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NeverTrustKlingons

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LRAP Strategy Question
« on: June 28, 2008, 04:46:01 PM »
Suppose I have a school with a very favorable LRAP program.  Suppose I have the funds to pay for law school out-of-pocket, but not without making big sacrifices.

Is it better to pay it (always better to avoid debt?), or take some loans and bank on getting an LRAP-qualifying job?
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Bulldog86

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Re: LRAP Strategy Question
« Reply #1 on: June 28, 2008, 05:27:41 PM »
How much money are we talking about spending here? Full-price, $150-200K level? Do you want to work an LRAP job or would you just be getting it to get your loans forgiven? If you do want that job, how confident are you that you will still want that job in three years, even while your classmates are (maybe) drawing six figures?

That said, student loans are relatively cheap money. And if you (evidently) have hundreds of thousands of dollars laying around (or something like that?), couldn't you get loans now and if the LRAP doesn't pan out, just pay them back when you graduate? The interest accrued in 3-5 years wouldn't be too terrible, would it?
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StevePirates

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Re: LRAP Strategy Question
« Reply #2 on: June 29, 2008, 04:38:50 AM »
Take the loans, and save your money.   If you have the money now, you should have the money later right?
If you get the LRAP then great, you've just made a nice bankroll.  If you don't you can just pay off your loans with relatively little interest attached.

jacy85

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Re: LRAP Strategy Question
« Reply #3 on: June 29, 2008, 10:01:24 AM »
I'd probably take out some Stafford loans, and pay the rest.  STafford loans really aren't that terrible to pay back, the interest rate is relatively low, etc.  I'd pay cash instead of taking out gradplus or private loans though.

This way, with the stafford loans, if you do end up taking advantage of LRAP (which, despite the fact that schools sell it as awesome, tends to be pretty limited), that's great.  The gov't is also starting their own LRAP program that you may qualify for.  But if you end up doing something where you don't qualify for LRAP or decide not to do public interest/gov't work, the stafford loans aren't too bad to pay off.

Ninja1

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Re: LRAP Strategy Question
« Reply #4 on: June 29, 2008, 05:50:18 PM »
At least take out the subsidized Staffords, no interest accrues on them while you're in school. The max amount you can get is around $6,500/yr, which isn't much, but it's something.

Also, depending on what happens with inflation, the value of the dollar, and wages, you might be able to come out ahead if you max out your loans. Probably not, but it's possible.
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john jacob

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Re: LRAP Strategy Question
« Reply #5 on: July 09, 2008, 07:47:28 PM »
bump, I'm considering this as well.

I'm maxing out stafford, both subsidized and unsubsidized to the tune of 20500 a year (8500 is subsidized).

The question is whether to take out 20k over 3 years for the rest in GradPlus loans or to just pay it.

Over 10 years, I pay 20000 in interest on the 60k stafford loans.

Over 10 years, I pay 10000 in interest on 20k gradplus loans.

If I got a federal job paying say, 40k a year, I'd pay the difference between 150% federal poverty (15k) and income minus taxes. Let's make that figure 20k.

3k a year.

10 years, 30k paid, rest is written off, which would be 90k.

Sounds good, assuming I get a gov't job. If I got a firm job, I wouldn't care about the debt.

thoughts on my math?

big - fat - box

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Re: LRAP Strategy Question
« Reply #6 on: July 10, 2008, 07:15:08 AM »
Read the LRAP terms carefully. Your plan might not work because many programs treat any assets as income - you have to sell those assets to pay debt before LRAP kicks in. Spousal income is often taken into account as well.

I would do what Jacy said, and pay whatever you can up front and see if you can get by on only Stafford loans.

Suppose I have a school with a very favorable LRAP program.  Suppose I have the funds to pay for law school out-of-pocket, but not without making big sacrifices.

Is it better to pay it (always better to avoid debt?), or take some loans and bank on getting an LRAP-qualifying job?

cwhelan

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Re: LRAP Strategy Question
« Reply #7 on: July 15, 2008, 04:32:00 PM »
Yeah, you need to rethink. I know Georgetown and UCLA for example both consider assets. Most schools with LRAPs do. Read the fine print. UCLA allows you to accumulate 10k in assets each year (10k, then 20k, etc). Anything above 10k a year in savings that you've gotten from somewhere or had before is going to be counted, and the LRAP wont cover you. Similar situation at Georgetown, except there's no buildup 10-20-30.. you can have around 20k in assets, I believe.