Use loans or use savings? Forum

[decisionsdecisions1]

Bit of a weird question, thanks in advance for any advice!

I'll be going to CCN in the fall, with $155,000 in aid, which leaves about $100,000 in expenses I'll be responsible for, assuming standard COA. My grandparents recently passed away, and I am the beneficiary of a trust with about $100,000. I'm shooting for PI, which given the LRAP program at the school, would cover my payments as long as I make less than $80,000.

How would you recommend I pay for school? On the one hand, I could graduate essentially debt free, which hedges against the possibility that PI work is too hard to find or the PSLF program gets blown up by some future Congress. Given the lack of debt, I wouldn't be beholden to BigLaw as a PI alternative. The downside is that money would be gone, and given my age, would be more valuable in the long run if I put it away for retirement now.

The other option is to take out $100,000 in loans, and since the intention is PI work, the size ideally shouldn't be daunting because the LRAP will cover most/all of the loan payments and the forgiveness is not taxable. Then I come out with a "free" education and still have the savings.

Or is some middle ground better, where I take out the maximum $60k in Stafford loans, which have better rates and origination fees, and use some of the savings to pay the difference?

[Tls2016]

Don't spend your savings for law school. Leave that money in a trust.

[datenginedatcould]

If all of your aid was solely merit based, then you're golden. Save the money, use loans. But beware about the fine print on LRAP. Double check that you won't have to pay a certain amount of your loans before qualifying for LRAP.

However, if your aid included need-based grants, then you may lose some of that because of your inheritance. I would suggest you double check with the school about how it could impact your aid.

[decisionsdecisions1]

If all of your aid was solely merit based, then you're golden. Save the money, use loans. But beware about the fine print on LRAP. Double check that you won't have to pay a certain amount of your loans before qualifying for LRAP.

However, if your aid included need-based grants, then you may lose some of that because of your inheritance. I would suggest you double check with the school about how it could impact your aid.

Thanks for the advice! The award is entirely merit based. The school also said that its LRAP program only looks at annual income and ignores any assets.

And just to probe a little deeper, are you guys suggesting loans because odds are that this will all be forgiven anyway, and if PSLF implodes or I change careers, I would still have the money to pay off the accumulated debt?

[hairbear7]

^yeah exactly

[mvp99]

If all of your aid was solely merit based, then you're golden. Save the money, use loans. But beware about the fine print on LRAP. Double check that you won't have to pay a certain amount of your loans before qualifying for LRAP.

However, if your aid included need-based grants, then you may lose some of that because of your inheritance. I would suggest you double check with the school about how it could impact your aid.

Thanks for the advice! The award is entirely merit based. The school also said that its LRAP program only looks at annual income and ignores any assets.

And just to probe a little deeper, are you guys suggesting loans because odds are that this will all be forgiven anyway, and if PSLF implodes or I change careers, I would still have the money to pay off the accumulated debt?

if you live frugally there's no reason to take out more than 60-70k in loans for the three years.

[BigZuck]

If all of your aid was solely merit based, then you're golden. Save the money, use loans. But beware about the fine print on LRAP. Double check that you won't have to pay a certain amount of your loans before qualifying for LRAP.

However, if your aid included need-based grants, then you may lose some of that because of your inheritance. I would suggest you double check with the school about how it could impact your aid.

Thanks for the advice! The award is entirely merit based. The school also said that its LRAP program only looks at annual income and ignores any assets.

And just to probe a little deeper, are you guys suggesting loans because odds are that this will all be forgiven anyway, and if PSLF implodes or I change careers, I would still have the money to pay off the accumulated debt?

if you live frugally there's no reason to take out more than 60-70k in loans for the three years.

60ishK tuition means the OP is on the hook for about 25K in tuition. 60ishK for COL, throw in some loan origination fees and accumulated interest and the OP will be pushing 100K debt.

I guess it depends on if it is C, C, or N but I think the OP is correct to assume it will be around 100K

[decisionsdecisions1]

If all of your aid was solely merit based, then you're golden. Save the money, use loans. But beware about the fine print on LRAP. Double check that you won't have to pay a certain amount of your loans before qualifying for LRAP.

However, if your aid included need-based grants, then you may lose some of that because of your inheritance. I would suggest you double check with the school about how it could impact your aid.

Thanks for the advice! The award is entirely merit based. The school also said that its LRAP program only looks at annual income and ignores any assets.

And just to probe a little deeper, are you guys suggesting loans because odds are that this will all be forgiven anyway, and if PSLF implodes or I change careers, I would still have the money to pay off the accumulated debt?

if you live frugally there's no reason to take out more than 60-70k in loans for the three years.

60ishK tuition means the OP is on the hook for about 25K in tuition. 60ishK for COL, throw in some loan origination fees and accumulated interest and the OP will be pushing 100K debt.

I guess it depends on if it is C, C, or N but I think the OP is correct to assume it will be around 100K

BigZuck, does 60 vs 100 make a difference in your recommendation?

[BigZuck]

I don't think so, I'd just load up on loans and hope they would be forgiven I think

[hairbear7]

Definitely take advantage of LRAP and PSLF. If those programs or your career goals change, then you can just use your savings to pay the debt off. Of course there is an origination fee and the debt has accruing interest, but that will only matter if you ditch PI, which will be fine because your assets should be growing enough to make up for that by the time you graduate.