If biglaw or bust, are private loans the way to go? Forum

Kabuo · Post by **Kabuo** » Sat Jul 30, 2011 10:22 pm

Question in the title. If you know you're never going to be looking for PI or utilizing an LRAP, doesn't it make more sense to take private loans? I've heard of people getting offered like 2.5% interest on what would also be dischargable debt I think. I doubt I have the credit to get this on my own, and I wouldn't get my dad to cosign if the plan was net biglaw or declare bankruptcy, but I was wondering about this all day and have decided to ask TLS.

lawgod · Post by **lawgod** » Sat Jul 30, 2011 10:23 pm

You can get dischargeable debt at 2.5%? Sounds good to me.

DMBFan · Post by **DMBFan** » Sat Jul 30, 2011 10:29 pm

Kabuo wrote:the plan was net biglaw or declare bankruptcy

Wow...seems like a slightly risky plan.

lawgod · Post by **lawgod** » Sat Jul 30, 2011 10:31 pm

DMBFan wrote:
Kabuo wrote:the plan was net biglaw or declare bankruptcy
Wow...seems like a slightly risky plan.

Why not biglaw AND declare bankruptcy?

NYC Law · Post by **NYC Law** » Sat Jul 30, 2011 10:33 pm

ALL student loans are non-dischargeable, private or public.

rcweedman · Post by **rcweedman** » Sat Jul 30, 2011 10:35 pm

Kabuo wrote: people getting offered like 2.5% interest

lawgod · Post by **lawgod** » Sat Jul 30, 2011 10:35 pm

NYC Law wrote:ALL student loans are non-dischargeable, private or public.

Yes, what does that mean anyway?
What do they do if you don't have the money? Will they take everything you have and toss you on the street like in the old days? Will they put you in debtors prison?

bruinwang · Post by **bruinwang** » Sat Jul 30, 2011 10:36 pm

Kabuo wrote:I've heard of people getting offered like 2.5% interest on what would also be dischargable debt I think.

Yup, I got 2.5% interest through Sallie Mae with my parents cosigning. I also took out some Federal Stafford, but the majority of my loans are private.

shoeshine · Post by **shoeshine** » Sat Jul 30, 2011 10:36 pm

NYC Law wrote:ALL student loans are non-dischargeable, private or public.

This.

Plus even if you are big law or bust it is good to give yourself the option of doing public interest if you strike out at OCI.

lawgod · Post by **lawgod** » Sat Jul 30, 2011 10:37 pm

bruinwang wrote:
Kabuo wrote:I've heard of people getting offered like 2.5% interest on what would also be dischargable debt I think.
Yup, I got 2.5% interest through Sallie Mae with my parents cosigning. I also took out some Federal Stafford, but the majority of my loans are private.

I want 2.5. Blazes durn it!

Bildungsroman · Post by **Bildungsroman** » Sat Jul 30, 2011 10:38 pm

lawgod wrote:
NYC Law wrote:ALL student loans are non-dischargeable, private or public.
Yes, what does that mean anyway?

I think this should get you started: http://lmgtfy.com/?q=How+does+Google+fucking+work%3F

NYC Law · Post by **NYC Law** » Sat Jul 30, 2011 10:39 pm

lawgod wrote:
NYC Law wrote:ALL student loans are non-dischargeable, private or public.
Yes, what does that mean anyway?
What do they do if you don't have the money? Will they take everything you have and toss you on the street like in the old days? Will they put you in debtors prison?

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) (LinkRemoved) is what made private loans non-dischargeable btw.

But if you can't pay they'll just wreck your credit and get a judgment, put a lien on your assets, garnish your wages, etc etc.

shoeshine · Post by **shoeshine** » Sat Jul 30, 2011 10:40 pm

lawgod wrote:
NYC Law wrote:ALL student loans are non-dischargeable, private or public.
Yes, what does that mean anyway?
What do they do if you don't have the money? Will they take everything you have and toss you on the street like in the old days? Will they put you in debtors prison?

No debtors prison. Garnish wages, liens on assets, garnish or seize bank accounts (in the worst cases).

rcweedman · Post by **rcweedman** » Sat Jul 30, 2011 10:42 pm

bruinwang wrote:Yup, I got 2.5% interest through Sallie Mae with my parents cosigning. I also took out some Federal Stafford, but the majority of my loans are private.

Sallie Mae FTW!

sunynp · Post by **sunynp** » Sat Jul 30, 2011 11:30 pm

How is biglaw or bust a reasonable plan? What exactly happens in the "bust" part? The debt you owe doesn't ever go away until it is repaid with interest.

I think that you need to be able to use IBR. As you know, private loans don't qualify for IBR. There are 25 year IBR plans and the 10 year plan with the qualifying job.

http://studentaid.ed.gov/PORTALSWebApp/ ... BRPlan.jsp

Kabuo · Post by **Kabuo** » Sat Jul 30, 2011 11:31 pm

NYC Law wrote:ALL student loans are non-dischargeable, private or public.

Thought I was overlooking something. Well, that's probably why more people haven't mentioned it then. And like a poster above, I do know someone who got 2.5% with a parent cosigner. Seems pretty doable if your parents have good credit. I think the reason people don't do it is to still have their debt be qualified for LRAPs and IBR, etc.

Kabuo · Post by **Kabuo** » Sat Jul 30, 2011 11:33 pm

sunynp wrote:How is biglaw or bust a reasonable plan? What exactly happens in the "bust" part? The debt you owe doesn't ever go away until it is repaid with interest.

I think that you need to be able to use IBR. As you know, private loans don't qualify for IBR. There are 25 year IBR plans and the 10 year plan with the qualifying job.

http://studentaid.ed.gov/PORTALSWebApp/ ... BRPlan.jsp

Biglaw or bust is not my plan. If it were, I'd be playing it kind of stupid by attending WUSTL and not waiting a year for Cornell or something (IB people telling me that this is stupid anyway; it's done). I think there are quite a few self declared biglaw or bust types on these boards though.

NYC Law · Post by **NYC Law** » Sat Jul 30, 2011 11:35 pm

Kabuo wrote:
NYC Law wrote:ALL student loans are non-dischargeable, private or public.
Thought I was overlooking something. Well, that's probably why more people haven't mentioned it then. And like a poster above, I do know someone who got 2.5% with a parent cosigner. Seems pretty doable if your parents have good credit. I think the reason people don't do it is to still have their debt be qualified for LRAPs and IBR, etc.

The only other positive is that I don't think private borrowers are as unforgiving as the federal gov't if you ever do default. A default on a federal loan will follow you forever and prevent you from ever working for the government (military included). But I think the IBR fallback option is just too valuable to seriously consider a private loan. No one has good enough odds of biglaw to justify the decision.

buckilaw · Post by **buckilaw** » Sun Jul 31, 2011 12:02 am

bruinwang wrote:
Kabuo wrote:I've heard of people getting offered like 2.5% interest on what would also be dischargable debt I think.
Yup, I got 2.5% interest through Sallie Mae with my parents cosigning. I also took out some Federal Stafford, but the majority of my loans are private.

baller.

sunynp · Post by **sunynp** » Sun Jul 31, 2011 12:12 am

I think the federal gov't has more payment plans to help you avoid default. I know there are ways to get forbearance and deferments on gov't debt. But the gov't will go after money to be repaid once you are in default. The govt can garnish wages directly without a court order.

Private loans go into default quicker and have less options. But private lenders may be willing to negotiate and take a steep discount on the money owed after you default.

For general info on what might happen in default:
http://www.finaid.org/loans/default.phtml

Of course if your parents are your co-signers and you default, they can be held liable for your loans.

dkt4 · Post by **dkt4** » Mon Aug 01, 2011 12:58 am

most private loans are tied to either LIBOR or the prime rate, so they're really not 2.5% forever.

firemed · Post by **firemed** » Mon Aug 01, 2011 1:07 am

NYC Law wrote:ALL student loans are non-dischargeable, private or public.

Oh... yeah... so I was going to pwn you.... but my example was made invalid by the 2005 law you linked to... so.... yeah... nevermind.

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