preLaw Magazine - Spring 2008 - (Page 20)

Salvation tudent debt is growing at an alarming pace. Excess borrowing, lifestyle choices and high consumer debt can compound the problem. The first step, many experts say, is to become a wise borrower. Mapping out your expenses, fact checking and applying on time are vital to getting as much money as possible. Federal loans, particularly the Stafford Loan, are usually the first resort for borrowers. Most federal loans are need-based, but some higher-interest loans are available regardless of financial circumstances. Jeffrey E. Hanson, director of Borrower Education Services for the Access Group Inc., said it’s important for students to become knowledgeable of the terms and conditions of their loans before signing on the dotted line. “Student’s don’t necessarily think longterm,” he said. “They should be as knowledgeable of their finances as they are about the law.” The amount of loan money available and the method by which it is disbursed vary greatly from one school to another. Private schools, especially those that are older and more established, tend to have larger endowments and can offer more assistance, according to The Princeton Review. The average law student graduates with a heavy debt load: $83,181 from private law schools and $54,509 at public institutions. That translates into monthly payments around $1,000 and $650, respectively. All 20 preLaw DEBT S that debt can eat away at the standard of living for recent graduates — especially those who want to work in lower-paying public service jobs. But school-based loan repayment programs and a new federal law can significantly reduce a graduate’s debt load. Other federal loans including the Stafford and Perkins loans offer assistance to law students. See the chart on page 22 for more information on the eligibility, repayment plans and interest rates for federal loans. “While there are a number of resources available to assist pre-law students in learning about law school financial aid, your law school admission/financial aid office is usually the best place to start,” said James Homer, national law segment manager at Citibank Student Loan Corporation. When deciding upon a student loan provider, Homer suggests looking at all of the services the lender can provide. Borrower benefits are important, but so is customer service, loan servicing, longevity in the industry and the ability to offer a full law student loan product line. This includes Stafford, GradPLUS, Private and Bar Study Loans. “You should look at your legal education as an investment in your future but only borrow what you truly need and look for even small ways to cut expenses,” Homer said. “Be informed and choose wisely.” More than 115 law schools now offer loan repayment programs for students who serve in public interest or non-profit posi- tions, according to Equal Justice Works. That is up from just 47 in 2000. Some of the programs defray costs and some fully cover the education debt payments of their graduates. And now the College Cost Reduction and Access Act of 2007 will supplement these programs to further help graduates in public service erase their debt. Living on a $35,000 income after law school wasn’t ideal for Sarah Coffey Bowes. But the 2004 University of Maryland School of Law graduate did it because it allowed her to pursue her passion in public interest law — a job with the Homeless Persons Representation Project. Bowes also got help from her law school. And even though she was unable to start saving for retirement, she was in better shape financially than many recent graduates. “I can’t say enough what a relief it is to get a check and know that my student loans are covered for that year,” said Bowes, who’s carrying $83,000 in student loan debt. Bowes, who receives loan forgiveness from the University of Maryland, only has to pay approximately 50 percent of her $1,030 monthly debt. And the College Cost Reduction and Access Act could reduce her payments even more.

Table of Contents Feed for the Digital Edition of preLaw Magazine - Spring 2008

preLaw Magazine - Spring 2008 Contents From the Editor For the Record Large Gender Gap Remains Among Political Hopefuls Man Charged in LSAT Scam Barry Dean Recognized New Report Examines Legal Ed Drexel Receives Accredidation New Mexico No. 1 for Hispanics A Film Journey in Law A Law Student at Last Debt Salvation Great Law Schools for Minorities Grad Opts Out of Big Firm Job Specialties Helpful Advice

preLaw Magazine - Spring 2008

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