Paying back loans and managing student debt

If you’re in law school, the chances are good that you have taken out loans to attend. If you’ve taken out loans, hopefully you are thinking ahead to how you can pay back those loans. This blog post offers several tips for creating your debt management strategy.

Get into as little debt as possible while you are in law school

It seems obvious, but it is worth stating that the first step to clearing your student debt is to acquire as little debt as possible initially. Beyond making a budget and living frugally, there are a few options you can investigate to further this goal:

  • As an Assistant Rector, you get a free furnished room on campus, a meal plan, a stipend every semester and a tuition credit.
  • Be a Notre Dame debate coach. The undergraduate Notre Dame Debate Team frequently students as Assistant Coaches. The position is paid and the time commitment is just 2-4 hours a week (plus a handful of weekends throughout the year). During the week, the Assistant Coach helps run a debate and public speaking class and takes turns with the Head Coach attending tournaments with the team on certain weekends.
  • If you are working in an unpaid position over the summer, you can get Federal Work-Study funding. This money is a grant, not a loan, and does not need to be repaid.
  • Be open to unconventional and often unexplored routes for securing additional funding such as essay competitions and outside scholarships. The University of Richmond law school maintains a legal essay contest catalog that you can explore here. The ABA also maintains a scholarship database that you can find here.

Get debt counseling and consume AccessLex as much as possible

Notre Dame has contracted with AccessLex, which has a program called AccessConnex offering one-on-one counseling with a trained financial counselor. This service is free and available to all students, even after graduation. The website with more information is here. Schedule an appointment with Theresa Popp Braun, the representative that works with NDLS. You can sign up for an appointment with her online here.  

In addition, AccessLex has a variety of free programming and tools, including a student loan calculator. Download their free booklet with information about different methods for repayment. Check out their website, monitor email for program announcements and follow them on Twitter for more. @AccessLexInst.

In addition to AccessLex, other organizations offer tips you can use. Use these tips to give you ideas to incorporate into your plan. Sofi offers this overview of how to tackle law school debt. And the Department of Education offers advice on managing loans as well. Nerdwallet has advice, as does Business Insider. You will see overlap, and that’s good. The more repetition you see, the more likely the advice is to be sound.

Take advantage of Notre Dame Loan Repayment Assistance (LRAP)

Any J.D. graduate of Notre Dame Law School who expects to earn an LRAP Adjusted Salary under $70,000 can apply for LRAP assistance for the following calendar year. Your LRAP Adjusted Salary is your gross salary less adjustments for children and non-law school educational loan payments. If a graduate’s LRAP Adjusted Salary is $55,000 or less, the Law School will provide the graduate with a loan to cover 100% of the graduate’s actual payments on eligible J.D. loans. Learn more here.

Consider careers with organizations that offer loan repayment assistance

Some organizations offer their own internal loan repayment assistance to employees. One example is the Air Force Judge Advocate General’s Corps’ Student Loan Repayment Program. Under this program, eligible JAGs can apply for up to $65,000 toward student loan repayment. You can read more about the Air Force loan repayment assistance program here. The U.S. Army offers a similar program.

The Department of Justice also offers an Attorney Student Loan Repayment Program, which awards attorneys up to $6,000 per year for their student loans. You can read more about the DOJ’s program here.

The John R. Justice Student Loan Repayment Program provides assistance for lawyers working as public defenders. Eligible candidates can receive up to $10,000 per year, with a maximum award of $60,000. Each state is provided with funding for this particular program, so you’ll need to contact the appropriate state agency to learn how to apply within your specific state. Candidates must be employed as a public defender for at least three years. Read more here and check out the program FAQ.

The Herbert S. Garten Loan Repayment Assistance Program uses a lottery system to offer awards to qualified attorneys. The attorney must be employed by one of the program’s grantees and have outstanding student loan debt of at least $75,000. This program awards up to $5,600 to roughly 70 attorneys each year.

Live a frugal lifestyle and make a budget

When choosing where to build your career, consider living in an area with a low cost of living. Money goes a lot further in Wilmington, Delaware than it does in New York and you will be able to pay off your debt way faster if you aren’t throwing half the money you make toward rent.

Even if you’re working in BigLaw with a high salary, you won’t make a big dent in your loans by accident. You need to plan to pay off your loans. Don’t let your high salary tempt you to establish a fancy lifestyle. Live below your means so that you can allocate money to paying off loans. This approach will also give you the flexibility to make a career shift if you desire since you will not be dependent upon your BigLaw salary. Instead of regularly eating fancy dinners out, living in an expensive apartment, and buying new clothes regularly, if you want to pay off your loans, you need to put that extra money toward your debt. There are plenty of tips online for creating a personal budget. And there is plenty of advice for living on a budget in order to maximize savings.

Spending money with credit cards is an easy way to get into trouble. Try using cash or your debit card for all purchases. That way, if you don’t have the money, you cannot buy the item. Save up for things that require it. This way, you won’t accidentally rack up credit card debt at a high interest rate and compound your debt issues.

Plan to take advantage of ten-year Public Service Loan Forgiveness

The Public Service Loan Forgiveness Program forgives your remaining federal loans after working for a qualified employer and making 120 payments. Eligible employment includes positions in the government and nonprofit sectors. Candidates must work full-time and make consecutive payments If you plan to take advantage of PSLF, you need to be your own best advocate. Many applications for PSLF have been denied so you need to know the program inside and out and be consistently calling your loan servicer to make sure you are on track.

The first step is understanding your own student loan situation. Don’t guess what you should do or what specific terms mean. Get help from reputable advisors, like those from AccessLex. The more proactive you are with your debt situation, the better off you will be in the short-term and long-term!

 

More reading:

Managing Student Loan Debt

How to Pay Off Student Loans Fast

Manage and Repay Student Loans, usa.gov

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