Why don't more people use LRAP???

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DaftAndDirect
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Re: Why don't more people use LRAP???

Postby DaftAndDirect » Wed Feb 29, 2012 8:59 pm

Desert Fox wrote:
DaftAndDirect wrote:
Desert Fox wrote:TCR is to do big law for as many years as you can handle while only working like 55 hrs per week. That's probably 2, maybe as long as 4-5. During that time, save up, pay as little of your debt as you can (30 year repayment plan), then do PI with enough money to buy a condo (or at least most of one).


It seems like big law exits pretty well to PI.


Interested in hearing more about this approach. I was under the impression people would want to pay down loans as quickly as possible to avoid getting really gouged on the compounding interest.


Depends how much debt you have. If you have 230K, then you'll never pay it back on PI and shouldn't try. Let IBR take that shit. If it's like 60K, pay that shit back.


I'll be in the middle with around 130k. Am I unreasonable to think that I can pay this down in 2.5-3 years on a Big Law salary? Is paying it down that quickly the smart thing to do?

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TIKITEMBO
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Re: Why don't more people use LRAP???

Postby TIKITEMBO » Wed Feb 29, 2012 9:55 pm

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Last edited by TIKITEMBO on Thu Sep 20, 2012 1:14 am, edited 1 time in total.

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splitbrain
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Re: Why don't more people use LRAP???

Postby splitbrain » Wed Feb 29, 2012 10:04 pm

List of LRAP's for anybody who wants it:
http://www.equaljusticeworks.org/resources/student-debt-relief/law-school-lraps/list-law-school-lraps

Really depends on the school and even the state. You don't need to commit 10 years to PI to receive LRAP - that's just for loan forgiveness.

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TIKITEMBO
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Re: Why don't more people use LRAP???

Postby TIKITEMBO » Wed Feb 29, 2012 10:13 pm

splitbrain wrote:List of LRAP's for anybody who wants it:
http://www.equaljusticeworks.org/resources/student-debt-relief/law-school-lraps/list-law-school-lraps

Really depends on the school and even the state. You don't need to commit 10 years to PI to receive LRAP - that's just for loan forgiveness.


Yeah that list is much nicer than the ABA's.

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IAFG
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Re: Why don't more people use LRAP???

Postby IAFG » Wed Feb 29, 2012 10:15 pm

TIKITEMBO wrote:
IAFG wrote:From a T14 with top half grades, biglaw is the easiest job to get. Employers literally come to you, feed you, sell you on the firm, fly you to them on their dime, then make you offers for a summer of getting wined and dined on a first year salary.

I think a lot of people who thought they were going to take advantage of LRAP realize being poor indefinitely sucks.



Being poor indefinitely would suck. 10 years at $50,000-$70,000 (higher or lower depending of course and assuming you get raises as some point in that time) is not something I'd worry about if it's the field you want and you get a good LRAP plan. American's plan is pretty awesome for that actually as they pay your loan payments for you either in full or in part if your income is under $75,000/yr. I would think if you're making beyond that, it doesn't sting too much. Or you can take advantage of the payments for a good portion of that 10 years before you go beyond it.

You'll of course want to see if you save more money filing jointly or separately though if you're married as that would drastically affect payments. American actually takes the greater of your salary or half of you and your spouse's combined salary for it's income base. Again, pretty awesome.

$50k is pretty poor. If you have to pay ANY loan payment, then taxes, then save for retirement, that's poor. You seem to be assuming high income spouse though, so go for it.

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TIKITEMBO
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Re: Why don't more people use LRAP???

Postby TIKITEMBO » Wed Feb 29, 2012 10:34 pm

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Last edited by TIKITEMBO on Thu Sep 20, 2012 1:14 am, edited 1 time in total.

seatown12
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Re: Why don't more people use LRAP???

Postby seatown12 » Wed Feb 29, 2012 10:42 pm

IAFG wrote:$50k is pretty poor.

lol not really, depends on your perspective I guess

mrloblaw
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Re: Why don't more people use LRAP???

Postby mrloblaw » Wed Feb 29, 2012 10:58 pm

seatown12 wrote:
IAFG wrote:$50k is pretty poor.

lol not really, depends on your perspective I guess


You totally need a rich spouse to survive on the median household income as a personal salary.

09042014
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Re: Why don't more people use LRAP???

Postby 09042014 » Wed Feb 29, 2012 11:00 pm

mrloblaw wrote:
seatown12 wrote:
IAFG wrote:$50k is pretty poor.

lol not really, depends on your perspective I guess


You totally need a rich spouse to survive on the median household income as a personal salary.


Average 'merican lives in East Jesusland, Rustbeltia and can buy a house for 200K.

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TIKITEMBO
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Re: Why don't more people use LRAP???

Postby TIKITEMBO » Wed Feb 29, 2012 11:03 pm

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Last edited by TIKITEMBO on Thu Sep 20, 2012 1:14 am, edited 1 time in total.

09042014
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Re: Why don't more people use LRAP???

Postby 09042014 » Wed Feb 29, 2012 11:07 pm

TIKITEMBO wrote:

Way less than that with the housing crisis. I have friends in their 20's signing mortgages for 3% interest in the Midwest. It's pretty crazy.


Yea if I can manage it, I'm buying a condo immediately after law school.

mrloblaw
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Re: Why don't more people use LRAP???

Postby mrloblaw » Wed Feb 29, 2012 11:10 pm

Desert Fox wrote:
mrloblaw wrote:
seatown12 wrote:
IAFG wrote:$50k is pretty poor.

lol not really, depends on your perspective I guess


You totally need a rich spouse to survive on the median household income as a personal salary.


Average 'merican lives in East Jesusland, Rustbeltia and can buy a house for 200K.


According to this random Google source, $50k is the median household income in New York City: http://project.wnyc.org/census-maps/nyc-income/index.html

09042014
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Re: Why don't more people use LRAP???

Postby 09042014 » Wed Feb 29, 2012 11:11 pm

mrloblaw wrote:
Desert Fox wrote:
mrloblaw wrote:
seatown12 wrote:lol not really, depends on your perspective I guess


You totally need a rich spouse to survive on the median household income as a personal salary.


Average 'merican lives in East Jesusland, Rustbeltia and can buy a house for 200K.


According to this random Google source, $50k is the median household income in New York City: http://project.wnyc.org/census-maps/nyc-income/index.html


The average new yorker is poor. They live like rats.

Anonymous User
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Re: Why don't more people use LRAP???

Postby Anonymous User » Wed Feb 29, 2012 11:56 pm

one LRAP on eligibility: "no more than $43,000 when entering public service employment."

this might be why. I can't imagine a qualifying legal job that pays that little, even public service.

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IAFG
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Re: Why don't more people use LRAP???

Postby IAFG » Wed Feb 29, 2012 11:57 pm

Don't any of you have any money?

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Julio_El_Chavo
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Re: Why don't more people use LRAP???

Postby Julio_El_Chavo » Thu Mar 01, 2012 1:08 am

t14fanboy wrote:
TIKITEMBO wrote:Honestly OP, I think most people just don't get how it works (as I'm sure you've gathered)/don't trust it yet. Yes, it's hard to find a PI job, but I think the people who treat it as impossible as they do on here haven't worked in non-profit/government work before. I'm not saying it's a cake walk, it's not. But if it's what you're dedicated to, then go for it. That's my plan. To me, there's honestly no worry in doing PI for 10 years, because that's the only think I would ever consider and it's such a large area of law, I'm not worried about being able to grow in my career.


Rofl. No. Most people don't want PI.


This is true at UVA, which has the worst LRAP program in the T14.

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Julio_El_Chavo
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Re: Why don't more people use LRAP???

Postby Julio_El_Chavo » Thu Mar 01, 2012 1:09 am

Anonymous User wrote:one LRAP on eligibility: "no more than $43,000 when entering public service employment."

this might be why. I can't imagine a qualifying legal job that pays that little, even public service.


not sure if srs

Morgan12Oak
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Re: Why don't more people use LRAP???

Postby Morgan12Oak » Thu Mar 01, 2012 1:18 am

Julio_El_Chavo wrote:
t14fanboy wrote:
TIKITEMBO wrote:Honestly OP, I think most people just don't get how it works (as I'm sure you've gathered)/don't trust it yet. Yes, it's hard to find a PI job, but I think the people who treat it as impossible as they do on here haven't worked in non-profit/government work before. I'm not saying it's a cake walk, it's not. But if it's what you're dedicated to, then go for it. That's my plan. To me, there's honestly no worry in doing PI for 10 years, because that's the only think I would ever consider and it's such a large area of law, I'm not worried about being able to grow in my career.


Rofl. No. Most people don't want PI.


This is true at UVA, which has the worst LRAP program in the T14.


How does UVA have the worst LRAP program in the T14? If you do a simple google search about T14 and LRAP programs UVA never comes up in dead last but usually somewhere in the middle of the pack. I'd hope in the future you substantiate these arguments because you're just misleading people. If you are substantiating it I'd love to see it because frankly I think you couldn't be more wrong.

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Gail
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Re: Why don't more people use LRAP???

Postby Gail » Thu Mar 01, 2012 1:56 am

IAFG wrote:Don't any of you have any money?


Nope. Salt of the Earth.


I know I'm just a 0L, but I have experience working for non-profit that has a legal office.

The lawyers there (lower tier 1 and a TT) didn't go into PI for the money at all and told me that they don't know anyone that would. Thinking about it from this perspective is easy to say that you'll manage it, but PI isn't insignificant work and it can be frustrating/gut-wrenching/incredibly depressing. Certainly the hours are much better than biglaw, but the emotional aspect of seeing people kicked through the mud while struggling to get their kids back from child protective services as they scrape up whatever they can from their minimum wage part-time jobs is not easy in the least.

Even law students who think they have no heart, you will find out really quickly how much of a stoic you are.


They are, however, using LRAP/govt.

truevines
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Re: Why don't more people use LRAP???

Postby truevines » Thu Mar 01, 2012 2:34 am

azntwice wrote:Reading this forum, I'm a bit confused about why more people don't take advantage of their schools' loan repayment assistance programs. I understand some law schools may not have them, but for those who do, why don't 3L students who don't have a permanent job yet try to get a public interest job and allow the school to pay off part or whole of your student loans? As I understand it, the greatest concern about graduating unemployed is the student debt burden, not the lack of a biglaw job. It seems like LRAPs would be a good way to deal with the problem.


The assumption here is that you can get a PI job as long as you want to. But, ITE, a PI job is just as competitive as a BigLaw job or any other meaningful legal job.

You think PI or government is your fallback option; wait until your second semester of 2L.

rad lulz
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Re: Why don't more people use LRAP???

Postby rad lulz » Thu Mar 01, 2012 3:52 am

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Last edited by rad lulz on Sun Apr 21, 2013 4:51 pm, edited 1 time in total.

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TIKITEMBO
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Re: Why don't more people use LRAP???

Postby TIKITEMBO » Thu Mar 01, 2012 1:51 pm

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Last edited by TIKITEMBO on Thu Sep 20, 2012 1:14 am, edited 1 time in total.

PSUDSL08
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Re: Why don't more people use LRAP???

Postby PSUDSL08 » Thu Mar 01, 2012 9:13 pm

I'm a current ADA in my third year at the office who was utilizing LRAP before I was fortunate enough to receive an inheritance. Starting salary was $39K and had approximately $140K in student loans upon graduation. Under LRAP, my payments were approximately $300/month, when they would range from $800-$1200 a month under a standard repayment plan. Once I moved in with my then girlfriend/current wife, my payments were reduced to $229/mo. The payments were not enough to cover the interest on my loans, and my principal was expanding by approximately $4K/yr. Nonetheless, my wife and I were able to purchase a townhome, pay our bills, and put a modest amount aside for retirement savings (currently live in a mid-sized city with a low cost of living).

LRAP is great for attorneys who with significant amounts of student loan debt ($100-$300K) who either aspire to be government attorneys, or who do not have the interest or qualifications needed to land a Biglaw job. That being said, 10 years is a long period of time to spend in the public sector with an extremely low salary. If you spend 10 years doing government criminal work, you may find that you'll have a difficult time marketing yourself to firms (unless you want to do private criminal defense/family law/other area of law requiring frequent court appearances). Becoming an ADA was always a dream of mine, but now that I'm entrenched in this position, I find myself longing for a new challenge. I couldn't imagine putting in another 7 years at my office. Keep in mind that your interests and motivations may change over time, and more rapidly than you think.

If you're willing to make the 10-year commitment to public service, you'll reap the benefits of a tax-free loan discharge and likely accrue a pension in the process. It could be worse.

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Re: Why don't more people use LRAP???

Postby Anonymous User » Sun Mar 04, 2012 11:44 am

DaftAndDirect wrote:I'll be in the middle with around 130k. Am I unreasonable to think that I can pay this down in 2.5-3 years on a Big Law salary? Is paying it down that quickly the smart thing to do?


Yes, reasonable if you make it a priority.

My debt was $130K when I started working. I'm down to about $60K now after 17 months in Big Law.

It doesn't mean a super-frugal life style. (I pay for an apartment in a nice Manhattan neighborhood, for example.) It does mean not throwing money around without thinking about it.

Whether it's the smart thing to do, in my opinion, is not only a question of economics. If it is a mental burden to you -- it is to me -- it's worth paying it off for the peace of mind. If, on the other hand, having debt doesn't bother you at all, by all means run the numbers and figure out what your best strategy is.

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dingbat
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Re: Why don't more people use LRAP???

Postby dingbat » Sun Mar 04, 2012 12:42 pm

r6_philly wrote:
DaftAndDirect wrote:
Desert Fox wrote:TCR is to do big law for as many years as you can handle while only working like 55 hrs per week. That's probably 2, maybe as long as 4-5. During that time, save up, pay as little of your debt as you can (30 year repayment plan), then do PI with enough money to buy a condo (or at least most of one).


It seems like big law exits pretty well to PI.


Interested in hearing more about this approach. I was under the impression people would want to pay down loans as quickly as possible to avoid getting really gouged on the compounding interest.


Compounding interest at 6-8% without accounting for inflation is a very good deal. You can't borrow money cheaper than student loans, except for mortgages in the last few years. I doubt everyone on here wants to save up all the cash then buy a house outright. Taking on a 500k mortgage is essentially compounding interest for 30 years, only structured up front (so are car loans generally around 8-10%). Remember mortgage rates used to be like 18%. Student loans are, and will be soon, really good bargains. (once the Fed jack rates up again after economy recovers)


What a load of crap. Before grad loans got restructured a few years ago, interest on student loans were about 3.4% (that was the rate on student loans I took out around 2004). That was cheap.
Loans over 5% are a bad idea, unless in an inflationary environment
Loans at 10% are plain stupid




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