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What do most people do with loan payments when going clerkship --> Biglaw?
Posted: Thu Apr 20, 2017 4:38 am
by dasq5511
Are most people on IBR while completing clerkships and then switching to standard payment plans when going to biglaw? Does doing IBR + LRAP cover any of the principal or does your total loan balance basically stay the same over the course of the year you're doing a clerkship? Basically trying to find out how much of your loan is reasonable to pay down if/while you do a clerkship.
Re: What do most people do with loan payments when going clerkship --> Biglaw?
Posted: Thu Apr 20, 2017 5:58 am
by cavalier1138
It depends on how much debt people have and what their future employment looks like.
Just bear in mind that a lot of LRAP programs don't cover clerkships at all, and if they do, they often require that you go into PI afterwards (or pay back any funding).
Re: What do most people do with loan payments when going clerkship --> Biglaw?
Posted: Thu Apr 20, 2017 10:11 am
by Thelaw23
I would imagine the PAYE repayment plan could come in handy if you know your salary might fluctuate like that.
Re: What do most people do with loan payments when going clerkship --> Biglaw?
Posted: Thu Apr 20, 2017 3:29 pm
by RedPurpleBlue
dasq5511 wrote:Are most people on IBR while completing clerkships and then switching to standard payment plans when going to biglaw? Does doing IBR + LRAP cover any of the principal or does your total loan balance basically stay the same over the course of the year you're doing a clerkship? Basically trying to find out how much of your loan is reasonable to pay down if/while you do a clerkship.
Very few LRAPs cover clerkships.
It depends on how much debt you have, but using IBR/PAYE your loan balance is either going to stay about the same or increase a bit by the end of your clerkship. Then, when you get that signing bonus, you can instantly create your emergency fund. With an emergency fund, you can now throw almost all of your earnings beyond COL at your debt until it's gone. Getting a clerkship is going to be a net $ loss early in your career, unless you get a Kellogg Hubner type of bonus. That's just unfortunately how it works.
Re: What do most people do with loan payments when going clerkship --> Biglaw?
Posted: Thu Apr 20, 2017 3:31 pm
by GreenEggs
Depends on your institution's LRAP program. CLS will make the payments for you with an LRAP loan, but then the loan is repayable at some fixed % back to CLS if you go to biglaw
Re: What do most people do with loan payments when going clerkship --> Biglaw?
Posted: Thu Apr 20, 2017 3:37 pm
by cheaptilts
Question: Assuming like 100-150k worth of debt, does making REPAYE/PAYE payments make sense over IBR or any other loan payment options? Assuming you don't want the balance to increase.