Savings = Bad?

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

Postby superhopefulwoo » Fri Jan 04, 2013 1:54 am

I am considered to be below poverty level, and so are my parents (if I wanted to include their information). However, I did save up a lump some over 5k, under 20k. And I have an investment in the same money range. Will this affect my FAFSA negatively? Is it better to use the money toward some big purchase and withdraw it than to keep it in my account?


*My two cents is that it seems unfair to penalize me for saving money consistently while working hard at poverty level... but maybe they won't see it that way?? Please advise!

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Tiago Splitter
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Re: Savings = Bad?

Postby Tiago Splitter » Fri Jan 04, 2013 1:59 am

Need based aid doesn't really exist outside of HYS. If you aren't going to one of those schools it won't make any difference.

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rinkrat19
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Re: Savings = Bad?

Postby rinkrat19 » Fri Jan 04, 2013 2:00 am

There's very little need-based aid in law school outside of HYS, and there are no subsidized loans for grad school. It would increase your expected family contribution calculated by FAFSA, but likely won't affect your aid. You can still get the max loans at the same (crappy) interest rates.

(This is not an absolute: there are some cases of need-based aid. Just very few.)

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dingbat
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Re: Savings = Bad?

Postby dingbat » Fri Jan 04, 2013 2:09 am

rinkrat19 wrote:(This is not an absolute: there are some cases of need-based aid. Just very few.)
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Golden Bear 11
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Re: Savings = Bad?

Postby Golden Bear 11 » Fri Jan 04, 2013 2:15 am

I know for a fact that need-based aid exists at Berkeley & UCLA Law

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rinkrat19
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Re: Savings = Bad?

Postby rinkrat19 » Fri Jan 04, 2013 2:19 am

Golden Bear 11 wrote:I know for a fact that need-based aid exists at Berkeley & UCLA Law

I can't speak for those schools specifically, but I've seen other schools (Northwestern) say they consider need and merit together, but most (everyone I've run across) people get approximately what you'd expect from their numbers, disregarding need.

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dood
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Re: Savings = Bad?

Postby dood » Fri Jan 04, 2013 2:38 am

superhopefulwoo wrote:I am considered to be below poverty level, and so are my parents (if I wanted to include their information). However, I did save up a lump some over 5k, under 20k. And I have an investment in the same money range. Will this affect my FAFSA negatively? Is it better to use the money toward some big purchase and withdraw it than to keep it in my account?


*My two cents is that it seems unfair to penalize me for saving money consistently while working hard at poverty level... but maybe they won't see it that way?? Please advise!


yes im not sure by how much. but it will affect it. the year i got into gw law, i was set to receive a finaid package that included $15K/year in need based grants. i chose to defer and work so i could pay off some UG loans. but my reduced debt and increased income resulted in me losing that $15K/year need based grant. so by being responsible, i cost my self $45K.

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dingbat
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Re: Savings = Bad?

Postby dingbat » Fri Jan 04, 2013 2:41 am

As an aside, the thread title sums up a lot of what's wrong with the world today

B90
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Re: Savings = Bad?

Postby B90 » Sat Jan 05, 2013 4:33 am

Here is my advice, since you asked. First, your comment about including your parents' info. "if you wanted to" is ridiculous. Both the FAFSA and need access have guidelines for what THEY REQUIRE of you.
Second, saying that you are being PENALIZED for saving makes you sound both naive and arrogant. None of us are ENTITLED to have someone give us money for law school. You seem to think your situation (coming from poverty) is unique. It is not. Many applicants apply either their senior year in college or right after they graduate. This means they likely do not yet possess a job that can support them.
I am not unsympathetic to your situation. I would genuinely love to see you receive a significant scholarship. It is more likely, however, that you will be "awarded" government loans to cover the cost of attendance.
I do admire you for working hard to save money. You should be proud of that. However, please know there are others who have done the same.

superhopefulwoo
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Re: Savings = Bad?

Postby superhopefulwoo » Sat Jan 05, 2013 8:35 pm

Please allow me to clarify what I mean by being penalized. Yes, I worked hard to save money, and I'm proud of it. And yes, many other students have done the same thing. The biggest difference between most people regardless of their income is whether they spend and save responsibly. What I'm trying to get at is, let's say I saved money while going to school at the same time (many students do/try)... if another student is partying their butt off or decided to go on a bunch of trips and had the same difficult situation/income as me... why should the student in debt due to their irresponsible spending be awarded over me or others like poster dood??

I'm not trying to be presumptive - what I am saying though is that... every single student had an opportunity to try to work a crappy minimum wage and save some money while attending college. Many students have the same disadvantages... but why are the students who handle the situation poorly the ones awarded over those who work hard? Why is that irresponsible student going to get out of law school debt free or close while the responsible student must lose their savings AND have over 50k-100k in debt (and with interest over the years it doubles to triples in amount). How is that possibly reasonable or fair? That is what I am concerned about.

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rinkrat19
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Re: Savings = Bad?

Postby rinkrat19 » Sat Jan 05, 2013 8:38 pm

superhopefulwoo wrote:Please allow me to clarify what I mean by being penalized. Yes, I worked hard to save money, and I'm proud of it. And yes, many other students have done the same thing. The biggest difference between most people regardless of their income is whether they spend and save responsibly. What I'm trying to get at is, let's say I saved money while going to school at the same time (many students do/try)... if another student is partying their butt off or decided to go on a bunch of trips and had the same difficult situation/income as me... why should the student in debt due to their irresponsible spending be awarded over me or others like poster dood??

I'm not trying to be presumptive - what I am saying though is that... every single student had an opportunity to try to work a crappy minimum wage and save some money while attending college. Many students have the same disadvantages... but why are the students who handle the situation poorly the ones awarded over those who work hard? Why is that irresponsible student going to get out of law school debt free or close while the responsible student must lose their savings AND have over 50k-100k in debt (and with interest over the years it doubles to triples in amount). How is that possibly reasonable or fair? That is what I am concerned about.

Mostly, they're not. If someone is poor but doesn't have a great backstory about growing up in a cult compound in Appalachia without electricity or running water, or being a refugee from a genocide, they're probably not going to get need-based aid. They'll get the same loans at the same interest rates as you, with your savings.

B90
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Re: Savings = Bad?

Postby B90 » Sun Jan 06, 2013 3:10 am

superhopefulwoo wrote:Please allow me to clarify what I mean by being penalized. Yes, I worked hard to save money, and I'm proud of it. And yes, many other students have done the same thing. The biggest difference between most people regardless of their income is whether they spend and save responsibly. What I'm trying to get at is, let's say I saved money while going to school at the same time (many students do/try)... if another student is partying their butt off or decided to go on a bunch of trips and had the same difficult situation/income as me... why should the student in debt due to their irresponsible spending be awarded over me or others like poster dood??

I'm not trying to be presumptive - what I am saying though is that... every single student had an opportunity to try to work a crappy minimum wage and save some money while attending college. Many students have the same disadvantages... but why are the students who handle the situation poorly the ones awarded over those who work hard? Why is that irresponsible student going to get out of law school debt free or close while the responsible student must lose their savings AND have over 50k-100k in debt (and with interest over the years it doubles to triples in amount). How is that possibly reasonable or fair? That is what I am concerned about.

Law school financial aid is completely different than UG or even other grad school financial aid.
You need to accept this, because there is nothing you can do about it right now.
Also, you need to breathe and take a step back here. You are thinking emotionally, not rationally.
Your statements about irresponsible people being rewarded over those who work hard are not only untrue, they make no sense.
Nobody HAS to "loose their savings AND have debt" as you say. Law school is a choice. You should go because you want to. If you are unwilling or unable to make the necessary sacrifices, DON'T DO IT!
You are acting like you are being denied a heart transplant. We are ALL extremely fortunate to have the opportunity to choose to go to law school.
I understand your thoughts and what you are going through. However, you SOUND like a spoiled brat. I know you are not, you just need some perspective.
Don't worry about "fairness". You will drive yourself crazy because life is not fair. One thing I have learned is that we would ALL suffer if life were truly "fair," because we all get good things we don't "deserve".
It is also very judgemental, shortsighted, and ignorant of you to make the assumption that anyone who doesn't have savings simply didn't try. For example, I worked full time while going to UG full time. I worked my ass off and made a lot of money, yet I still don't have any savings, because I spent it all on food, rent, medical bills, etc.
A lot of people are unemployed. People have children and family members to take care of. You do not know everyone else's situation. You need to stop comparing yourself to others. Be grateful for what you have. You have been given ALOT.
Also, you are joining the legal profession. If you continue to compare yourself to others you will hate your life, your self, and likely become an alcoholic. I don't want to see that happen to you. You have overcome a great deal to get this far. You have so much to teach and give to others. Don't waste that.

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sdmelzer
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Re: Savings = Bad?

Postby sdmelzer » Mon Jan 14, 2013 11:58 am

For what it is worth OP, I completely understand you concern. And unlike others, I think the idea is justified.

In no way are you stating that you deserve to get free money from schools. That is a consequence. The sticking point is the difference between having accessible need granted to someone who is poor, worked, and spent all that money on trivial things OR someone who is poor, worked, and saved all that money responsibly. Theoretically, yes, it is complete bs that the nature of this economy awards negligent choices. Theoretically, what you are saying is that the dude who spent all his money just gets it handed back to him for free because he was deemed, numerically, to be in dire need. The savings bro, however, is forced to use those savings in order to pay for school.

I think that savings SHOULD be used to pay for law school to keep debt down. However, the dude who HAD money but then spent all of it should be sol. What I am saying is that financial history should be taken into account when determining financial aid. And I think, OP, you would agree with me.


Law school does not follow the theoretical track. Like has already been mentioned, need based aid is retardedly hard to obtain outside HYS (maybe marginal others). So I agree with the above posters that it wont really matter in your case because the difference is negligible with or without savings (you still wont get any, more than likely). Despite this, I am sympathetic to your post. It really isn't fair and does not teach proper financial management. But thus is the way of the world.


My advice: Keep the savings. Use them. You don't want to liquidate on frugal things and then STILL get no aid. If it were something other than law school, my answer may be different. But just keep em, and know that you did better than most and will have less debt to pay off from loans.


(This was written shotgun style)

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kwais
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Re: Savings = Bad?

Postby kwais » Mon Jan 14, 2013 12:20 pm

superhopefulwoo wrote: What I'm trying to get at is, let's say I saved money while going to school at the same time (many students do/try)... if another student is partying their butt off or decided to go on a bunch of trips and had the same difficult situation/income as me... why should the student in debt due to their irresponsible spending be awarded over me or others like poster dood??


dude, you sound entitled. the answer to your question above is very simple. they MIGHT get more money in aid because they have less in savings and you MIGHT get less money because you have more in savings, therefore more to put towards law school. Sorry that math hurts your feelings.

Oh, and some non-HYS schools definitely have need-based aid.

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A. Nony Mouse
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Re: Savings = Bad?

Postby A. Nony Mouse » Mon Jan 14, 2013 12:40 pm

superhopefulwoo wrote:Please allow me to clarify what I mean by being penalized. Yes, I worked hard to save money, and I'm proud of it. And yes, many other students have done the same thing. The biggest difference between most people regardless of their income is whether they spend and save responsibly. What I'm trying to get at is, let's say I saved money while going to school at the same time (many students do/try)... if another student is partying their butt off or decided to go on a bunch of trips and had the same difficult situation/income as me... why should the student in debt due to their irresponsible spending be awarded over me or others like poster dood??

I'm not trying to be presumptive - what I am saying though is that... every single student had an opportunity to try to work a crappy minimum wage and save some money while attending college. Many students have the same disadvantages... but why are the students who handle the situation poorly the ones awarded over those who work hard? Why is that irresponsible student going to get out of law school debt free or close while the responsible student must lose their savings AND have over 50k-100k in debt (and with interest over the years it doubles to triples in amount). How is that possibly reasonable or fair? That is what I am concerned about.

Okay, first, not everyone who doesn't manage to save money the way you did is irresponsible. People make lots of different choices for different reasons, and you don't know their lives. Second, except for a very few places, people don't go to law school debt-free because they don't have any money - they go to law school debt-free because they have a high LSAT/GPA for that school. (And even the schools listed here as giving need-based aid require very good stats to get into to begin with, and the person going debt-free has to have something unique to offer the school, that makes them a valuable member of the incoming class.) Otherwise, say, 97% of the time, you and the hypothetical Irresponsible Poor Person are both going to be taking out loans, and the hypothetical Irresponsible Poor Person is going to have more loans than you, go into greater debt than you, and take more time to pay it back than you. (You don't even have to use your savings on law school - assuming a reasonable credit score, you can take out as much as you like to cover your law school costs and keep your savings.) And if you spend your life brooding about the possibly 3% who got something you didn't, you're only going to hurt yourself.

(But really, the Irresponsible Poor Person living high on the hog, enjoying life while being handed money because they refuse to work, is a unicorn. At least in law school.)

superhopefulwoo
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Re: Savings = Bad?

Postby superhopefulwoo » Wed Jan 16, 2013 1:51 am

sdmeizer - I appreciate your post since you seemed to key in on what my intent was. I apologize if I sound entitled - I do not, by any means, feel that I should receive some sort of charity. Forgive me because my understanding of law school's financial aid may have been skewed. I had a couple friends who overspent on shopping/booze in college and received at least $7000 in financial aid. One friend claimed his siblings were dependents (even though he covers none of their expenses) because his parents let them, etc. Of course, I know that is not necessarily the norm, and I am sure I can not generalize based on such specific instances.

I also feel bad to have come off as brooding. Maybe a little disappointed IF my savings would work against me (if it makes no difference regardless, well hey - what does it matter). So I may not deserve the money, but I feel I need some assistance as I'm sure MANY of my fellow posters feel. Yes, it doesn't mean we all get it, and from what I'm coming to understand, it doesn't mean MOST of us will get it except with HYS. Really, my main concern wasn't 'woe is me'. It was - hey, it would be a shame if people (especially like poster dood) who may truly need it get stuck with an overall bigger bill than someone who may not have needed it but seemed like it on paper. In my opinion, it is no different than a "looking beyond the numbers" for admission - just with financial aid.

Anyway, I hope that can clear the air a little. I don't think every person with bad numbers just partied away - I get that some people were severely sick or suffered some other sort of situation that caused them to have poor numbers/bad credit, and it is not their fault. I definitely hope the aid goes to those people first and foremost, and what might be left (if any) can go to people who deserve it (although I guess no one can ever agree on who that might actually be).

Here's a nice thought... cheaper tuition because all law students deserve it?! :)

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Mick Haller
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Re: Savings = Bad?

Postby Mick Haller » Wed Jan 16, 2013 1:55 am

Golden Bear 11 wrote:I know for a fact that need-based aid exists at Berkeley & UCLA Law


And UC Hastings.

I saved about $30k by scrimping and saving over 2 years of full time work after college. Came from a decidedly lower middle class background in a poor state. Hastings denied me any of the need-based aid available for 75% of the class due to my 30k savings.

This was like a $8,000 need grant that I was denied. We aren't talking chump change. I feel like being financially responsible sometimes comes back to bite you. I bet many people from much wealthier families that went straight to law school from undergrad got the $8k.

I mean the system generally works, but some deserving people are going to fall through the cracks.




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