Financial Planning

Planning for Law School

1. Eliminate any Credit Card Debt
   Pay off your credit card debt prior to entering law school. It will be extremely difficult for many students to pay outstanding credit card balances while in law school. Credit card debt is probably the worst type of debt that one can have. Further, since it cannot be included in our Student Cost of Attendance Budget, pay it off before you enroll.
2. Maintain Good Credit
   Clean up any credit problems NOW. Review your credit report. Employers, especially financial employers, are beginning to review credit reports of applicants. Bar examiners are beginning to look at repayment of student loan debt as an ethical/disciplinary issue. And, if you have poor credit, you may be unable to borrow for your legal education.
3. Borrow Prudently
   While students with good credit may borrow up to the Cost of Attendance, many students are able to supplement their borrowing with savings or income earned from work. Remember, even with fairly attractive interest rates, you will pay back a minimum of 150% of what you borrow in law school on a ten-year repayment term and up to three times what you borrow if you take 30 years to repay. So don’t just borrow all that you can borrow. Really think about your needs and how you might reduce the amount you will need for the three or four years you are here.
4. Develop a Budget
   Student Costs of Attendance are just that, STUDENT costs. While our budgets are set so that you do not have to eat Ramen Noodles and Mac and Cheese daily, they are set to a different lifestyle than that of a New Yorker earning $60,000 a year. To develop a budget, you may simply construct a monthly worksheet showing income and expenses and adjust when expenses exceed income, or you may want to look at the budgeting software at www.mapping-your-future.org/features/budgetcalc.htm and www.finaid.org/calculators. The Financial Aid Notebook provided by the Financial Aid Office to incoming students at Orientation should also help. Develop your budget and then borrow only what you really need. Remember, if you live like a lawyer now, you may have to live like a student later!
5. Review all of your resources and familiarize yourself with other available resources Savings, earnings potential, and parental (and other) offers of help should at least be reviewed before committing to borrowing. Students have been known to borrow against parental home equity which is usually cheaper and has the added advantage of being tax deductible. Some have moved back home or in with other relatives during law school in order to save money.
6. For those of you who will be borrowing for living expenses while in law school, don't forget that financial aid is not disbursed until three days before the start of classes.  Have enough cash on hand to pay for textbooks and your September rent.

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