Law School Discussion

Loans?

LBJFan

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Re: Loans?
« Reply #10 on: July 02, 2007, 11:36:55 AM »
It disproves the other poster's statement that UCLA gives $19k
Ibjfan said that UCLA gives a little more than $19K for living expenses.  I think $19,053 qualifies.  The reason we are subtracting out tuition is because you can't [presumably] save any money from the tuition portion...the school sets the tuition portion of the student budget at about what they charge. 

For a more concrete example:  My total cost of attendance is around $22,000.  Tuition is $10,000 (making living costs $12,000) and I have a $5,000 scholarship.  I can only borrow $17,000, but I still have to pay $5,000 in tuition.  The only money that I could save by living frugally is out of the $12,000.




THANKS ^^^

Thats what Im trying to say. COL (cost of living) is what it is. If you want to save money, you have to do it out of what they give you to live on.

I go to UCLA...I'm pretty sure I know what UCLA gives for COL. I got a total aid equaling about 46K. Yet and still, I only got roughly 19,500 to live on. The school takes their cut up front.

I think people are confusing cost of living with cost of attendance.

Re: Loans?
« Reply #11 on: July 02, 2007, 12:36:14 PM »
Ok, I see you are talking about cost of living.  But the OP is talking about Cost of Attendance.

$50k cost of attendance is not unheard of.

LBJFan

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Re: Loans?
« Reply #12 on: July 02, 2007, 02:25:47 PM »
Ok, I see you are talking about cost of living.  But the OP is talking about Cost of Attendance.

$50k cost of attendance is not unheard of.


I understand. 50K COA is extremely normal if not on the low side for most law schools.

But...the fact that the OP might be eligible to get 50K doesn't mean that he'll be receiving 50K that he can invest. The only money he'll be able to put in his pocket or invest or whatever is the COL money he receives. So, its really irrelevant that he could max out at 50K. The only relevant part is how much excess he'll have to live on.

Having between 19-20K to live on, it becomes slightly more difficult to pinch enough pennies to justify maxing out loans if you dont have to.

jarhead

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Re: Loans?
« Reply #13 on: July 03, 2007, 01:35:07 PM »
maybe i misunderstood but i think that's what he was saying. after he pays tuition, he wants to figuere out what he could live on and invest the xtra, at least that's what it sounded like to me.

LBJFan

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Re: Loans?
« Reply #14 on: July 03, 2007, 01:48:23 PM »
maybe i misunderstood but i think that's what he was saying. after he pays tuition, he wants to figuere out what he could live on and invest the xtra, at least that's what it sounded like to me.


I get this part. My original point was that...I have yet to see a school that budgets more than 19-20K for COL. Getting 30K would make investing something easier to do...but, I can't imagine why a school would give someone that much to live on when even schools in the most expensive COL cities dont.

I made this point becasue...if the OP ends up with about 19K to live on (which is more realistic and more probable) then its going to be harder to invest enough so that this strategy would be useful.

jarhead

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Re: Loans?
« Reply #15 on: July 03, 2007, 03:37:03 PM »
yeah i get the col vs coa stuff, whether his numbers are off or not his point is still valid, my roomate at the time (had way less than 19k a year to live off) and he still invested and survived. if the guy lives like a student it's totally doable particularly in the south where you can get a decent apartment for under 700 bucks a month. will he have 10K to slap down in a CD no but if he can squirrel away 2500 it's still worth it.

Re: Loans?
« Reply #16 on: July 04, 2007, 05:46:33 PM »
There are many ways to get private law or private graduate loans over and above what your school decides your cost of living should be.


As to the OP, what you're kind of talking about is Arbitraging.  If you can find a CD or "income investment account" with an interest rate higher than your loan, then you should think about doing so, because you'll make money in the long run.

That being said, you have to be dedicated, disciplined, and smart.
Kind of like law school itself, no?

The trick is finding safe yet lucrative investments.  You should consider Canadian Royalty Trusts, or REITs.  CDs will likely give you less than your loans will cost you.  They can be useful for stemming losses related to interest from loans, but they won't make any money for you.

I am doing this strategy for law school.  I chose a school with a full ride for this very purpose.  I should wind up with the same student loans as an average student, but with a house halfway paid at the end of school.
On the other hand, I may have miscalculated everything and wind up homeless and destitute, so do a lot of thinking before you take more loans than you need to.

Strong

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Re: Loans?
« Reply #17 on: July 04, 2007, 06:17:44 PM »
There are many ways to get private law or private graduate loans over and above what your school decides your cost of living should be.

As to the OP, what you're kind of talking about is Arbitraging.  If you can find a CD or "income investment account" with an interest rate higher than your loan, then you should think about doing so, because you'll make money in the long run.

If you are talking about fixed income, you won't be able to get a high enough rate to make up for inflation.

All things being equal, would you borrow at 7% to invest at 10%? The answer should be no.

Re: Loans?
« Reply #18 on: July 05, 2007, 06:33:05 AM »
All things being equal, would you borrow at 7% to invest at 10%? The answer should be no.

What are you talking about?  The answer is yes.  The danger is that you won't earn the 10%...investing does come with risks, but 10% is not an outlandish return rate.  If someone were to follow your advice, the are giving away 3%.

There might be other reasons not to invest (you don't know anything about it, you don't have the time to pursue this option, etc.), but all things being equal you should borrow money at 7% if you can invest it at 10%.

Re: Loans?
« Reply #19 on: July 05, 2007, 07:29:49 AM »
I was thinking of investing some of my loan money into sheriff sale real estate. Several homes in my neighborhood have been sold at around 75% discounts (around $15-$30 grand). You have to put down 10% and find the rest of the money within thirty days, usually a mortgage. I wonder if I stay at home with my parents and manage money correctly, will I be able to get a great return on my investment.