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Thanks for the post Prof Campos. Student loans are a mess, and it looks like the gov't wants to make them even worse

What does this mean for 2014 and 2015 staffords? I thought they were going for ~6.1% this year, but do we think it will spike back over 6.8 within 2 years?

as long as the recovery remains slow, students borrowing in the near term may actually see a slight reprieve say like 70-100 basis points, but if interest rates go back to historical averages we're all screwed.

drops our rates to 5.41% for unsubsidized and i think plus drops to lik 6.5 this year

MAF

dstars823 wrote:drops our rates to 5.41% for unsubsidized and i think plus drops to lik 6.5 this year

Good thing law school is a one-year commitment right?

My guess is that people enrolling this fall will end up with a blended interest rate for their loan school loans similar to, or perhaps slightly lower than, the previous 6.8/7.9 structure. It will be lower in their first year (5.4/6.5) but almost certainly quite a bit higher in their second and third years. People who enroll from 2014 forward are going to end up paying higher rates than 6.8/7.9 and probably much higher.

Well this makes me pissed that I deferred. Now part of me hopes the economy doesn't get better until I graduate.

Will the rates at least be fixed once the loans are taken out? If so I just need Bernanke to hang in there for another 18 months.

Tiago Splitter wrote:Will the rates at least be fixed once the loans are taken out? If so I just need Bernanke to hang in there for another 18 months.

Yes

francesfarmer wrote:Well this makes me pissed that I deferred. Now part of me hopes the economy doesn't get better until I graduate.

But a poor economic recovery could have a negative impact on hiring. THERE IS NO WINNING!

Paul Campos wrote:My guess is that people enrolling this fall will end up with a blended interest rate for their loan school loans similar to, or perhaps slightly lower than, the previous 6.8/7.9 structure. It will be lower in their first year (5.4/6.5) but almost certainly quite a bit higher in their second and third years. People who enroll from 2014 forward are going to end up paying higher rates than 6.8/7.9 and probably much higher.

For those of us with savings & scholarships and not taking out the full loan amounts, its probably still best to take the minimum this year though? Or will they rise significantly enough by 2015 to merit taking out additional loans this year and applying savings to future years? I cant see the latter being the case after capitalization but theres a big difference b/t 5.4 and 10.5

t-14orbust wrote:

Tiago Splitter wrote:Will the rates at least be fixed once the loans are taken out? If so I just need Bernanke to hang in there for another 18 months.

Yes

As a corrolary to TS, will the 5.41 apply to loans taken out for the 2013-2014 (the ones I just requested)?

untar614 wrote:

francesfarmer wrote:Well this makes me pissed that I deferred. Now part of me hopes the economy doesn't get better until I graduate.

But a poor economic recovery could have a negative impact on hiring. THERE IS NO WINNING!

Ugh, our generation is so fucked, I am MAF about it

jbagelboy wrote:

t-14orbust wrote:

Tiago Splitter wrote:Will the rates at least be fixed once the loans are taken out? If so I just need Bernanke to hang in there for another 18 months.

Yes

As a corrolary to TS, will the 5.41 apply to loans taken out for the 2013-2014 (the ones I just requested)?

I don't know that, you're going to have to wait and see what your loan agreement states. Hopefully you're lucky and can snag the lower rate this year lol. I'm thinking yes but don't quote me on that

jbagelboy wrote:

t-14orbust wrote:

Tiago Splitter wrote:Will the rates at least be fixed once the loans are taken out? If so I just need Bernanke to hang in there for another 18 months.

Yes

As a corrolary to TS, will the 5.41 apply to loans taken out for the 2013-2014 (the ones I just requested)?

I think the rates are supposed to be retroactive so loans that we are going to take out this year should get these discounted rates. I think it would still be best to take out the minimum if possible because the savings of the 100 basis will not be enough to warrant allowing that interest to accrue for 1-2 extra years. Its best to take out more money on the back end.

dstars823 wrote:

jbagelboy wrote:

t-14orbust wrote:

Tiago Splitter wrote:Will the rates at least be fixed once the loans are taken out? If so I just need Bernanke to hang in there for another 18 months.

Yes

As a corrolary to TS, will the 5.41 apply to loans taken out for the 2013-2014 (the ones I just requested)?

I think the rates are supposed to be retroactive so loans that we are going to take out this year should get these discounted rates. I think it would still be best to take out the minimum if possible because the savings of the 100 basis will not be enough to warrant allowing that interest to accrue for 1-2 extra years. Its best to take out more money on the back end.

Maybe. I would keep the liquidity for bar trip. This is a marathon not a sprint, and you might as well have fun as not.

francesfarmer wrote:

untar614 wrote:

francesfarmer wrote:Well this makes me pissed that I deferred. Now part of me hopes the economy doesn't get better until I graduate.

But a poor economic recovery could have a negative impact on hiring. THERE IS NO WINNING!

Ugh, our generation is so fucked, I am MAF about it

this might help: http://www.top-law-schools.com/forums/v ... 0&t=188008

dkb17xzx wrote:

francesfarmer wrote:

untar614 wrote:

francesfarmer wrote:Well this makes me pissed that I deferred. Now part of me hopes the economy doesn't get better until I graduate.

But a poor economic recovery could have a negative impact on hiring. THERE IS NO WINNING!

Ugh, our generation is so fucked, I am MAF about it

this might help: http://www.top-law-schools.com/forums/v ... 0&t=188008

Only makes me M-erAF!

Paul Campos wrote:My guess is that people enrolling this fall will end up with a blended interest rate for their loan school loans similar to, or perhaps slightly lower than, the previous 6.8/7.9 structure. It will be lower in their first year (5.4/6.5) but almost certainly quite a bit higher in their second and third years. People who enroll from 2014 forward are going to end up paying higher rates than 6.8/7.9 and probably much higher.

Ah, so they solved the student loan crisis by... popping the bubble faster?

Finally! Action in Congress

just hope for a super slow recovery so that bernanke has to keep the rates low and the money cheap

dstars823 wrote:just hope for a super slow recovery so that bernanke has to keep the rates low and the money cheap

the economy will NOT recover as long as money is cheap and rates are low. The reason tuition is espensive is because lending to students is risk free because goverment is federaly insuring the loans.

Unfortunately interest rates will be going up right when I need student loans for LS. Errrrrggghhh.

Louis1127 wrote:Unfortunately interest rates will be going up right when I need student loans for LS. Errrrrggghhh.

it's not the interest rate that is the problem. It's the expensive tuition.