Student Debt Resource

2: Minimizing Your Student Loan Debt

/ Student Debt E-book

The best way to deal with the burden of educational debt is to minimize your borrowing and not incur unnecessary debt. It is important to consider your future career plans and likely income when deciding where you want to go to school and how you will be able to pay for it. Your repayment options, the availability of educational debt relief, and what type of debt you borrow should factor into your decisions. 

Future Income and Borrowing 

It is generally a good rule of thumb to cap the amount of money borrowed for law school at what you expect to make in a year. The idea behind this rule is that it would allow you to pay off your loans in ten years while only requiring you to make payments at 10 percent of your income. This is not an exact science since one cannot truly know their future income until actually receiving a job. However, companies like Glassdoor and Monster can provide average estimates for jobs in legal fields for which you may have interest. Additionally, talking to a career services officer or to professionals who work in your desired legal position can be a good way to estimate your future salary. Practically speaking, the real purpose of the rule is so that a person wanting to work a public service job making $50,000 does not end up with $160,000 in debt.  

Determining the Real Cost of a Law School Education 

Law school tuition is the starting point in assessing what your debt load may be, and it can vary dramatically from school to school. However, tuition is not the only factor in how much school will cost. You should look at the net price of each law school; net price includes tuition, fees, room and board and is a more accurate projection of what your total costs will be. You may find that schools with higher tuition have a lower net price – making those schools more affordable.  

Law School Transparency provides an accurate depiction of what every ABA accredited law school would cost you. Additionally, consider sitting down or having a phone call with a financial aid officer at each of the law schools you are thinking of applying to; this will provide you with a better understanding of the cost of attending each institution. Ask those officers if there are any students that would be willing to speak with you as well. If you are able to speak with a student, ask questions regarding how much is spent yearly on books, the amount in rent they pay, what is an estimated monthly cost of groceries, and weekly gas costs. Any information you can receive will help you to better understand the total cost of attending a law school.   

Residency and Law School Cost 

One important consideration in determining law school cost is residency requirements. Fortunately, residency only affects tuition at state-supported schools (private schools generally have the same tuition regardless of where a student lives). If you are considering a state-supported school, learn its residency rules. You may be able to establish residency before applying or after your first year, which will impact your financial calculations. This can save you a lot of money in the long run, as state supported law schools, on average, charge non-residents $13,125 more in tuition. Currently, the only state supported law schools that do not charge nonresidents more than residents in law school tuition are Texas A & M, Penn State University – Dickinson, University of Akron, and Penn State University – University Park.  

In California, Colorado, Florida, Kentucky, Missouri, New Jersey, Utah, North Carolina, Missouri, New Jersey, Utah, Ohio, and Tennessee, a student can become a resident after living in the state for 12 months. In the remaining U.S. states, residency can be accomplished, but many maintain a practice of excluding non-residents who are full-time students from becoming a resident.  

Working While in Law School 

Working to earn extra income while attending school can be a great help and may help minimize the amount you need to borrow. Presently, the American Bar Association allows law students to work up to 20 hours a week while enrolled in 12 hours of classes or more. Take advantage of these 20 hours; use them to gain experience in a legal environment, or to learn valuable skills.  

Chances are your law school has a career site, usually via Symplicity.com or a similar platform, that posts part-time jobs. You could consider becoming a Research Assistant for a law professor, or student representative for a bar-prep company, such as Kaplan or Barbri. These companies, in exchange for student outreach, often provide a semester stipend in addition to discounted or free access to their bar-prep courses.  

Free Application for Federal Student Aid 

You should explore the availability of financial aid at any law school to which you apply, and never assume you won’t qualify. To minimize your debt load, exhaust all financial aid options before turning to loans. 

The first step you must take is to fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA is required to secure access to federal student aid (this includes federal grants in addition to federal loans). Many states and institutions also use information from the FAFSA to determine eligibility for their different grant and loan programs. If you don’t fill out the FAFSA, you will lose the opportunity to receive this assistance. 

Don’t make the mistake of thinking the FAFSA is not worth your time. Many students qualify for some form of aid. Even if you are not eligible for a grant or scholarship, you cannot borrow federal loans without filling out the FAFSA.

How to fill out the FAFSA?   

(1) Know the deadlines: Each year, beginning October 1, a new FAFSA is available at www.fafsa.ed.gov. The federal deadline for submission of the application is generally the end of June, but some states and institutions have earlier dates, so make sure you file by any applicable deadlines. You can find individual state deadlines here. For individual law school deadlines, contact the school’s financial aid office. 

Note: For those who have filled out a FAFSA previously, you may be used to the FAFSA opening January 1. However, starting with the 2016-2017 FAFSA, the application opens on October 1. Please make note of this earlier deadline, as many schools and state grant programs have moved up their deadlines as a result of the FAFSA application opening date change. 

(2) Access the application by going to fafsa.ed.gov.

(3) Provide either your name and FSA ID, or your full name, social security number, and date of birth.

Note: If you do not have an FSA ID, you can acquire one at https://fsaid.ed.gov/. The FSA ID took the place of the FAFSA pin code in 2015. 

(4) Click the year applicable to the school year you are requesting funds. For students borrowing for fall of 2022, the application year would be 2022-2023.

(5) Upon selecting the appropriate application year, you will be brought to an introduction page with a series of links that provide you additional information about the FAFSA. Click next.

(6) You will then access the “Student Demographic” page. This page will require you to provide basic information about yourself including name, address, state of residency, email address, and phone number. Once this information is filled out, click next.

(7) You will then come to the “Student Eligibility” page. This page will require you to provide information about your citizenship, high school graduation year, the type of educational program you will be entering, whether you want to be considered for work-study, whether you were ever in foster care, how much education was completed by your parents, and whether you have prior criminal convictions that could stand in the way of you receiving federal financial aid. Click next.

Note: Being convicted of selling or possessing drugs is a potential bar to receiving federal financial aid. More information on how drug crimes affect your ability to receive federal financial aid can be found in the FAQs section

(8) You will then be asked to provide information about your high school. Provide this information and click next.

(9) You will now be asked to add up to 10 law schools where you would like your application results to be sent. It is recommended that you send this information to every law school you have sent an application. Additional schools can be added later. Choose your law schools and then click next.

(10) You will then be asked to list your housing plans for each of the law schools selected. You can choose between on-campus, off-campus, or with parent. Select the applicable choice and click next.

(11) You will be asked about your dependency status, and will have to answer questions about your children, and whether anyone still claims you as a dependent on their taxes. Once you answer these questions, you will be classified as either independent or dependent. If you are considered dependent, you will be required to answer questions about your parents or legal guardians. If you are considered independent, you will be able to skip the parent/legal guardian information. In either case, click next.

(12) Next, you will be asked to provide information from your most recent tax return. This information can be auto-filled by clicking the “Link to IRS” button at the bottom of the page. You will be asked to provide your FSA ID and password. Then, you will be transferred to the IRS website, asked security questions, and will then be given an option to transfer your most recent tax information back to the FAFSA.

Note: You will not be using your prior year tax return but the tax return from two years prior. 

(13) Upon returning to the FAFSA website, double check the transferred information, and fill in any missing information. Click next.

(14) You will then be able to electronically sign your FAFSA. Upon doing that, click “submit my FAFSA now.”

(15) You will then be taken to a confirmation page. This page will also be sent to the email address that you provided in the application. At the bottom of the page, you will be provided with an “Estimated Expected Family Contribution (EFC).” This number is a rough estimate of how much the federal government estimates you can provide out-of-pocket toward your law school education.

(16) You’re done! Lean back and relax. Law schools generally receive the results of your FAFSA information within 10-14 business days. Within 3-5 business days you will receive an email stating that your FAFSA has been processed. This email will contain a link where you may access your Student Aid Report (SAR), which is the official information used by law schools to calculate your financial aid package.

Notes: 

  • Many grants – which is aid that does not need to be repaid – are limited and may be distributed early in the year, therefore you should submit your FAFSA as soon as possible.  
  • The FAFSA must be submitted every year that you seek to receive federal financial aid.  
  • This process may seem complicated when laid out in multiple steps, however the entire process (minus waiting for the actual application results to return) takes only about 15-20 minutes to complete. There are currently discussions among members of Congress on how to simplify this process for the future using four easy steps. However, for the current financial year, the steps outlined above are required. 
  • The Department of Education has a FAFSA guide that provides guidance for each individual FAFSA question. You can access the guide here 

Scholarships and Grants 

As noted above, the FAFSA is a great first step for  finding scholarships and grants. However, the application will only determine whether you are eligible for funding from the federal government. It is also a good idea to research private sources of funding to determine what additional funds may be available.  

A good place to start is the financial aid offices of the law schools to which you are applying. If you decide to call schools to discuss law school costs, (as recommended above), this would be a good time to inquire about scholarship opportunities as well. Make sure to get information about the requirements for  academic performance, diversity, or financial need, as well as any and all deadlines. Write this information down and  keep a separate list for each school.  

In evaluating any law school’s scholarship program, consider the following: 

  • The total amount of financial aid available; 
  • How competitive you will be for the number of slots available; 
  • Any obligations you will have in exchange for the funds. 

Outside of scholarships offered by law schools, many independent, private scholarships exist with organizations like Discover Law, the American Bar Association, Scholarships.com, FastWeb, MALDEF, and Sallie Mae – each which offer their own scholarships programs and provide information about existing scholarships.  

Additionally, the U.S. Department of Labor manages a scholarship database called Career One Stop. This program maintains listings for more than 700 different law school scholarships at any one time.  

Federal Work-Study 

Federal Work-Study allows you to acquire a part-time job while in law school, provided that your FAFSA results determine you to be eligible. You will either work directly for your law school or outside the university, doing something in the public interest. Public interest work is “work performed for the welfare of the nation or community, rather than…for a particular interest or group.” This means that you cannot work in a position that results in displacing existing employees, involved in religious worship or sectarian instruction, or involving politics. However, you can be employed with a state legislature if the work performed is of a non-partisan fashion.  

The law school will pay you at least once a month and you must earn at least minimum wage. However, you can also permit the school to allocate your work study compensation to pay expenses relating to attending law school, such as books or fees. Currently, work study recipients receive between $1,500 and $1,800 per semester.  

Consider Relief That Can Help with Repayment 

If you must borrow student loans, there are programs that can provide significant relief to ease the burden of repaying these loans. These include income-driven repayment plans and forgiveness for federal loans, as well as loan repayment assistance programs that help provide funds to make payments on your loans. Read Chapters 3, 4, and 5 to learn more. Also, review the differences between private and federal loans in Chapter 1: Understanding Your Student Loans to make sure you are borrowing eligible loans. To learn what you should look for in these programs and how they can significantly reduce your educational debt burden, register for a free informational webinar hosted by Equal Justice Works. 

Additional Resources