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Financing Your Legal Education Attending law school is extremely expensive. Tuition at a private law school, plus living expenses and books, can run well over $60,000 per year. Only the wealthiest students can afford to pay this amount as they go through three years of law school. Most law students have to borrow substantial amounts to finance their law school education. According to admissions data, the average debt for graduating law students is approaching $75,000; for some students it is well over $100,000. These figures do not include debts from undergraduate schools. Based on the normal repayment period of 10 years, and current interest rates, the monthly debt service on such loans starts at about $900. Law school tuition at a public university in the state where you reside will be substantially less than at a private school. Although there is no public law school in Massachusetts, the law schools at the University of Connecticut and the University of Maine offer reduced rates for residents of all the New England states. If cost is an important criterion for you, consider a law school at a public university. It may be worth thousands of dollars to wait a year in order to establish residency.
Is law school a good investment? Given the long term financial ramifications, it is imperative that you ask yourself this question. There is no universal answer -- only you can decide whether, given a number of factors, law school represents a good investment for you. Among the factors to consider are the following: why do you want to go to law school? Are you certain that you want to practice law or if not, that you need a law degree to do what you want to do? Do you feel you have a good idea of what lawyers do? Do you have a realistic idea of how much lawyers earn (1) in the field in which you want to practice, (2) in the geographic area in which you want to live, and (3) with a degree from the law school you are likely to attend? Are you willing to work upwards of 60-80 hours a week during your first few years of practice in order to pay off your loans? One of the leading causes of dissatisfaction among practicing lawyers is the feeling that they are "stuck" in their jobs due to their enormous debt. Absent other professional training or experience, law school does not adequately prepare you for other types of well-paying jobs. If you find that you do not like the practice of law once you have completed law school, you will still need to pay back your loans, and being a lawyer will probably be your best-paying option. (And, in case you were beginning to contemplate other ways out of the debt, you should know that educational loans are generally NOT dischargeable in bankruptcy.) If you are like most students considering law school, this is the
first major financial decision -- with consequences lasting a decade
or more -- that you will make. Do not jump into law school lightly,
or on a whim, or because your parents want you to do it, or because
"there's nothing better to do." You alone (as well as your future
spouse and children) will bear the burden of your decision. Especially
since taking time off before law school will not harm your chances of getting admitted, you should be very
certain that law school is the right investment for you. The nuts and bolts of law school
financial aid Each law school calculates its annual "cost of attendance," or COA (sometimes referred to as the "student budget"). This figure includes tuition, fees, books, rent, food and health insurance. It does not include credit card debt or car payments. You will be eligible to borrow up to the amount designated as the COA. In calculating the COA and the amount you are eligible to borrow, law schools assume that you will not work while you are in school. (See below for a discussion of working during law school.) When you accept an offer from a specific law school, you will work closely with its financial aid office to plan the financing of your education. They will guide you through the various programs and their requirements. Law school financial aid offices serve a much smaller population and tend to be more “user friendly” than what you may be used to at UMass. Never hesitate to contact them with your questions and concerns. The following information is intended only as guide to help you and your family start thinking about how you will finance your law school education. Terms and rates change frequently, so applicants are advised to obtain up to date information from the law school financial aid offices, LSAC, and individual lenders. Need-based loans from the federal government There are four types of loans available from the federal government based on financial need: Subsidized federal Stafford loans. If you demonstrate financial need, currently you can borrow up to $8,500 per year. The government pays the interest while you are in school. Unsubsidized federal Stafford loans. In combination with the subsidized loans, students can borrow up to a total of $20,500 annually. With this program, though, you pay the interest while you are in school or let it accrue. Perkins federal loans. These loans are available to students at certain schools only, and are limited to $6,000 annually. The government pays the interest while you are in school. Graduate PLUS loans for students. These loans are only available to students with no bad credit (generally defined as no current delinquencies of 90 or more days, and no major adverse credit events in the past 5 years, such as bankruptcy and repossessions). There are no annual or aggregate limits for these loans. Private lenders While most students are able to cover their law school costs with the above government lending programs, some students need to turn to private lenders for additional support. As of August 2009, it is still unclear what the longterm impact of the recession will be on these loans. Accordingly, it is impossible to predict what private credit will remain available to students in the future, or at what rates. The following is therefore very general, and should be supplemented with independent research. Certain private lenders specialize in loans to law students. They include Law Access, Law-Loans, and The Education Resource Institute. Commercial lenders have different restrictions on the interest rates they can charge, usually allowing them higher limit on rates than for government-backed loans. These loans are dependent on the applicant’s own credit history. Under federal law, you are entitled to one free copy of your credit report from each of the three major credit reporting agencies, Experian, TransUnion and Equifax. You should review your credit report before applying for loans so that you can address any problems in advance. If you have had any problems with your credit in the past, try to clear them up as soon as possible and strive to have as clear a record as you can for as long as possible. Scholarships and grants are a key method law schools use to compete with each other for top students. Law schools offer scholarships and grants to students based on defined criteria such as academic achievement, race, ethnicity, gender, or residency. As a general rule, law schools use their limited scholarship funds to attract students they don't have enough of -- e.g., high LSAT scorers at some schools, people of color at other schools, etc. Merit awards are very competitive. The financial aid office at the school you plan to attend can help you identify sources of funding. If you are considering a career in public interest law, you should also look into whether the schools you are applying to have a Loan Repayment Assistance Plan/Program (LRAP). These programs help lawyers make payments on their qualifying loans if they are working in the public sector (e.g., legal services or legal aid, some government work, other law-related non-profits). In addition, under two new federal programs, certain lawyers working in the public interest or government may be eligible for loan repayment assistance, loan consolidation, and/or loan forgiveness. Additional, regularly updated information is available from Equal Justice Works. During your first year of law school, you can expect to log 12-15 hours per week in the classroom. The most often-cited benchmark for outside study time is 2-3 hours of study for every hour of class time. Please note that that figure is an average -- some students will study more and some lucky (or brave) few will study less. That means straight schoolwork will take up, on average, 45-60 hours of your week. Now compare that time to what you are doing currently, either combining school and work as an undergraduate, or working full-time as a graduate. If it seems like a lot to you, then you probably will not want to work your first year of law school. If it seems like very little, then you may want to explore employment options. Consider the following as your think about whether working during law school is a realistic part of your financial planning:
Don't forget your summers. Most students try to obtain paid legal employment during the summer. How easy that is depends in large part on where you go to law school, and what the local market for law student associates is. This can be a highly remunerative source of employment if you are in a big law firm in a medium or large city. Summer legal employment may be much less financially rewarding (but beneficial in other ways) if you work in a public interest firm or for a small law firm. Summer employment is not just a way to make ends meet and potentially diminish the next year's tuition bill. It is also an investment in your future career in terms of professional networking and the exposure to actual law practice. Make sure you talk to your law school's career services center about summer employment during your first semester at school.
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Is law school a good investment?
Do not jump into law school without first considering the financial impact of your decision. Law school is a VERY costly endeavor, and for most students you will not reap a financial return on your investment for many years. |
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