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Author Topic: Loans for part-time students with significant income and savings?  (Read 1577 times)

ndun

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Does anyone here have experience with students loans
for part-time J.D. programs?

Specifically, does the government count your income
and/or savings against you?

How do private lenders factor these things in?

I hope to keep my current job while in school.
I make good money, but wonder if my employer might not
take very well to me going to law school part-time.

Am also wondering if lenders expect me to use up
all my savings before they'll loan me money.

I would rather have a cushion ...

Fordham J.D. Candidate, Class of 2011

ndun

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Re: Loans for part-time students with significant income and savings?
« Reply #1 on: November 26, 2007, 01:20:10 AM »
Also, I take it the first step in any case is to file FAFSA?

Which I have to wait until January 1st to do?

Fordham J.D. Candidate, Class of 2011

waitlisted

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Re: Loans for part-time students with significant income and savings?
« Reply #2 on: November 26, 2007, 02:11:58 AM »
Does anyone here have experience with students loans
for part-time J.D. programs?

Specifically, does the government count your income
and/or savings against you?

How do private lenders factor these things in?

I hope to keep my current job while in school.
I make good money, but wonder if my employer might not
take very well to me going to law school part-time.

Am also wondering if lenders expect me to use up
all my savings before they'll loan me money.

I would rather have a cushion ...



General rule:

Loan eligibility = Total cost - 1/2*(LAST YEAR'S MAGI) - 1/5(CURRENT NET WORTH) 

Where: CURRENT NET WORTH does not include any credit cards or car loans or most other non-real-estate debt you may have.

More or less. 

All numbers recalculated yearly.

HippieLawChick

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Re: Loans for part-time students with significant income and savings?
« Reply #3 on: January 02, 2008, 11:18:40 PM »
You can get loans if your income is low enough.  The loan probably won't be subsidized though. 

ndun

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Re: Loans for part-time students with significant income and savings?
« Reply #4 on: January 10, 2008, 12:03:36 AM »
I've done some research since I first posted, and my understanding
is as follows ...

1) The Feds will loan you money according to rules very similar to undergrad, except that graduate students are assumed independent.

Subsidized Federal loans are limited to your expected need, or the subsidized loan cap ($8500/yr), whichever is lower. Expected need is (TCA - EFC), where TCA is the total cost of attendance (tuition + living exp) and EFC is your expected contribution (50% of previous year's after-tax income plus 20% of current assets). [N.B. 50% of NET income, not GROSS as previously suggested.]

Even if your EFC is 100% of the TCA, you can still get unsubsidized Federal loans up to the combined Federal cap (total subsidized+unsubsidized limited to $20500/yr).

2) Law schools may have their own "institutional methodology" which they use to determine if they will loan/grant you additional money. They may inquire about your parents' income/assets even if you can prove you are independent.

3) You can borrow the difference up to the TCA using Grad PLUS and/or private loans, assuming you are creditworthy.

...


Say tuition is $30k and the law school officially estimates living expenses at $20k, for a TCA of $50k/yr. If you made $70k after taxes the year before, and you have $50k in assets, then your EFC is

($70k * 50%) + ($50k * 20%) = $35k + $10k = $45k

Your expected need is $5k, which you can borrow subsidized. You can also take another $15.5k in unsubsidized loans to bring your total Federal loans to $20.5k.

If you need more money (and you will), you can borrow up to $29.5k from a private lender to bring your total up to the school's $50k official TCA estimate. Private lenders may or may not be allowed to lend you more than that, so hopefully the school's $50k total (based on $20k living expenses) is realistic, or you'll be dipping into your savings.
Fordham J.D. Candidate, Class of 2011

ndun

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Re: Loans for part-time students with significant income and savings?
« Reply #5 on: January 10, 2008, 12:04:59 AM »
If anyone is familiar with the process, please let me know if my analysis is correct.
Fordham J.D. Candidate, Class of 2011

Hammerstein

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Re: Loans for part-time students with significant income and savings?
« Reply #6 on: February 11, 2008, 09:48:30 AM »
If anyone is familiar with the process, please let me know if my analysis is correct.

The formula you cite is fairly accurate, but not exactly.  IIRC, someone else on the forum posted a link with the official formulas in it -- not sure where that is right now.  Based on your age and number of dependents, a certain amount of your assets are protected.  For example, I remember that under 25 year old applicants with no dependents have $6600 protected -- so if their total income plus assets is under $6600, they get a 0 EFC automatically.
CLS 2011.  All done.