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Student Loans: Borrowing Decisions (Part I)


To date, how much interest have your student loans accumulated? Additionally, how much interest do you anticipate that your student loans will accumulate before you are able to pay the balance (principal and interest) in full? I urge every current and prospective borrower to take a moment to make this inquiry. Perhaps the answer to these two simple questions will prompt a change in your borrowing and spending habits.

Every three months, one of my student loan servicers informs me via email of the dollar amount of “accruing interest” on my student loans. With each of these emails, I find myself both infuriated and inspired. I am infuriated because the amount of interest accumulated over the past four years is nearly enough to pay the annual cost of tuition and mandatory fees at my in-state law school. I also find myself upset when I think about the lack of pre-borrowing information I was given. However, I am inspired to do everything within my control to eliminate this debt as quickly as possible.

I recently reached out to a few of my friends and colleagues, some of whom graduated over ten years ago and are still paying student loan debt. My question to each individual was simply this: “looking back on your borrowing experience and lessons learned, what one piece of advice would you offer to a pre-law or law school student regarding minimizing student loan debt?”  Based on my conversation with over twenty law school graduates, I have compiled a list of the information they shared. It is my hope that this article will prompt a closer examination of your student loan borrowing options and a change in your spending habits during and after law school.

1. Avoid Student Loans

Without hesitation, the number one response from my friends and colleagues is to steer clear from student loan entanglement if doing so is possible.

2. Act Your Wage

During orientation week of law school, I am sure you heard some variation of the phrase “live like a law student while in law school unless you will be living like a law student when you become a lawyer.” If you take nothing else away from this particular article, I urge you to continually keep that quote in mind. Immediately learn how to budget, but more importantly, stick to your budget. As a student, you do not need a new suit for every networking event and you certainly do not need a new dress for every gala or reception that you attend. You do not need a fancy apartment or the latest technology. No one expects that of you! If your primary source of “income” is student loans, then you need to learn how to act your wage and live within your means. Debt (student loans and credit card) is not income!

“I would have budgeted better. I went to law school after working for a while so I was accustomed to a certain standard of living. I would have lived more within my [limited] means and not relied on my student loans as much.” ~ Laura

3. Be a Bar Review Course Student Representative

As a first or second year law student, I highly doubt that you are concerned with taking or passing the bar exam at this point in your legal education career. Nevertheless, there are certain financial digits that I would like for you to keep in mind as you progress in your studies. First, the average cost of a bar review course is approximately $3,000. Second, applying to sit for a state bar exam will cost you between $500 and $1,000. Third, if it is your aim to waive into the District of Columbia Bar, you should expect to pay $750+ for your waiver application. None of the above financial figures account for your living expenses during the two or three months of bar review — a period where most law school graduates refrain from working. These figures also do not include the cost of your post-license fees (i.e., annual dues, mandatory ethics courses, licensing fees, occupation taxes, continuing education courses, etc).

Practicing law is an expensive profession regardless of the state in which you choose to practice. Without the guarantee that an employer will pay for your bar review course, why not consider saving $3,000 by becoming a student representative for a bar review program. These opportunities are limited and decisions are usually made during the first year of law school. Regardless of your year in law school, it does not hurt to inquire about the availability of this opportunity.

In the event that you are not selected as a bar review course student representative, consider applying for a bar review scholarship which can save you a percentage on the review course. Any discount is better than no discount at all.

4. If You Don’t Need the Loan, Give It Back

Do not be afraid to say “no” to lenders. Regardless of the amount of credit (“debt”) extended to you, borrow only what you need. Before borrowing, examine your tuition bill, as well as your individually prepared cost-of-attendance budget. After this examination, borrow only what you will need, and no more than that. If you borrowed money in excess of what you need, give back the surplus amount as quickly as possible. Why store borrowed money in a savings or checking account earning less than 1% interest while the debt accumulates 8% interest each month? If you do not need it, give the loan money back without hesitation!


Many people overlook scholarships because of the amount of effort they perceive it would take to compile and submit an application. Looking back at my borrowing habits, I would rather take five hours to compile and submit a scholarship application than to borrow that amount from a lender and pay 6-8% interest on it.

“See if the school offers money based on first semester or first year grades. Look for private and diversity scholarships. Don’t forget about undergrad grades and LSAT scores that can help get scholarships.” ~ Brittany

“Ask your school of interest about scholarships they offer, since they don’t advertise all or any of them.” ~ Cherekana

Sadly, I did not apply to many scholarships until my final year of law school. During 3L, I was privileged to be the recipient of over $25,000 in scholarship funds from eight different sources. I did not receive more than $5,000 from any one source and some scholarships were as low as $500. My goal back then was simply to reduce the amount of loans I had to borrow, so I applied for almost every scholarship that came across my desk for which I met the qualifications. With the money received, I repaid student loan debt and paid for my bar review course and living expenses while studying for the bar exam.

6. Cut Expenses and Solicit Assistance

When creating your budget each semester, find creative ways to cut expenses. This may mean opting for public transportation as opposed to driving and paying for gas, parking, and car maintenance. Perhaps you may need to find a roommate to assist with living expenses. You may also need to look to family and friends for assistance. Do you have a family member or friend living nearby with whom you can peacefully live for free or for a reduced rent amount? Do you have a family member or friend who would not mind paying your cell phone bill or perhaps your car insurance? If so, have you asked these individuals? Keep in mind that any saving is better than no savings!

7. Do Not Accumulate Unnecessary Debt

Although this article has dealt primarily with student loan debt, I find it imperative to give attention to other forms of debt that many students elect to accumulate. I understand that my stance may sound harsh, but I am unapologetic when I say that law school students relying on student loans do not need a new car purchased on an auto loan, nor should such a student rely on a credit card as a source of income. Credit cards are to be used for emergencies (i.e.: laptop purchase or repair) and not for Victoria’s Secret and Best Buy leisure purchases. I urge us all, student loan borrowers, to stop this foolishness — stop accumulating unnecessary debt!

8. If You Are Borrowing, Know and Understand the Terms

Many student loan borrowers elect blissful ignorance over informed consent when signing legal documents that will affect their life for years to come. Many students are guilty of borrowing student loans and not understanding the content of their master promissory note or borrower terms and conditions. Borrowers hear terms such as deferment, forbearance, consolidation, and income-based or income-contingent loan repayment but neglect to research and understand the nuances of each of these borrowing solutions. I implore every current and prospective borrower to research, question, know and understand the terms and conditions of each of your current and anticipated debt. Do not be misled and/or misinformed due to lender-creditor rhetoric.

Debt is debt! Unlike other forms of debt, student loans must be repaid and are difficult to get cancelled or discharged, even in bankruptcy proceedings. Knowing this, I caution all borrowers to borrow wisely. After much worrying and many sleepless nights, I decided to adopt several budgeting and cost-saving strategies that have in turn allowed me to begin repayment of my federal student loans, eliminate consumer debts, and pay off a private loan borrowed during my undergraduate education. While I realize that my mortgage-size law school student loan debt will not be wiped away immediately, I do oftentimes find myself regretting not having borrowed, budgeted, and spent wisely while in law school. It is my hope that this article will cause current and prospective student loan borrowers to reassess their borrowing decisions and spending habits.

[Note: In Part II of this article, we will delve into a cursory overview of student loan repayment.]

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