Law School Discussion

Law Students => Incoming 1Ls => Topic started by: cwhelan on May 31, 2010, 11:07:04 AM

Title: LOANS: Your debt load? Normal debt load?
Post by: cwhelan on May 31, 2010, 11:07:04 AM


I anticipate being 175k in the hole, which is right within what my school cover under its LRAP. But just because the school allows it doesnt always mean its a good idea.. is that a normal amount? How about you?
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: nealric on May 31, 2010, 11:25:49 AM
Graduated about 65k in the hole, but it's going to be 90k after my LLM. Debt makes me unhappy.  >:(
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cmd758 on May 31, 2010, 01:14:15 PM
My friend just graduated and had 150k and he said that is about normal. They have a new income based repayment plan for federal loans if you make under 70K though. You should look into it. It won't solve all of your problems, but it can take some stress off you if you are worried about $1500 a month loan payments starting six months after you graduate.

I figure I will have anywhere from 80k - to 140k. Hopefully it is the lower number because of interest.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: sonofapickle on May 31, 2010, 03:01:20 PM
Hm, depends mostly. Right now I have not used any FA and was waiting until Law School. The average cost per year seems to be 60k and my parents only pay 35-40k right now for me to attend college. If they could keep paying the same amount then I should be about 75-80k in debt. It depends upon your circumstances though; for people who are getting through school on their own the norm tends to be 150-200k in debt, whereas for people like me, nothing over 100k.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: the white rabbit on May 31, 2010, 06:30:23 PM


I anticipate being 175k in the hole, which is right within what my school cover under its LRAP. But just because the school allows it doesnt always mean its a good idea.. is that a normal amount? How about you?

It's not an unusually large amount, but I would say it's on the high end.  That's a lot of debt to have hanging over your head.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cooleylawstudent on May 31, 2010, 07:03:55 PM
take out what you need. Try not to go beyond that. When in doubt take out more and pay it back sooner if you dont end up needing it. Remember no interest adds up untill you graduate.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cwhelan on May 31, 2010, 11:25:37 PM
Numitor this sounds like what I will do for the first year. Take out what makes me feel like I dont need to worry about being broke, and then if I wind up not spending it all 1) make sure to consider it surplus and not act like "oh wow, free money to play with" 2) use it for legit expenses the following year and take out way less loans the following year.

and if what you say is true that the loans (i anticipate them all to be stafford or gradplus) dont accrue interest while im in school, there's no cost to me for getting too much money loaned out 1 year sooner, whereas if there was interest accruing i would have that cost of paying interest on money i didnt really need out yet.

anyway, sounds good.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cmd758 on June 01, 2010, 01:28:49 AM
Uh, isn't that the difference between subsidized and unsubsidized Stafford loans? When interest begins to accrue?
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: the white rabbit on June 01, 2010, 02:07:38 AM
Uh, isn't that the difference between subsidized and unsubsidized Stafford loans? When interest begins to accrue?

Unsubsidized Stafford loans accrue interest before graduation, as do private loans.  At least, that was the case when I was in law school.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cmd758 on June 01, 2010, 04:30:26 AM
Plus loans also accrue interest in law school
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cwhelan on June 01, 2010, 08:50:11 AM

Well, I didnt know the answer to that question. Now I do. Thanks. Given that interest will build as soon as I take it out, I've changed my plan. I will be throwing all the weight of my personal savings (besides a little set aside, I don't believe in $0 in my bank account as a good idea) at the first year. See how much it costs me. Get loans accordingly the following years.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cwhelan on June 01, 2010, 08:55:04 AM

I understood, by the way, from reading about loans, that only the subsidized Stafford loans have no accruing interest. At least that was the only one in which that was explicitly stated. But I am uncomfortable with finances and even though the natural assumption I made was that PLUS and the other kind of Stafford did have accruing interest, I hesitate to trust my own conclusion until someone explicitly states in a positive sentence, yes they do or do not come with accruing interest. So thanks for making explicit.
I feel like I have to get used to talking like a lawyer. I know that you're not trying to make this conversation an 'argument' but to me it comes off like that "Uh, isnt that the difference..." because it's not my style of speaking/writing.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: chi2009 on June 01, 2010, 02:56:39 PM
Watch the numbers on your student loan debt every year and you'll see the interest add up.  It's pretty sickening.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cmd758 on June 01, 2010, 03:13:23 PM

I have to get used to talking like a lawyer. I know that you're not trying to make this conversation an 'argument' but to me it comes off like that "Uh, isnt that the difference..." because it's not my style of speaking/writing.

Definitely taken the wrong way. And no, I am not going to argue about that.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cwhelan on June 01, 2010, 05:17:55 PM

Yeah, I know. The funny thing is I know but then it still somehow sticks out to me usually. Maybe I should be a preschool teacher instead? Then I can make sure everyone is super nice all the time.. ahhh.. anyway thanks for the great advice.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: chi2009 on June 02, 2010, 07:11:02 AM

Yeah, I know. The funny thing is I know but then it still somehow sticks out to me usually. Maybe I should be a preschool teacher instead? Then I can make sure everyone is super nice all the time.. ahhh.. anyway thanks for the great advice.

Based on my limited experience with small children, I would not say they're super nice all the time.  You're just getting honest, straight forward advice.  A couple classes with the right kind of law prof and you'll grow some thick skin in no time.  Sometimes I think people just get too busy to worry about sugarcoating things.  Don't take it personally; it's definitely not personal.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: DTEJD1997 on June 09, 2010, 12:07:02 AM
Hello:

I would caution you to think twice about having $175k in student loan debt.

I graduated from law school in 1997 and did not get a good job for several years.  My debt eventually went up to just over $100k. 

Eventually, I got back on track and I have had a VERY good job for the last several years.   So far, I have paid about $60k towards my loans & interest, but I still owe about $75k.

Lets assume you can make $100k a year after graduation.  Take home pay will be in the neighborhood of $60k.  You will most likely have to have a place to live , vehicle, food, clothing, etc....That is certainly going to be at least $2k a month, but probably will be at least $3k, maybe even more...That will leave you with $24k a year to build a retirement account, build a down payment for a house, AND PAY DOWN YOUR LOAN BALANCE.   I forgot to calculate interest on your loans....interest will probably be around 5% or so, which equates to $8k a year.

REMEMBER, for all intents & purposes, student loan interest is not tax deductible.

If you have a job earning $100k a year, you will probably be able to pay down your student loan debt by a maximum of $12-16k a year.  It will therefore take you a MINIMUM of 10 years to pay off your loan.  Probably a more realistic expectation is 12-14 years.  That is also assuming that you make AT LEAST $100K a year.

Of course, if you are making $125k or more, you will probably be OK if you are aggressive about debt repayment for 5-6 years.

Please be careful, and GOOD LUCK!
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: shayna on June 11, 2010, 08:49:17 AM
On certain loans, which people who pay completely for their legal education take out these loans, interest starts while you are in school.  Maybe it is wise to try and pay only the interest on these loans while you are in school.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: cooleylawstudent on June 11, 2010, 10:23:17 AM
you suggest paying loans with loans?

On certain loans, which people who pay completely for their legal education take out these loans, interest starts while you are in school.  Maybe it is wise to try and pay only the interest on these loans while you are in school.
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: fllaw on June 12, 2010, 10:52:40 AM
Before going into massive debt in an industry that may not offer the rewards you anticipate, you might want to read this:

Effects of Being in Debt

http://www.ehow.com/about_4602144_effects-being-debt.html (http://www.ehow.com/about_4602144_effects-being-debt.html)

and this:

The Next Bubble: Law School Tuition

http://abovethelaw.com/2010/04/the-next-bubble-law-school-tuition/ (http://abovethelaw.com/2010/04/the-next-bubble-law-school-tuition/)

Quote
By Elie Mystal

Itís one thing when I write about how crushing law school debt has impacted the value proposition of going to law school. Iím just repeating what every jobless 4L already knows. And prospective law students, 0Ls, have already proven that are too full of themselves to take out a calculator before they commit to three years of debt financing.

This is very important information. You may believe that this happens "to the other guy" but don't be so certain.

  College Grad Exposes Everything Thatís Wrong With 0Ls 

http://abovethelaw.com/2010/06/college-student-exposes-everything-thats-wrong-with-0ls/ (http://abovethelaw.com/2010/06/college-student-exposes-everything-thats-wrong-with-0ls/)

Quote
By Elie Mystal

We spend a lot of time telling prospective law students to carefully consider the decision to go to law school. And still they come. We tell prospective law students that law school is expensive and the job market is weak. But still they come, in record numbers.   
Title: Re: LOANS: Your debt load? Normal debt load?
Post by: mac n cheese on June 21, 2010, 12:18:31 PM
Good stuff! From a psychological perspective, once we have deemed something to be great we tend to overlook its not so great effects.  Its kind of like having selective memory. As far as the price - increased demand = increased price.  The price won't decline until a law degree is somehow cheapened in the eyes of the market which will never happen because people attracted by the profession just don't like to appear cheap ( at least not until the student loans hit....) What can I say, I'm in the same boat. I know it will cost, I know I'll have regrets when its time to pay the bill, but i'm gonna do it any way for a few reasons:
1) I want to help people with their legal issues. I know it sounds generic and cheesy but I want to facilitate Justice because it will make me feel whole! As you know, people do some really crooked stuff to other people. I know what your thinking: "be a cop". Negative, its not my style.

2) Law is fascinating - I will truly get off on knowing the rules, how they've come about, and how they affect order. I will take a great sense of pride in educating my clients and helping them.

3) I love to read, write, and analyze, searching for the answer. It's like a game and so sweet when you win. I could do it everyday with pleasure so therefore, my work won't be like work at all. (completely justifies the cost of tuition because how many people can honestly say they love their work)

4) I don't want to regret not getting a law degree.
Truthfully,

MaCNCheese