public.


Yes, what does that mean anyway?
What do they do if you don't have the money? Will they take everything you have and toss you on the street like in the old days? Will they put you in debtors prison?


No debtors prison. Garnish wages, liens on assets, garnish or seize bank accounts (in the worst cases).

rcweedman
Posts: 50
Joined: Thu Sep 16, 2010 1:09 am

Re: If biglaw or bust, are private loans the way to go?

Postby rcweedman » Sat Jul 30, 2011 10:42 pm

bruinwang wrote:Yup, I got 2.5% interest through Sallie Mae with my parents cosigning. I also took out some Federal Stafford, but the majority of my loans are private.

Sallie Mae FTW!
Last edited by rcweedman on Tue Aug 16, 2011 6:54 am, edited 1 time in total.

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sunynp
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Joined: Tue May 24, 2011 2:06 pm

Re: If biglaw or bust, are private loans the way to go?

Postby sunynp » Sat Jul 30, 2011 11:30 pm

How is biglaw or bust a reasonable plan? What exactly happens in the "bust" part? The debt you owe doesn't ever go away until it is repaid with interest.

I think that you need to be able to use IBR. As you know, private loans don't qualify for IBR. There are 25 year IBR plans and the 10 year plan with the qualifying job.

http://studentaid.ed.gov/PORTALSWebApp/ ... BRPlan.jsp
Last edited by sunynp on Sat Jul 30, 2011 11:31 pm, edited 1 time in total.

User avatar
Kabuo
Posts: 1114
Joined: Tue Aug 31, 2010 8:53 am

Re: If biglaw or bust, are private loans the way to go?

Postby Kabuo » Sat Jul 30, 2011 11:31 pm

NYC Law wrote:ALL student loans are non-dischargeable, private or public.


Thought I was overlooking something. Well, that's probably why more people haven't mentioned it then. And like a poster above, I do know someone who got 2.5% with a parent cosigner. Seems pretty doable if your parents have good credit. I think the reason people don't do it is to still have their debt be qualified for LRAPs and IBR, etc.

User avatar
Kabuo
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Joined: Tue Aug 31, 2010 8:53 am

Re: If biglaw or bust, are private loans the way to go?

Postby Kabuo » Sat Jul 30, 2011 11:33 pm

sunynp wrote:How is biglaw or bust a reasonable plan? What exactly happens in the "bust" part? The debt you owe doesn't ever go away until it is repaid with interest.

I think that you need to be able to use IBR. As you know, private loans don't qualify for IBR. There are 25 year IBR plans and the 10 year plan with the qualifying job.

http://studentaid.ed.gov/PORTALSWebApp/ ... BRPlan.jsp


Biglaw or bust is not my plan. If it were, I'd be playing it kind of stupid by attending WUSTL and not waiting a year for Cornell or something (IB people telling me that this is stupid anyway; it's done). I think there are quite a few self declared biglaw or bust types on these boards though.

User avatar
NYC Law
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Joined: Thu May 26, 2011 3:33 pm

Re: If biglaw or bust, are private loans the way to go?

Postby NYC Law » Sat Jul 30, 2011 11:35 pm

Kabuo wrote:
NYC Law wrote:ALL student loans are non-dischargeable, private or public.


Thought I was overlooking something. Well, that's probably why more people haven't mentioned it then. And like a poster above, I do know someone who got 2.5% with a parent cosigner. Seems pretty doable if your parents have good credit. I think the reason people don't do it is to still have their debt be qualified for LRAPs and IBR, etc.


The only other positive is that I don't think private borrowers are as unforgiving as the federal gov't if you ever do default. A default on a federal loan will follow you forever and prevent you from ever working for the government (military included). But I think the IBR fallback option is just too valuable to seriously consider a private loan. No one has good enough odds of biglaw to justify the decision.

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buckilaw
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Joined: Fri May 07, 2010 1:27 am

Re: If biglaw or bust, are private loans the way to go?

Postby buckilaw » Sun Jul 31, 2011 12:02 am

bruinwang wrote:
Kabuo wrote:I've heard of people getting offered like 2.5% interest on what would also be dischargable debt I think.


Yup, I got 2.5% interest through Sallie Mae with my parents cosigning. I also took out some Federal Stafford, but the majority of my loans are private.


baller.

User avatar
sunynp
Posts: 1899
Joined: Tue May 24, 2011 2:06 pm

Re: If biglaw or bust, are private loans the way to go?

Postby sunynp » Sun Jul 31, 2011 12:12 am

I think the federal gov't has more payment plans to help you avoid default. I know there are ways to get forbearance and deferments on gov't debt. But the gov't will go after money to be repaid once you are in default. The govt can garnish wages directly without a court order.

Private loans go into default quicker and have less options. But private lenders may be willing to negotiate and take a steep discount on the money owed after you default.

For general info on what might happen in default:
http://www.finaid.org/loans/default.phtml

Of course if your parents are your co-signers and you default, they can be held liable for your loans.

dkt4
Posts: 316
Joined: Sat Feb 05, 2011 6:33 pm

Re: If biglaw or bust, are private loans the way to go?

Postby dkt4 » Mon Aug 01, 2011 12:58 am

most private loans are tied to either LIBOR or the prime rate, so they're really not 2.5% forever.

firemed
Posts: 1195
Joined: Wed Aug 11, 2010 7:36 pm

Re: If biglaw or bust, are private loans the way to go?

Postby firemed » Mon Aug 01, 2011 1:07 am

NYC Law wrote:ALL student loans are non-dischargeable, private or public.


Oh... yeah... so I was going to pwn you.... but my example was made invalid by the 2005 law you linked to... so.... yeah... nevermind. :oops:




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