Law School Debt and IBR

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mrtoren
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Law School Debt and IBR

Postby mrtoren » Tue Apr 12, 2011 11:23 pm

As some of you may know, I have been interning with a State's Attorney's Office in Illinois for about seven months now. It's the first job that I have ever really enjoyed and I am always eager to go in to work. I am convinced that this is a career I would be happy with for the rest of my life. However, it definitely does not pay well..at least not initially. If you knew you were going to go into criminal prosecution, would you still consider the cost of law school? IBR should abolish all debt after ten years, but would you still be hesitant to rack up a lot of debt?

goodgrief
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Re: Law School Debt and IBR

Postby goodgrief » Wed Apr 13, 2011 9:36 am

I'm going to law school w/ limited aid knowing that I want to go into public interest/public service immediately upon graduating. It's not a bad deal with LRAPs and IBR, and if you absolutely know what you want to do with a law degree, and know how to get from point A to point B, then you should go for it. IBR will keep your initial payments as a small percentage of salary and after 120 months in public service/public interest (so long as its not partisan/religious/or -for some crappy reason - union related), your debt is forgiven. Unlike in private sector IBR, it won't come back to bite you as taxed income.

You should definitely do your own research on LRAPs at schools, because those can really make or break a decision, and it helps not to be too reliant on only one source of loan repayment assistance. Also, look at schools where you can get scholarship money and schools in places with low costs of living. Every bit of money you save on law school cost of attendance will make your later life easier.

Hope this helps.

Anonymous Loser
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Re: Law School Debt and IBR

Postby Anonymous Loser » Wed Apr 13, 2011 10:06 am

In additional to the IBR/LRAP programs that are available to all borrowers of federal educational loans, prosecutors and public defenders can take advantage of the John R. Justice Student Loan Repayment Program, which is a federal LRAP program administered by the States.

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homestyle28
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Re: Law School Debt and IBR

Postby homestyle28 » Wed Apr 13, 2011 10:13 am

IBR I think makes it livable (so does the 20 year graduated repayment plan, IMO), but this consideration certainly made me look a little more closely at different LRAPs, it varies a bit, and will certainly impact your QOL after school.

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mrtoren
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Re: Law School Debt and IBR

Postby mrtoren » Wed Apr 13, 2011 1:20 pm

Anonymous Loser wrote:In additional to the IBR/LRAP programs that are available to all borrowers of federal educational loans, prosecutors and public defenders can take advantage of the John R. Justice Student Loan Repayment Program, which is a federal LRAP program administered by the States.

Thank you! In all my time here, I had never heard anyone mention that program. I appreciate the feedback!

Anonymous Loser
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Re: Law School Debt and IBR

Postby Anonymous Loser » Wed Apr 13, 2011 1:33 pm

mrtoren wrote:
Anonymous Loser wrote:In additional to the IBR/LRAP programs that are available to all borrowers of federal educational loans, prosecutors and public defenders can take advantage of the John R. Justice Student Loan Repayment Program, which is a federal LRAP program administered by the States.

Thank you! In all my time here, I had never heard anyone mention that program. I appreciate the feedback!


Don't overlook state-specific programs:

http://ilga.gov/legislation/publicacts/ ... e=096-0768

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mrtoren
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Re: Law School Debt and IBR

Postby mrtoren » Thu Apr 14, 2011 10:21 pm

Is it possible to stack all of these programs together? The John R. Justice and IL-specific funding could provide up to $16,000/year for the first couple of years. LRAP varies, but that would be even more and IBR would keep the remaining debt to a percentage.

Anonymous Loser
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Re: Law School Debt and IBR

Postby Anonymous Loser » Sat Apr 16, 2011 8:51 pm

mrtoren wrote:Is it possible to stack all of these programs together?


Not exactly.

I haven't looked into the John R. Justice program guidelines that closely, so I don't know if this is how other states do it, but Illinois pays awards directly to the holder of the loan, and requires the borrower to continue making regular payments. As a result, the program has essentially no impact on most borrowers, because the JRJ award does not reduce their monthly loan expenditures, and any balance remaining after 10 years is forgiven by the federal government. So, although the programs are "stacked," only those borrowers with loan amounts low enough so as to be paid off in fewer than 120 IBR payments realize any benefit from the program as currently structured.

A better way to structure this program would be to utilize the awards to pay a portion of the borrower's regular IBR payment, reducing the borrower's overall monthly educational lending expenses. Many school-funded LRAP's have been restructured to function in this manner, working in harmony with the federal IBR/LRAP program.


Link to Word file outlining administration of the JRJ program in Illinois

LurkerNoMore
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Re: Law School Debt and IBR

Postby LurkerNoMore » Sun Apr 17, 2011 9:34 am

One thing to check into is the impact of spousal income on any of these programs. Though it may be the furthest thing from your mind, the first 10 years out of law school are very often the time that people wind up getting married and start having kids. What seems like a very workable plan when you are single, can get very complicated if you decide to get married or have kids.

goodgrief
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Re: Law School Debt and IBR

Postby goodgrief » Mon Apr 18, 2011 12:56 pm

LurkerNoMore wrote:One thing to check into is the impact of spousal income on any of these programs. Though it may be the furthest thing from your mind, the first 10 years out of law school are very often the time that people wind up getting married and start having kids. What seems like a very workable plan when you are single, can get very complicated if you decide to get married or have kids.


That is important. However, from what I've read on at least the Federal programs, if you file your taxes separately, there shouldn't be that much of an impact. But more research is always good.




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