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Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
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bk1
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby bk1 » Fri May 25, 2012 1:36 am

jurisx wrote:yeah except being a lawyer and being better off from that point forward than someone without it (in a worse case scenario where you don't do better, and everyone who can breathe will)


You are a terrible and incoherent troll.

jurisx
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby jurisx » Fri May 25, 2012 1:37 am

bk1 wrote:
jurisx wrote:yeah except being a lawyer and being better off from that point forward than someone without it (in a worse case scenario where you don't do better, and everyone who can breathe will)


You are a terrible and incoherent troll.


Yes the fact that it will result in a JD and the fact that most people over multiple decades will get increased income, all madness, sure madness, :roll:

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RedBirds2011
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby RedBirds2011 » Fri May 25, 2012 1:40 am

jurisx wrote:
bk1 wrote:
jurisx wrote:yeah except being a lawyer and being better off from that point forward than someone without it (in a worse case scenario where you don't do better, and everyone who can breathe will)


You are a terrible and incoherent troll.


Yes the fact that it will result in a JD and the fact that most people over multiple decades will get increased income, all madness, sure madness, :roll:



Keep trying to convince yourself that Cooley is a good investment I guess...

jurisx
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby jurisx » Fri May 25, 2012 1:41 am

Why do you assume everyone who disagrees with you goes to Cooley? Are you that lazy?

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby RedBirds2011 » Fri May 25, 2012 1:45 am

jurisx wrote:Why do you assume everyone who disagrees with you goes to Cooley? Are you that lazy?


I don't assume you specifically go to Cooley. But the type of person, PRIOR to matriculating, who tries to argue "don't worry IBR is there, be happy" is typically trying to argue their case for attending a less than stellar school for a less than stellar scholarship. HTH

jurisx
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby jurisx » Fri May 25, 2012 1:48 am

RedBirds2011 wrote:
jurisx wrote:Why do you assume everyone who disagrees with you goes to Cooley? Are you that lazy?


I don't assume you specifically go to Cooley. But the type of person, PRIOR to matriculating, who tries to argue "don't worry IBR is there, be happy" is typically trying to argue their case for attending a less than stellar school for a less than stellar scholarship. HTH


If you pay attention I am more saying so for the guys already in like the guy with the 2.7 getting ready to start 2L at a 2nd Tier school and every one else telling him to quit, or this poor sap who already is done and sunk in debt and giving him hope to prevent being put on suicide watch.

If you can do better, do better. Duh. Always, in everything in life. Duh.

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RedBirds2011
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby RedBirds2011 » Fri May 25, 2012 1:56 am

jurisx wrote:
RedBirds2011 wrote:
jurisx wrote:Why do you assume everyone who disagrees with you goes to Cooley? Are you that lazy?


I don't assume you specifically go to Cooley. But the type of person, PRIOR to matriculating, who tries to argue "don't worry IBR is there, be happy" is typically trying to argue their case for attending a less than stellar school for a less than stellar scholarship. HTH


If you pay attention I am more saying so for the guys already in like the guy with the 2.7 getting ready to start 2L at a 2nd Tier school and every one else telling him to quit, or this poor sap who already is done and sunk in debt and giving him hope to prevent being put on suicide watch.

If you can do better, do better. Duh. Always, in everything in life. Duh.



lol you say duh a lot. But seriously, I actually agree here. If you are already in this situation and have to rely on IBR, its not the end of the world. you can make it work if you plan ahead and are smart about money. But it certainly doesn't mean it isn't tough or that it doesn't suck. Just don't persuade a 0L to take on a bunch of debt thinking IBR is a great fall back plan.

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby timbs4339 » Fri May 25, 2012 3:01 am

DiggyHopeful wrote:
timbs4339 wrote:
DiggyHopeful wrote:The doom and gloom espoused on these boards is downright hilarious. Yes, a lot of people are taking out ridiculously large amounts of loans, but with IBR existing as an option, I really don't see how it's that enormous of a risk. The way I see it, the average attorney where I live (San Francisco) is making about 105k a year. No matter what, that is undoubtedly enough money to pay off your loans comfortably and live a pretty good life (especially if you're significant other makes comparable money ---- in that case, you're living VERY comfortably). Granted, San Francisco may not be as expensive as midtown manhattan, but I doubt anywhere else in the country is more expensive than SF (again, save for possibly Mahattan).

Even in the (not all that unlikely considering the current state of the economy) scenario where you're only making $50,000 a year, if you use IBR that means that only 5 thousand dollars a year is going toward loans and the rest is forgiven after 20 years (and if you're really smart/lucky you work for a nonprofit/government job and it's all discharged tax free after 10 years). None of these scenarios sound THAT bad to me. I know for a fact that in San Francisco, probably the second most expensive city in the country, you can live very comfortably even making "only" 50 grand a year and paying back 5k a year in loans --that includes eating out, traveling, partying, whatever (you know, the things that actually make life enjoyable). I know some people are averse to the idea of carrying debt on them, but you have to understand that there is more to life than living debt free. What good is it to say you're debt free when you've spent you're entire life living like a troll while the world around you enjoys themselves?

Some people are claiming it's "likely" the government will end the IBR program but I see this as highly unlikely. Who really thinks that the government would renege an option it gave people when they entered into the loans? Also, this would undoubtedly cause the amount of defaults to skyrocket, putting a serious drag on the economy, and no president would want that on their own watch.

Also, even assuming that you have to treat the discharged amount as taxable income after 20 years, you would still come out greatly ahead by doing IBR. Let's say that after 20 years you get $100k discharged. That means that if you end up paying 30k in taxes after 20 years, you still come out ahead by about 70 grand. Not a bad option from the government if you ask me...and that's not even considering the fact that 20 years from now 30 grand will be a lot less than it is today because of inflation. Here's an idea: divide 30,000 by 240 payments (20 years) and add it to your monthly amount, then stick it in a savings account. That's only an extra $125 a month.

Tl; dr: with IBR around, don't worry, be happy.


A few points:

1) Your analysis misses the massive interest burden that comes from taking out 200K in loans. That's 10-15K per year in interest payments. Luckily, it doesn't capitalize under IBR so you can let it accrue. But imagine you make enough money to pull out of IBR- you'll now owe that interest. You're damned if you do damned if you don't- if you start creeping up out of IBR you could be looking at an even worse lifestyle if your new position has only a marginally better salary.

IBR was not created with 150K-200K of law school debt in mind. The kind of debt law students are carrying is easily within the top 1-2% of student debtholders. I've run the numbers and it does not look good.

2) You won't be able to live like a student forever. Most people graduating law school will be between 25-27 years old. That means they will start looking for a spouse, maybe trying to start families within 5 years of graduation. What bank is going to give a person with over 100K in student loan debt a mortgage? What about a small business loan? That debt is paralyzing. Then you have kids- that's a huge expense. Living on 20K per year forever is not a good plan. Many people don't want to wait until they are 40 to get married and have kids- I sure as hell don't.

3) Why do you think it is highly unlikely IBR won't go away? One half of the current political system in this country favors severe austerity. They are not going to cut defense, and they are not going to cut entitlements. They are going to cut drop in the bucket discretionary spending programs like IBR. The Republicans just recently held student loan interest rates hostage against a program to fucking vaccinate kids and the Democrats caved. Do you really think they give a crap about IBR?


I appreciate your willingness to engage this discussion and toss ideas around, though I have to respectfully disagree with some of your points.

1. While it's certainly true that you will accrue more interest under IBR, I haven't seen any language that says you HAVE to come out of IBR once you hit a certain salary. In that case, even if your salary increased only marginally, it would all be proportional (say you make $70000 a year instead of $60000 --your monthly payment should in theory only go up by 10% of the total increase in DISCRETIONARY income). If your strategy under IBR is simply to run out the clock until you hit the 20 year mark of making payments, then ultimately how much interest accrues on the loan should make no difference to you -- no matter what, a maximum of 10% of your discretionary income will go toward your loans and after 20 years (or 10 years if you work for the government or public service) they'll vanish and you'll be debt free. Of course, in some cases, if you make a ton of money, it would be advantageous not to do IBR since IBR would prolong your payoff time and thus you'll pay more in interest (this would be for people who would pay off their loans in less than 20 years even under IBR and would not have any debt leftover after 20 years to actually get discharged ----I'm thinking this would apply to higher earners).

2. I see no reason why someone can't live a comfortable life, including raising kids and buying a house when only 10% of your monthly discretionary income is going toward loans. I don't know what part of the country you live in, but here in San Francisco where one bedroom condos can easily cost 5-600k dollars or more, it's not all that crazy or unreasonable for a bank to loan a house to someone that already has a 100k in debt (my guess is that banks would look at how stable your job is by analyzing your work history and would definitely take into account the fact that you only pay 10 percent of your discretionary income toward loans). A bank would feel reassured that no matter what, you will only have to pay 10 percent of your discretionary income toward student loans (which makes it all the more likely you'll make your mortgage payments).

3. As far as I know, there is no guarantee IBR would stay around. But, call me crazy, I just refuse to believe that congress would destroy a program that many people believed in before going into these loans. You say that this program wasn't created with law students in mind, but I beg to differ. I think this program is EXACTLY for the type of profession that requires high debt load for a job that doesn't pay much (think public interest lawyers, doctors, teachers, etc.).


Why do you refuse to believe that Congress would destroy this program? Again, one half of the entire fucking government believes in severe austerity. Paul Ryan's budget, which the current presidential candidate of the Republican Party endorses, would roll back IBR. Where is the interest group fighting for students and young people to balance out this influence? The current statements made by the Republican Party and the actions of the Democratic Party actually seem to make it more likely than not that if the Republicans get into power within the next few years we will see the dismantling of IBR.

IBR is clearly not created for law students carrying 150K in debt. Otherwise it would have addressed the IBR death spiral other posters have pointed out, where interest is accruing must faster than principal. Note that IBR is not actually paying off your loans- just capping payments. On 200K of student loans the amount paid back would be minimal while the interest accrued would be extremely high.

I just see no reason to put yourself through this uncertainty when it is not proven that someone who graduates bottom of the class from a lower tier law school is going to make any more than they could with a BA and a few years of work experience. Why hamstring yourself with so much debt for a 50K job? If you want to live on 70K a year a few years down the line, better to do it without 170K and the juice running at 7.9%.

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby Anonymous Loser » Fri May 25, 2012 3:36 am

DiggyHopeful wrote:
Anonymous Loser wrote:
DiggyHopeful wrote:How is this possible?


You raised this issue above:

DiggyHopeful wrote: IBR would prolong your payoff time and thus you'll pay more in interest


Right, but you said that under any possible scenario where someone gets more than $100,000 discharged, they would end up paying more under IBR than under the standard repayment plan. Here me out on why I personally think that might not be the case.

Let's say you make $50,000 a year under IBR (theoretically it would be counted as less because IBR is calculated as anything over $150,000 above the poverty line I believe, but for the sake of simplicity I'll leave it as is).

In that case, that means you will pay $5,000 a year for 20 years, for a total of $100,000. If you owed $200,000, and you paid $100,000, then you just paid $100,000 out of pocket and got a $100,000 discharged.

Now, let's say you had $200,000 of student loan debt, and did the standard repayment at 10 years. That means that you would have to make 120 payments at $2,301.61, for a grand total of $276,193.20.

So in the theoretical IBR scenario, over 20 years you pay $100,000 and get $100,000 discharged. Under the standard repayment, you just pay $276,193.20.

How on earth is IBR not the better option if you make payments for 20 years? I am truly curious, as I am not an expert on student loans, and would love to hear more advice from anyone on this topic


I'm sure you realize that there is a difference between "any realistic scenario that results in forgiveness of $100,000" and "any possible scenario where someone gets more than $100,000 discharged."

I responded to a scenario you created in which $100,000 was forgiven. Now, you've created a new scenario in which well over $350,000 will be forgiven. In this new scenario, the debt load is doubled, and the income cut nearly in half. So yes, you are correct: if you change the facts, the result is different, and IBR can be the better option.

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby Real Madrid » Fri May 25, 2012 5:54 am

miamiheat


You are what is wrong with America.

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manofjustice
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby manofjustice » Wed May 30, 2012 10:47 am

Aberzombie1892 wrote:Don't take out $210k for law school.


This Is The Credited Response.

Read the following carefully OP. It says all you (and other 0Ls) need to know:

It's not just 210. It's over 260.
(-source: I've calculated stickers at T10s for my own purposes).

See, what everyone misses is: a) your Grad Plus loans (the bulk of your debt) will accrue interest capitalized annually while you are in school and b) your Grad Plus loans carry an origination fee of a whopping 4%.

Bottom line OP? Standard 10 year repayment term = $3128.39 per month pre-tax. After tax (that's Federal and a significant State, if you're in NYC), and you're deducting a lot of money from your pay.

But, 10 years is too long to expect to be in Big Law. It's up or out after around 6 to 8 years, best case--but that's if you can stand it. You, like many other smart ambitious people, might want out after year 1 or 2.

After about a year, you're marked either for the "up" or the "out" track, in general. If you're marked for the "out" track, you probably won't be able to hold on for 6 to 8 years.

You'll want to be done with your loans in about 4 years. So, you will need to double your payments, and guess what? No, it's not that you "can't pay back your loans"...sure you can. You just make about 55K after everything. Yippie!!!

All this excludes undergraduate debt.

Obviously, if you pay sticker and fail to get Big Law, you will not pay back your loans, ever.

Good luck OP.

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby admisionquestion » Wed May 30, 2012 10:59 am

Except... I have already presented math that shows a budget I am comfortable living with that will pay off 200K in debt after 3 years. So Its okay that Im "forced out" after 6.

Also and more importantly, IBR + LRAP = NOT SCREWED if you dont get biglaw...

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby manofjustice » Wed May 30, 2012 12:12 pm

admisionquestion wrote:Except... I have already presented math that shows a budget I am comfortable living with that will pay off 200K in debt after 3 years. So Its okay that Im "forced out" after 6.

Also and more importantly, IBR + LRAP = NOT SCREWED if you dont get biglaw...


I think your budget is elegant and I have printed it out for my records. Your payoff point is about 10 months too early according to my numbers, but no biggie.

You can do a 4 year payoff living quite frugally. But that is the choice: 4 years of Big Law without its immediate benefits and all of its immediate burdens.

IBR isn't a choice for this reason: you will eventually make enough money to pay off your loans at standard, living frugally. So you'll do that, continuing to live frugally. You will have to do this, or else pay a large additional amount in interest. Why? While you can "stay in" IBR as your income rises, your only benefit to doing so is the loan cancelation after 25 years--your payments will still be high. 15 years beyond the 10 year standard is plenty of time for the federal government to collect substantially more money from you than you otherwise would have owed, as interest accrues and capitalizes.

To shift gears a bit: most people in at a T14 are in at a (well-placing) T11-20/30 with $$$. Some data seriously suggest the latter is the clear choice. Check it: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1640058 The study doesn't spend a word discussing debt, only grades, prestige, and incomes. Add debt and the choice might be even clearer.

If more students would take well-placing T11-20/30 with $$$, law professors would earn less, the market price of a legal education would go down, and students could breath and (gasp) get married, buy a house, and have children before they're 30, like their (oddly less affluent?) parents.

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby rinkrat19 » Wed May 30, 2012 12:16 pm

manofjustice wrote:
admisionquestion wrote:Except... I have already presented math that shows a budget I am comfortable living with that will pay off 200K in debt after 3 years. So Its okay that Im "forced out" after 6.

Also and more importantly, IBR + LRAP = NOT SCREWED if you dont get biglaw...


I think your budget is elegant and I have printed it out for my records. Your payoff point is about 10 months too early according to my numbers, but no biggie.

You can do a 4 year payoff living quite frugally. But that is the choice: 4 years of Big Law without its immediate benefits and all of its immediate burdens.

IBR isn't a choice for this reason: you will eventually make enough money to pay off your loans at standard, living frugally. So you'll do that, continuing to live frugally. You will have to do this, or else pay a large additional amount in interest. Why? While you can "stay in" IBR as your income rises, your only benefit to doing so is the loan cancelation after 25 years--your payments will still be high. 15 years beyond the 10 year standard is plenty of time for the federal government to collect substantially more money from you than you otherwise would have owed, as interest accrues and capitalizes.

To shift gears a bit: most people in at a T14 are in at a (well-placing) T11-20/30 with $$$. Some data seriously suggest the latter is the clear choice. Check it: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1640058 The study doesn't spend a word discussing debt, only grades, prestige, and incomes. Add debt and the choice might be even clearer.

If more students would take well-placing T11-20/30 with $$$, law professors would earn less, the market price of a legal education would go down, and students could breath and (gasp) get married, buy a house, and have children before they're 30, like their (oddly less affluent?) parents.
Congratulations on finding the proper venue for your crusade.

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby 20130312 » Wed May 30, 2012 12:18 pm

manofjustice wrote:I think your budget is elegant and I have printed it out for my records. Your payoff point is about 10 months too early according to my numbers, but no biggie.

You can do a 4 year payoff living quite frugally. But that is the choice: 4 years of Big Law without its immediate benefits and all of its immediate burdens.

IBR isn't a choice for this reason: you will eventually make enough money to pay off your loans at standard, living frugally. So you'll do that, continuing to live frugally. You will have to do this, or else pay a large additional amount in interest. Why? While you can "stay in" IBR as your income rises, your only benefit to doing so is the loan cancelation after 25 years--your payments will still be high. 15 years beyond the 10 year standard is plenty of time for the federal government to collect substantially more money from you than you otherwise would have owed, as interest accrues and capitalizes.

To shift gears a bit: most people in at a T14 are in at a (well-placing) T11-20/30 with $$$. Some data seriously suggest the latter is the clear choice. Check it: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1640058 The study doesn't spend a word discussing debt, only grades, prestige, and incomes. Add debt and the choice might be even clearer.

If more students would take well-placing T11-20/30 with $$$, law professors would earn less, the market price of a legal education would go down, and students could breath and (gasp) get married, buy a house, and have children before they're 30, like their (oddly less affluent?) parents.


To the bolded: Interest doesn't capitalize on federal loans unless you go into forebearance, allow interest to accrue, and then go back into repayment. Even then, they will ask if you want to pay off the interest before it capitalizes.

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manofjustice
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby manofjustice » Wed May 30, 2012 12:26 pm

rinkrat19 wrote:
manofjustice wrote:
admisionquestion wrote:Except... I have already presented math that shows a budget I am comfortable living with that will pay off 200K in debt after 3 years. So Its okay that Im "forced out" after 6.

Also and more importantly, IBR + LRAP = NOT SCREWED if you dont get biglaw...


I think your budget is elegant and I have printed it out for my records. Your payoff point is about 10 months too early according to my numbers, but no biggie.

You can do a 4 year payoff living quite frugally. But that is the choice: 4 years of Big Law without its immediate benefits and all of its immediate burdens.

IBR isn't a choice for this reason: you will eventually make enough money to pay off your loans at standard, living frugally. So you'll do that, continuing to live frugally. You will have to do this, or else pay a large additional amount in interest. Why? While you can "stay in" IBR as your income rises, your only benefit to doing so is the loan cancelation after 25 years--your payments will still be high. 15 years beyond the 10 year standard is plenty of time for the federal government to collect substantially more money from you than you otherwise would have owed, as interest accrues and capitalizes.

To shift gears a bit: most people in at a T14 are in at a (well-placing) T11-20/30 with $$$. Some data seriously suggest the latter is the clear choice. Check it: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1640058 The study doesn't spend a word discussing debt, only grades, prestige, and incomes. Add debt and the choice might be even clearer.

If more students would take well-placing T11-20/30 with $$$, law professors would earn less, the market price of a legal education would go down, and students could breath and (gasp) get married, buy a house, and have children before they're 30, like their (oddly less affluent?) parents.
Congratulations on finding the proper venue for your crusade.


Thank you rinkrat. I would hope you would join me. Surly you don't enjoy struggling under debt. Life is expensive. We have to save for retirement, save for the kids tuition, buy a house... There is only so long we have to live and work. So why use TLS to provide cover for the law professors, Deans, and Directors of What Not who are living life just fine? Why can’t they live a little less fine, as they did just 10 years ago? Why is tuition so frickin expensive?

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rinkrat19
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby rinkrat19 » Wed May 30, 2012 12:30 pm

manofjustice wrote:
rinkrat19 wrote:
manofjustice wrote:
admisionquestion wrote:Except... I have already presented math that shows a budget I am comfortable living with that will pay off 200K in debt after 3 years. So Its okay that Im "forced out" after 6.

Also and more importantly, IBR + LRAP = NOT SCREWED if you dont get biglaw...


I think your budget is elegant and I have printed it out for my records. Your payoff point is about 10 months too early according to my numbers, but no biggie.

You can do a 4 year payoff living quite frugally. But that is the choice: 4 years of Big Law without its immediate benefits and all of its immediate burdens.

IBR isn't a choice for this reason: you will eventually make enough money to pay off your loans at standard, living frugally. So you'll do that, continuing to live frugally. You will have to do this, or else pay a large additional amount in interest. Why? While you can "stay in" IBR as your income rises, your only benefit to doing so is the loan cancelation after 25 years--your payments will still be high. 15 years beyond the 10 year standard is plenty of time for the federal government to collect substantially more money from you than you otherwise would have owed, as interest accrues and capitalizes.

To shift gears a bit: most people in at a T14 are in at a (well-placing) T11-20/30 with $$$. Some data seriously suggest the latter is the clear choice. Check it: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1640058 The study doesn't spend a word discussing debt, only grades, prestige, and incomes. Add debt and the choice might be even clearer.

If more students would take well-placing T11-20/30 with $$$, law professors would earn less, the market price of a legal education would go down, and students could breath and (gasp) get married, buy a house, and have children before they're 30, like their (oddly less affluent?) parents.
Congratulations on finding the proper venue for your crusade.


Thank you rinkrat. I would hope you would join me. Surly you don't enjoy struggling under debt. Life is expensive. We have to save for retirement, save for the kids tuition, buy a house... There is only so long we have to live and work. So why use TLS to provide cover for the law professors, Deans, and Directors of What Not who are living life just fine? Why can’t they live a little less fine, as they did just 10 years ago? Why is tuition so frickin expensive?
I'm 32, I have a mortgage, and I'm about to quit a $55k/yr job to attend a low T14 with a scholarship amounting to about 38% of this year's tuition (~25% of total COA). I'm going to do my best to make my situation work out, and not worry so much about how much the dean is making.

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manofjustice
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby manofjustice » Wed May 30, 2012 12:35 pm

I'm 32, I have a mortgage, and I'm about to quit a $55k/yr job to attend a low T14 with a scholarship amounting to about 38% of this year's tuition (~25% of total COA). I'm going to do my best to make my situation work out, and not worry so much about how much the dean is making.


Because you're not paying for his raises the last 10 to 15 years. The poor sap who got in without the scholarship is.

(Congrats, btw, on the T14 w/ scholly. Cheers.)

005618502
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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby 005618502 » Wed May 30, 2012 2:03 pm

Has anyone read this?

http://finance.yahoo.com/news/wiping-out--90-000-in-student-loans-in-7-months.html

It doesnt say what his starting salary way but I am going to go on a limb and say less than biglaw?

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Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby timbs4339 » Wed May 30, 2012 3:57 pm

AssumptionRequired wrote:Has anyone read this?

http://finance.yahoo.com/news/wiping-out--90-000-in-student-loans-in-7-months.html

It doesnt say what his starting salary way but I am going to go on a limb and say less than biglaw?


"Low six figures"- maybe 110-120K. He says much less than his banking/consulting friends. From his website he also has
Cash: $7,167
Stocks: $14,100
IRA: $12,235

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

Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby sunynp » Wed May 30, 2012 3:59 pm

Also he is in Texas right? The tax situation he faces is much less than NYC. So does the low 6 figures in Austin equal biglaw in NYC?

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Nom Sawyer
Posts: 933
Joined: Sun Jun 14, 2009 1:28 am

Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby Nom Sawyer » Wed May 30, 2012 4:15 pm

timbs4339 wrote:
AssumptionRequired wrote:Has anyone read this?

http://finance.yahoo.com/news/wiping-out--90-000-in-student-loans-in-7-months.html

It doesnt say what his starting salary way but I am going to go on a limb and say less than biglaw?


"Low six figures"- maybe 110-120K. He says much less than his banking/consulting friends. From his website he also has
Cash: $7,167
Stocks: $14,100
IRA: $12,235


Well anyone can pay of loans by forgoing all investments and liquidating your assets. What he did was really dumb from a financial standpoint (And he admits it by stating it was more of an emotional decision) as:

1. He has no money to fall back on in case of emergencies/ layoff/ etc. due to literally using his last penny to pay off debt.

2. Liquidating his IRA (and the tax hit he took) is probably a bad financial decision, although this is debatable depending on the interest rate of his loans.

3. Forgoing matching contributions on his 401k is BY FAR the biggest loss. Here you are giving up 100% return (plus tax benefits from 401k) to pay off loans and gain, at max, 7% return. That's like giving away cash for pennies on the dollar.

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

Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby sunynp » Wed May 30, 2012 4:19 pm

Nom Sawyer wrote:
timbs4339 wrote:
AssumptionRequired wrote:Has anyone read this?

http://finance.yahoo.com/news/wiping-out--90-000-in-student-loans-in-7-months.html

It doesnt say what his starting salary way but I am going to go on a limb and say less than biglaw?


"Low six figures"- maybe 110-120K. He says much less than his banking/consulting friends. From his website he also has
Cash: $7,167
Stocks: $14,100
IRA: $12,235


Well anyone can pay of loans by forgoing all investments and liquidating your assets. What he did was really dumb from a financial standpoint (And he admits it by stating it was more of an emotional decision) as:

1. He has no money to fall back on in case of emergencies/ layoff/ etc. due to literally using his last penny to pay off debt.

2. Liquidating his IRA (and the tax hit he took) is probably a bad financial decision, although this is debatable depending on the interest rate of his loans.

3. Forgoing matching contributions on his 401k is BY FAR the biggest loss. Here you are giving up 100% return (plus tax benefits from 401k) to pay off loans and gain, at max, 7% return. That's like giving away cash for pennies on the dollar.


He has over $20,000 in cash and stocks. How much does he need? (not a rhetorical question- I want to know how much people think is enough for emergencies) He lives so cheaply that he isn't going to need much to live on if he is laid off. Also he has his second job in landscaping to fall back on for income.

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Tiago Splitter
Posts: 15487
Joined: Tue Jun 28, 2011 1:20 am

Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby Tiago Splitter » Wed May 30, 2012 4:30 pm

sunynp wrote:He has over $20,000 in cash and stocks. How much does he need? (not a rhetorical question- I want to know how much people think is enough for emergencies) He lives so cheaply that he isn't going to need much to live on if he is laid off. Also he has his second job in landscaping to fall back on for income.


It doesn't look like he had access to withdraw from his 401k so at the very least he has those funds as a sort of emergency fund in the event of job loss.

But according to the first post his regular income is less than the original principal of his loans, which was $90,000. He must have really cleaned up in that landscaping business and made some decent money selling stuff to get out from that debt in seven months.

User avatar
Nom Sawyer
Posts: 933
Joined: Sun Jun 14, 2009 1:28 am

Re: NEVER GOING TO BE ABLE TO REPAY 210K IN LOANS? HELP

Postby Nom Sawyer » Wed May 30, 2012 4:32 pm

sunynp wrote:
Nom Sawyer wrote:
timbs4339 wrote:
AssumptionRequired wrote:Has anyone read this?

http://finance.yahoo.com/news/wiping-out--90-000-in-student-loans-in-7-months.html

It doesnt say what his starting salary way but I am going to go on a limb and say less than biglaw?


"Low six figures"- maybe 110-120K. He says much less than his banking/consulting friends. From his website he also has
Cash: $7,167
Stocks: $14,100
IRA: $12,235


Well anyone can pay of loans by forgoing all investments and liquidating your assets. What he did was really dumb from a financial standpoint (And he admits it by stating it was more of an emotional decision) as:

1. He has no money to fall back on in case of emergencies/ layoff/ etc. due to literally using his last penny to pay off debt.

2. Liquidating his IRA (and the tax hit he took) is probably a bad financial decision, although this is debatable depending on the interest rate of his loans.

3. Forgoing matching contributions on his 401k is BY FAR the biggest loss. Here you are giving up 100% return (plus tax benefits from 401k) to pay off loans and gain, at max, 7% return. That's like giving away cash for pennies on the dollar.


He has over $20,000 in cash and stocks. How much does he need? (not a rhetorical question- I want to know how much people think is enough for emergencies) He lives so cheaply that he isn't going to need much to live on if he is laid off. Also he has his second job in landscaping to fall back on for income.


Ok if he's keeping that much then thats definitely enough of a cushion. The silly thing then is he clearly has enough income and assets where if he took, say, the full year or 1.5 yrs to pay off his loans then he would be in much better financial shape since he wouldn't need to withdraw from his 401k and he could also fully take adv. of his companies matching retirement savings program.




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