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Future JD Students

While in Law School: Living on a Budget

Since loans often are the primary funding source students use to pay for law school, it is important to think about how much you should borrow. It should be the minimum amount you need to attend the law school you choose and to achieve your goal of becoming an attorney. Determining that amount requires that you estimate your in-school budget to determine how much law school will cost for you. Then you need to estimate how much you will be able to contribute from your own resources (and from your family) as well as any scholarship or grant funding you expect to receive. The difference between what it will cost and what you have from other sources should represent the amount you will need to borrow. And hopefully it is less than what the school has indicated you are eligible to borrow. The amount of loan funding included on your financial aid notice from the school is not prescriptive—it is not what you should borrow—but rather, it represents the maximum amount you are eligible to borrow based on the information you provided in your financial aid application materials, the Cost of Attendance for the school you choose, current federal regulations, and school policies.

The maxim “Live like a student now or you will live like a student later” is a good one to remember. Consult the Cost of Attendance (COA) for each school you are considering to obtain an estimate of the living expenses you might incur to attend that school. Doing so will allow you to estimate your budget accordingly. Track your current spending habits and compare them to the COA at those schools. To reduce spending, consider sharing housing costs with a roommate rather than living alone while in law school (check with the school to see if they offer any assistance in finding a roommate). And watch what you spend on food and entertainment. These expenses often can be budget busters. Bring your lunch rather than buying one on campus each day. While law school may be an excellent long-term investment, you will have to repay what you borrow (with interest), so borrow wisely. Remember, not all lawyers earn the highest salaries.

But, remember, you also will need funds to cover your living expenses during the summers between each year of law school, and as you prepare for and take the bar exam after you graduate. You cannot receive “extra” financial aid to cover these expenses, so make certain you account for them as you decide how much to borrow each academic year. You may need to use your savings or earnings from employment for these summertime and postgraduate expenses. Also note that current federal regulations do not allow schools to include the cost of repaying your prior consumer debt (such as credit card debt) in Cost of Attendance. So it is important to pay off any existing consumer debt before you start law school, if possible. However, repayment of your prior education loans should be eligible for deferment while you are in school.

Interest on Direct Unsubsidized and Direct Graduate PLUS loans accrues from the date funds are disbursed. It accrues as “simple” interest; it is not compounding. The accrued interest will be capitalized (added to the principal loan balance) when the loans enter or re-enter repayment (six months after you are no longer enrolled in law school). As such, you will not be paying “interest on the interest” while you are in school.

You will not have to start repaying the federal loans you borrow to attend law school until at least six months after you leave school. You also should be able to postpone repayment of any federal (and perhaps, private) student loans you borrowed prior to enrolling in law school. Contact the loan holder or servicer of any prior student loan to investigate your deferment or forbearance options and to learn how to pursue those options.

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