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January is the month where student loan
applications become due. Nearly eighty
percent of law students rely on student loans to finance their education. At large, the student loan debt of about 40
million Americans comes to around $30,000 per student, and we know
that the debt load for law students is much, much more.
Making the decision to borrow might seem
easy. All you do is ask, it’s probably
going to be approved, you attend classes, and about 6 months after graduation
your terms kick in and your jaw hits the ground. How did I end up owing so much? Where did all this money go? Borrowing should be far from an easy
choice. Take these three steps to help
you research and create the best financial aid package for you.
1.
Search
for as many scholarship opportunities as possible. Remember to look in unique places for scholarships. Go to your employer or the employers of
friends or family who may offer scholarships or reimbursement plans. Look to community organizations, fraternal
orders, or bar associations. Check with
your school, financial aid office or with career counselors for additional
scholarship opportunities. Organize what
you find by deadlines and make a goal to apply to a certain number of
scholarships each week.
2.
Decrease
how much you borrow. Too often students
take out more loans than they actually need.
Money is spent on electronics or parties rather than on education. Do you really want to pay for last night’s kegger for thirty years? Probably
not. Learn to budget and live for
less. Take measures to decrease your student debt prior to graduation. Make an effort to negotiate your tuition and eliminate
the charges the school includes into your tuition that you aren’t using (i.e.
computer lab, gym fee, athletic tickets).
Take on part-time work (if it won’t cause your grades to suffer) to
supplement your income.
3.
Research
the loan market. Private v. Federal
loans? What will work best for you? As you may know, there were many changes made to the interest rates of federal student loans this past summer. What your loan terms are this time will be
different than loans you may have borrowed last year or earlier. Be sure to read and understand the terms of
your loan (which is well described in Chapter 5 of my book). You might be able to find a private loan that
has better rates, although the government often gives better repayment options
– just be sure to weigh what will be better for you long-term. Here is a helpful
article when considering private loans.
If you do take out private loans, make sure you have a good credit score
so that you can get the best interest rate as possible.
It may be a lot of work, but it’s
definitely worth the time to prevent a lifetime of financial stress and
hardship in the future.
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