Sunday, January 22, 2006

The panic begins to set in...

My mom called me a couple weeks ago and said, "So, you know your private loans start at the end of January, right."

Oh yes, that's it. The tightness in my chest, the tunnel vision, the sweaty palms. The tiny, triple digits in my bank account dwarfed by the massive, six-digit number printed on my lender's letters.

It's pretty fair to say that I hate my Private Lender. I didn't have this blog way back when I had a death-match with PL when they forced me to get a co-signer for my last two years of law school, for no reason whatsoever, even though my credit was still good (actually, the angry dual was over the fact that when they decided this, I was in studying in Chile for the summer - a representative left one phone message with my subletter in DC, who forgot to tell me, and since PL couldn't be bothered to notify me any other way, they just denied my loan for my second year, which I didn't discover until I went to go pick up my check for fall semester. Try explaining that to your landlord. Or the grocery store.) Then the second death match came over my undergraduate loans, which they took out of in-school deferment during my second summer in law school, for no reason at all.

Now my mom, as my cosigner, has a whole new $100,000 reason to fear my death, aside from that whole 'daughter' thing. She also gets all my mail from PL over a month before me, because they can't seem to figure out that I've moved. I changed it once on the website, but it didn't take, and now they website just gives me errors. I keep forgetting to call them, but pretty soon the post office is going to tire of this this shell-game and stop forwarding my mail.

Anyway, my loans start January 27, and I have absolutely no idea how I'm going to pay them. I'm thinking about selling a kidney on the black market. Those are the organs that grow back, right? No? Well, I never felt it was earning its keep anyway, so I'm going to have to outsource it. I digress. I just tried putting the loans in deferment, but apparently private lenders aren't as amenable to that idea as the federal government is. Oh, and when I tried to download the form so I could do some horrible "interest only payments for two years" program, the file was some nonsense that wouldn't open.

Ah, the panic. The panic. Did any of you out there consolidate your private loans? I just submitted an app to Graduate Leverage, but other ideas are appreciated.


At 9:10 PM, January 22, 2006, Anonymous Kirk Diogu said...

i did private loan consolidation. it's a fair deal, if only to make repayment easier. plus it should help your credit score. you're probably too late to get the loans consolidated before repayment begins, however - so you'll have to pay out more money initially to your lender than if you had consolidated earlier. if i remember correctly it took 6 weeks or so, but hopefully it'll be quicker for you.

the loan interest rates are high compared with federal consolidation, so that sucks. they definitely should be paid off first. i guess your interest rate all depends on your credit score, too. but i would expect something around 7%+ at a minimum. private lenders also aren't big into forebearance b/c then you look like a default risk to them - this will likely hurt your future interest rate with them.

having read your to do list, you should probably pay off credit card, private loan, federal loan in that order. credit card debit is the WORST! every dollar you pay over the minimum due decreases the term of your debt exponentially. get on those credit cards, or consider doing one big balance transfer to a discover platinum (or the like) - no interest for a year so all of your money kills the principal.

At 9:36 PM, January 22, 2006, Blogger Kelly said...

I feel your pain! A friend recommended Graduate Leverage to me and I submitted an application. They emailed me the next day saying "All of your federal loans are consolidated." (Well, duh) "Please call 800-.... to talk about your private loans." I haven't done that yet, but I'm going to.

I'm making payments on one of my private loans, but when the rest of them come due, I'm hoping I'll have them all consolidated by then and be able to figure something out deferment-wise. I just found out that my PL wants $50 PER LOAN to put them in deferment/forbearance. Eek! If I had $50 per loan, I wouldn't need that whole silly deferment thing, now would I?

At 11:28 PM, January 22, 2006, Blogger shell said...

Youch! I was thinking about transferring but will probably not do that since my law school has low tuition. I guess I'll just stay here so I won't have to worry about loans.

At 1:45 AM, January 23, 2006, Blogger Roonie said...

Three words for you:


Or, even better:


That's what I've done.

At 9:53 AM, January 23, 2006, Anonymous Kirk Diogu said...

just be careful with forebearance and deferment b/c it may trigger higher interest rates automatically - that would hurt you going forward. plus the interest will keep accruing on a growing balance. deferment would almost surely trigger higher rates and might even waive all incentives for timely payments (i.e. .25% reduction in interest etc)

the contract attorney jobs don't pay well? i was under the impression that they were of uncertain duration but paid ~$40-50 and hour.

At 10:03 AM, January 23, 2006, Blogger Heather said...

Thanks for all the comments. Roonie - I kind of have to agree with Kirk on this one. Forbearance does not look good on your record. Deferment isn't as bad, though it's nice to be able to avoid both. My fed loans are in deferrment right now, until May. For me, I think this is best - I wouldn't be able to pay both my fed and private loans right now, but if I only have to do one, I can maybe swing it - and the interest is way higher on my private loans.

Kirk - Contract attorney jobs DO pay well if you can get them. The problem in DC is that the DC Circuit court made a ruling last summer that attorneys working on legal doc review in the city MUST be DC barred. As you know, I'm CA barred. I'm in the middle of filing my DC waiver app - but it requires TONS of paperwork from other sources that I'm still waiting on, a heafty $700, AND it takes them about 6-8 months to process your application. So until then I'm stuck doing paralegal work for half that salary - most of which I'd rather put towards my credit cards, than my private loans. Basically, the DC courts screwed me, because it's not like there's special DC law on it that is going to change my doc review skills.

At 10:30 AM, January 23, 2006, Blogger HomeImprovementNinja said...

heather, I know DC came out with that stupid rule (talk about kicking someone when they are down). Do they have that same rule in VA? I heard that some firms were thinking of moving their doc review to some of the empty office space in Rosslyn if they couldn't get enough DC-Barred attys to handle their work.

By the way, I don't mean to freak you out even more, but on top of the money that you have to pay to waive in, DC makes you take an all-day CLE for a few hundred bucks where they teach you things that you will never need to know (unless you decide to chase ambulances for a solo practicioner in DC).

It's a few hundred bucks, all-day long, and really boring, but it comes with an herb-roasted chicken breast and basmati rice it's not all bad, I guess.

At 12:31 PM, January 23, 2006, Blogger Heather said...

Ninja - Well, the requirement is made, I believe, for lawsuits filed in DC courts, not whether or not the work is being done in DC. So even if they moved their warehouses out to Rosslyn, I'd still have to be DC barred if it was a DC case I was working on. I'm sure there are some VA/MD cases going on out there, but the problem is that almost all new attorneys got their bar out-of-state, banking on the dc waiver process and the 'benefit' of being dual barred - so there are a thousand temp attorneys out there looking for the 10 placements with out-of-state doc review cases. That's the real problem.

Thanks for the heads up on the class, too, although that's not surprisng. CA requires me to pay out the ass for a plethora of CLE classes over the next five years, which is going to be awesome. At least DC won't charge me for the class until 6-8 months after I pay for the application, so hopefully I'll have more money in my "purely for being graced with the title 'esquire' with no other purpose whatsoever" fund.

At 1:07 PM, January 23, 2006, Blogger HomeImprovementNinja said...

Yikes. Too late to help you now, but tell your friends to take NY instead.

NY has a BS CLE requirement also, but if you are out-of-state and comply with whatever the local requirements are, then you are okay. Since DC doesn't require CLE (except for the first one) you don't have to do any for NY.

A friend of mine was barred in Delaware and DE makes you take the CLE *IN* DE. So he literally had to drive home and go to an office where they made him sit there while some fat guy stuck a 2 hour tape in a VCR about Alcoholism in the legal profession.

My friend was PISSED! "You couldn't just mail me the fucking tape?"

At 11:04 PM, January 23, 2006, Blogger Roonie said...

I have no choice. I have to defer/forbear.

At 12:24 AM, January 24, 2006, Blogger Heather said...

well, you gotta do what you gotta do. it's better than defaulting. and it's better than not paying other bills just to pay the loan. don't worry, when we're on our respective deathbeds, we're not going to be thinking, "god, i wish i'd paid off that loan more quickly."

At 4:18 PM, January 24, 2006, Blogger Roonie said...

You are right. I'm going to do my best not to think about the negative aspects of it while I can't do anything to change it. But seriously, consolidate your private loans if you can (Chai has oodles of advice on this), and stretch them out as long as you can (for now, anyway) or pay in a graduated sort of scheme (more now, elevated along the way). You should do a side job and have those funds go just to the loan fund, nothing else (at all). It'd give you a little more peace of mind financially until DC sees you for the brilliant legal mind that you are. Considering my career goals, "working two jobs" is going to be my middle name. And the name of my first-born.

At 7:12 PM, January 24, 2006, Blogger Heather said...

Well, even if you pay off your loans as fast as you can, it's still going to take you around 10 years. I don't see any reason to pour my money into them. I just want to be able to make the minimum payments. Especially with the low-low-rate federal loans. I'd rather pour my money into my higher-interest, variable rate credit cards. When I pay those off, I'd still rather put the money in a high-interest savings account. Hell, I'd rather blow it all on a vacation to Tahiti. Fuck the lenders, they'll get their money one minimum payment at a time, til death do us part.


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