It’s no secret that most students, especially law students, accrue substantial debt during the course of their education, especially those who attend private universities. In fact, the American Bar Association found that the average law student at a private institution borrowed upwards of $91,000 in 2008.
With that in mind, here are a few tips to help you make prudent choices while you are in school so that you will not have to live like a student after you graduate:
- Read the fine print for all applications before you sign, including those for student loans and credit cards.
- Familiarize yourself with all paperwork your parents may have completed on your behalf.
- Know the facts about your financial aid, including the type of aid, the lender, what fees you may be responsible for, and when repayment is required.
- Borrow only what you need.
- Establish a spending plan and stick to it. First determine which expenses are fixed and which are flexible as well as what expenses are one-offs (one-time, once-a-year, once-a-semester, etc.). Then, consider what resources are or will be available to you. With this in mind, track your expenses and establish how much discretionary income you have.
- Limit your expenses by getting a roommate, comparison shopping, buying used books, packing your lunch, and using your credit card sparingly, if at all.
- Protect your credit. You should familiarize yourself with your credit report, pay your bills on time, and limit the number of credit card accounts.
Student loans can be confusing. Here are a couple of common terms you should know:
- Lender: The company or organization that funds the loan, which is now handled exclusively by the Department of Education through the Direct Loan Program.
- Servicer: The company or organization that collects loan payments on behalf of the Department of Education.
For more information, check out these useful links: