How does existing undergraduate debt affect me?

[bethanyadawson]

Hi!

So, I have existing (outstanding) debt in my name right now. It is primarily from private and federal student loans that were taken out with the intention of being paid off by my parents... that is, before they went bankrupt and were unable to pay for anything. Does this affect the admission process or receiving a scholarship? I can understand how it would affect financial aid, but just curious as to whether it can keep me from getting in and/or receiving scholarship money.

Thanks in advance for the answers!

[caminante]

It will not affect acceptances, scholarships, or financial aid.

[abc12345675]

Hi!

So, I have existing (outstanding) debt in my name right now. It is primarily from private and federal student loans that were taken out with the intention of being paid off by my parents... that is, before they went bankrupt and were unable to pay for anything. Does this affect the admission process or receiving a scholarship? I can understand how it would affect financial aid, but just curious as to whether it can keep me from getting in and/or receiving scholarship money.

Thanks in advance for the answers!

Sorry about your folks.

How much debt is it, if you don't mind me asking? This is for 2 reasons: 1) if it's too much you may want to hold off on law school until you get it paid down. and 2) I've heard of a person being prevented from gaining membership to the bar because of too much debt (this person had over $400,000 including law school).

[emkd26]

Hi!

So, I have existing (outstanding) debt in my name right now. It is primarily from private and federal student loans that were taken out with the intention of being paid off by my parents... that is, before they went bankrupt and were unable to pay for anything. Does this affect the admission process or receiving a scholarship? I can understand how it would affect financial aid, but just curious as to whether it can keep me from getting in and/or receiving scholarship money.

Thanks in advance for the answers!

Sorry about your folks.

How much debt is it, if you don't mind me asking? This is for 2 reasons: 1) if it's too much you may want to hold off on law school until you get it paid down. and 2) I've heard of a person being prevented from gaining membership to the bar because of too much debt (this person had over $400,000 including law school).

He was actually denied because he was listed as being in default on those student loans, not because of the total. He made arrangements with the government for payment and is now eligible to reapply to the bar.

[bethanyadawson]

Thank you all so much for your answers. I really, truly appreciate it.

So, the total outstanding debt is in the ballpark of 50k. I'm aware that this is quite a hefty sum, but I'm in communication with all of my debtors and trying to negotiate a low monthly payment.

As for law school financial aid, I have a 3.96 undergrad GPA from NYU and am aiming (fingers crossed) for a high LSAT score, so my ultimate dream is to receive a large scholarship (trust me, I know this is a lofty aspiration).

I just wanted to get some feedback and see if this affects my chance at getting into law school.

Thanks again, everyone!

[cinephile]

I hate to be a downer, but even if you got a full ride somewhere, you still need to pay living expenses (books, health insurance, etc.). You'd probably borrow another 60k. Is it really worth it?

[bethanyadawson]

Well, I have a pretty well paying job currently that I'm saving money at. And, no worries about being a downer, but yes, I believe it would ultimately be worth it for me.

Thanks for the feedback.

[jkpolk]

Thank you all so much for your answers. I really, truly appreciate it.

So, the total outstanding debt is in the ballpark of 50k. I'm aware that this is quite a hefty sum, but I'm in communication with all of my debtors and trying to negotiate a low monthly payment.

As for law school financial aid, I have a 3.96 undergrad GPA from NYU and am aiming (fingers crossed) for a high LSAT score, so my ultimate dream is to receive a large scholarship (trust me, I know this is a lofty aspiration).

I just wanted to get some feedback and see if this affects my chance at getting into law school.

Thanks again, everyone!

you sound like you could be cute

[bethanyadawson]

Haha, oh right, because having outstanding debt is just darling!

[Samara]

I hate to be a downer, but even if you got a full ride somewhere, you still need to pay living expenses (books, health insurance, etc.). You'd probably borrow another 60k. Is it really worth it?

That would still only be like $125k, with interest. Get a good LSAT and OP could get a full-ride to Columbia or Chicago. $125k from one of those schools is not a bad situation.

[bethanyadawson]

Man, you just got me seriously excited!!

[vanwinkle]

A financial tip:

If you're paying anything off before starting law school, pay off the private loans first. If you go back to school with outstanding federal loans, they'll be put into deferment while you're re-enrolled in school; that means they'll keep accruing interest, but you won't have to make payments while in school. Then your repayment plan will kick back in once you graduate from law school (and hopefully have a job to pay with again). This makes carrying federal loans easier while back in school.

In contrast, you'll likely have to keep paying on private loans while in law school, so try to pay those down as much as you can.

[bethanyadawson]

A financial tip:

If you're paying anything off before starting law school, pay off the private loans first. If you go back to school with outstanding federal loans, they'll be put into deferment while you're re-enrolled in school; that means they'll keep accruing interest, but you won't have to make payments while in school. Then your repayment plan will kick back in once you graduate from law school (and hopefully have a job to pay with again). This makes carrying federal loans easier while back in school.

In contrast, you'll likely have to keep paying on private loans while in law school, so try to pay those down as much as you can.

Thank you for that advice. Very helpful indeed.

[bethanyadawson]

Follow up question...

I know this might come off as ill-informed... but does one's credit history ever come up in the law school admissions process?

[Samara]

Follow up question...

I know this might come off as ill-informed... but does one's credit history ever come up in the law school admissions process?

To my knowledge, it does not, but it is checked by DOE when you apply for federal loans. The bar is pretty low for approval though, as long as you don't have anything in collections or default.

I believe that credit history is also checked as part of your application to the bar, but that is the extent of my knowledge on that subject.

[bethanyadawson]

Interesting. Thank you!

[Elston Gunn]

Shoot for HYS with that GPA. If you get in and then use your savings to to pay debt before giving them your financial info, you'll probably get hefty financial aid with the debt and your parents' bankruptcy (very sorry to hear about that, btw). Also, Yale at least would consider your federal undergrad eligibible for COAP (their LRAP)--so if you were in a low paying job, they'd not only make your LS loan payments but your UG ones too.

[laxbrah420]

Undergraduate debt affects you in the sense that having debt limits career opportunities as well as lifestyle choices (ie purchasing a home).

[bethanyadawson]

Shoot for HYS with that GPA. If you get in and then use your savings to to pay debt before giving them your financial info, you'll probably get hefty financial aid with the debt and your parents' bankruptcy (very sorry to hear about that, btw). Also, Yale at least would consider your federal undergrad eligibible for COAP (their LRAP)--so if you were in a low paying job, they'd not only make your LS loan payments but your UG ones too.

HYS is clearly my dream, though not sure how realistic that is. That is interesting though, that hefty financial aid can still be had. And I need to look into Yale's LRAP now!

Such great information, thank you so much.

[vanwinkle]

Shoot for HYS with that GPA. If you get in and then use your savings to to pay debt before giving them your financial info, you'll probably get hefty financial aid with the debt and your parents' bankruptcy (very sorry to hear about that, btw). Also, Yale at least would consider your federal undergrad eligibible for COAP (their LRAP)--so if you were in a low paying job, they'd not only make your LS loan payments but your UG ones too.

HLS makes undergrad loans eligible for LIPP, too. Also, the thing about paying off loans before filing for financial aid is solid advice; when determining grant eligibility, they do consider assets (savings) but not debts (loans). Paying off the private loans, and maybe some of the federal loans too if possible, would make sense.

[bethanyadawson]

I'm not sure if I can realistically afford to pay them all off at this point, but I can make monthly payments on all of them... does that help my case at all?

[TheZoid]

I hate to be a downer, but even if you got a full ride somewhere, you still need to pay living expenses (books, health insurance, etc.). You'd probably borrow another 60k. Is it really worth it?

That would still only be like $125k, with interest. Get a good LSAT and OP could get a full-ride to Columbia or Chicago. $125k from one of those schools is not a bad situation.

Yea, this. It's a bit more nuanced than "Is it worth it?"

[bethanyadawson]

I hate to be a downer, but even if you got a full ride somewhere, you still need to pay living expenses (books, health insurance, etc.). You'd probably borrow another 60k. Is it really worth it?

That would still only be like $125k, with interest. Get a good LSAT and OP could get a full-ride to Columbia or Chicago. $125k from one of those schools is not a bad situation.

Yea, this. It's a bit more nuanced than "Is it worth it?"

Go on.

[cinephile]

I hate to be a downer, but even if you got a full ride somewhere, you still need to pay living expenses (books, health insurance, etc.). You'd probably borrow another 60k. Is it really worth it?

That would still only be like $125k, with interest. Get a good LSAT and OP could get a full-ride to Columbia or Chicago. $125k from one of those schools is not a bad situation.

Yea, this. It's a bit more nuanced than "Is it worth it?"

No, it's really not. This person doesn't have an LSAT score yet, so she(?) doesn't know where she's going. Most people don't do well enough on the LSAT to get into Columbia or Chicago, let alone to get a full ride. Let's say you got a full-ride to your flagship state school, a solid TI. In most cases, that wouldn't be worth the $125k of debt. If there are more details like an LSAT score, obviously that changes things, but without that, assuming that she is merely an above average but not exceptional scorer, then it wouldn't be worth it.

[Elston Gunn]

I'm not sure if I can realistically afford to pay them all off at this point, but I can make monthly payments on all of them... does that help my case at all?

WRT HYS, the key is to not have any assets when applying for financial aid. Having unpaid debts wouldn't hurt you--in fact it will probably get you higher grant amounts.