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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.

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

Kabuo wrote:the plan was net biglaw or declare bankruptcy

Wow...seems like a slightly risky plan.

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?

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

Kabuo wrote: people getting offered like 2.5% interest

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?

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.

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.

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!

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

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.

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).

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!

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

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.

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.

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.

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.

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.

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

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.