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Be Careful with Student Loans for Law School

Student loans are bittersweet.

They allow you to pursue your dreams, improve your earning potential and join a well-respected group of legal professionals. But they can also total more than $100,000 by the time you earn your JD, take years to pay off and can’t be discharged.

Yes, when it comes to student loans for law school, the best thing you can do is to be careful. Here are three tips to help you do just that:

Tip One: Only borrow what you absolutely need
A lot of people view student loans as “free money” because they don’t have to start paying it back until they’re finished with school. They get their checks from the government, pay their tuition and then buy a lot of things they don’t need – new shoes, the new iPad and a new TV.

This is a bad idea because that $499 iPad will cost you significantly more money when you actually have to pay for it.

Only borrow what you absolutely need for tuition, books and living expenses.

Tip Two: Minimize your spending
You know that $3 cup of coffee you drink every morning? Over the course of a year, you’re spending $1,095 on coffee. Skip it. Brew your own instead. Apply the $1,000 a year you’ll save (or $3,000 over your entire law school career) toward paying off your loan.

Look for other ways to save money, too. Carpool whenever possible. Drink less expensive wine. Pack your own lunch every day. Doing these little things can add up to more than $4,000 a year that you can apply toward paying off your loan.

Think about it: Instead of graduating with $100,000 in debt, you can be under $90,000 easily. That makes a big difference.

Tip Three: Improve your chances of paying them off quickly
One of the things we’re hearing from law school graduates is that they’re having difficulty finding jobs right now. And when you can’t find a job, you can’t pay off your loans.

So while you’re in law school, do everything you can to improve your ability to find a job (which means doing everything you can to graduate in the top 10 percent of your class). Get a law tutor. Study like mad. Network. And gain practical experience. Heck, you can probably use some of that money you’re saving on coffee to find a quality law tutor.

So while law students are setting themselves up for every successful (and financially rewarding) careers, don’t let that get in the way of financial planning and budgeting. After all, if it takes you 7 years to pay off your student loans instead of 3, that’s 4 more years of being in debt; not to mention the increased amount of interest you’ll have to pay. And nobody likes to be in debt, especially lawyers.

 

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