How does withdrawl affect student loans?

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nontrad1l
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Joined: Mon Aug 01, 2011 8:43 pm

How does withdrawl affect student loans?

Postby nontrad1l » Mon Aug 01, 2011 8:59 pm

I'm a non-trad (41 yr old) incoming 1L. I was planing on using a current break in employment to fulfill my life long ambition to attend law school. I am enrolled at T2 school with large (75%) scholarship but still need to take a small amount of loans (20K). School starts in two weeks on 8/15. Just last week I was contacted by a recruiter for a local Fortune 250 firm who saw my resume on LinkedIn. They have an opening for a position I would be perfect for starting at $95k + 25% annual bonus. I am just one of two candidates they are interviewing for the position.

Unfortunately I won't know definitively about the job until just two days before school starts. My loan distribution will already have been issued by that time. If I withdraw on the first day of school and get a full refund of all tuition are the loans simultaneously canceled? Will I owe anything (fees, etc.)? Or can I keep the money and just start making payments in six months? Any help from anyone who has dealt with this is appreciated. As much as I want to go to law school, I have a hard time turning down six-figures a year for something that is largely a personal satisfaction type of endeavor.

nontrad1l
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Joined: Mon Aug 01, 2011 8:43 pm

Re: How does withdrawl affect student loans?

Postby nontrad1l » Tue Aug 02, 2011 12:10 pm

Anybody have any thoughts????? I am seriously looking for some help.

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Bert
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Re: How does withdrawl affect student loans?

Postby Bert » Tue Aug 02, 2011 12:34 pm

My understanding is that you do not get to keep any money that has not been disbursed to you. Most student loans are disbursed in September. If you completely withdraw beforce class start, it is unlikely that student loans will have been disbursed to you prior to you withdrawing, so there will be nothing for you to keep.

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Bert
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Re: How does withdrawl affect student loans?

Postby Bert » Tue Aug 02, 2011 12:47 pm

Sorry. I just read your second paragraph.


nontrad1l wrote:Unfortunately I won't know definitively about the job until just two days before school starts. My loan distribution will already have been issued by that time. If I withdraw on the first day of school and get a full refund of all tuition are the loans simultaneously canceled? Will I owe anything (fees, etc.)? Or can I keep the money and just start making payments in six months? Any help from anyone who has dealt with this is appreciated. As much as I want to go to law school, I have a hard time turning down six-figures a year for something that is largely a personal satisfaction type of endeavor.


If your loans have been completely disbursed (I'm assuming that when you say your "loan distribution will already have been issued by that time" that you mean that all of your loans have been disbursed, including COL, and the COL loan money has been transferred to your personal account already), this is my understanding of what will likely happen:

Tuition: if your school refunds the entirety of your tuition if you withdraw before the first day of classes, then your tuition will be returned to your lender. You need to look at your school's tuition refund policy to figure this out.

School Fees: will not be returned. Most schools only refund tuition. Generally, the fees are "earned" by the school when you enrol. You need to look at your school's refund policy to figure this out.

Any Funds in Excess of Tuition and Fees: you can "keep," but you will need to repay.

nontrad1l
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Joined: Mon Aug 01, 2011 8:43 pm

Re: How does withdrawl affect student loans?

Postby nontrad1l » Tue Aug 02, 2011 1:58 pm

Thanks. That is very helpful.

duckmoney
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Re: How does withdrawl affect student loans?

Postby duckmoney » Tue Aug 02, 2011 2:33 pm

I know my school gives you the option to return loans if you take out too many, but I'm not sure what fees apply if you do this. I assume that this would minimize cost either way because interest is so high.

CanadianWolf
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Re: How does withdrawl affect student loans?

Postby CanadianWolf » Tue Aug 02, 2011 2:36 pm

Not sure that I agree with the above statement that you are allowed to "keep" excess funds if you withdraw prior to the first day of classes. I do, nevertheless, agree that you need to contact the particular law school in question to determine their refund policies.

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vanwinkle
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Re: How does withdrawl affect student loans?

Postby vanwinkle » Tue Aug 02, 2011 2:59 pm

Don't alt.




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