I’m back from the ABA Annual Meeting, and I would like to share a few great questions I received that I think can be beneficial to many of you out there, along with some additional advice and resources.
“I’m a current student, but I want to get a handle on my debt now. What should I do?”
First, make an appointment with your financial aid office. Ask about any scholarship or grant opportunities for continuing students—and apply. Also take a good look at your budget. Do you need to borrow the full amount of the loan? Can you make some other adjustments to your budget to cut your expenses?
Regardless, get a handle on what you owe already by going to the National Student Loan Data System (NSLDS) where you’ll see any federal loans you’ve borrowed to date—at either the undergraduate or graduate/law level. Then, go to the AccessLex Student Loan Calculator, where you can plug in that information—along with any additional borrowing you think you might need for the remainder of your law school time—and you’ll be able to see what your monthly loan repayment obligation will be under different repayment plans (including income-driven plans).
After all, understanding what lies ahead can alleviate some of the stress associated with the unknown.
“I’m likely headed to a public service job and I’ve heard about PSLF, but I also heard not a lot of people qualify. What do I need to do?”
There are four factors you need to consider. First, you must have the right loans, which are Direct loans. Second, you need to make payments in a qualifying payment plan, including the standard repayment plan or any income-driven repayment plans. Third, you need to work full-time (or full-time equivalent) at a qualifying employer—any federal, state, local or tribal government agency, a 501(c)3 non-profit organization or handful of other non-profits doing public-service work. And fourth, you need to make 120 on-time qualifying payments—which is 120 distinct monthly payments (although they do not need to be consecutive).
“How do I know if refinancing is right for me?”
Refinancing into the private loan market can be a smart move—if you’re someone who has a solid job, is committed to that job path, has decent credit and wants to repay debt as quickly and inexpensively as possible. Refinancing into the private market can give you access to a potentially lower interest rate than the federal student loan program, often without any refinancing fees (and sometimes with a sign-up bonus via your affiliation with specific employers or membership groups such as the ABA).
If you’re headed toward public service, are worried about your monthly payments under the 10-year standard repayment plan and/or don’t have stellar credit, staying with the federal student loan program will provide you with a little insurance—including a number of income-driven repayment plans, the Public Service Loan Forgiveness Program, and ultimate forgiveness after 20 or 25 years of payments (in or out of the public service and/or government sectors).
“This is a lot to take in, and I have a lot of classmates who could use this information but couldn’t be here. How do I help them?”
AccessLex offers a free personal finance program just for law students and recent law school graduates called MAX by AccessLex®. You can quickly register online. You’ll then have access to online lessons, workshops and webinars, tools and resources and even free one-on-one financial coaching with our Accredited Financial Counselors (AFC®) and other financial experts. There is even a scholarship incentive program! Look for us on campus as well, where we often have workshops and onsite one-on-one financial coaching sessions available.
We also offer a free webinar on The Road to Zero: A Strategic Approach to Student Loan Repayment as well as a free Road to Zero booklet.
And I could go on and on. But, if you have further questions, please take advantage of the many resources offered by AccessLex Institute. As we discussed in San Francisco, starting with knowledge and moving to the personal strategy best for you—and your financial goals—is an important step in reaching your personal, professional and financial goals.
If you would like even more information or to schedule a workshop for your campus, please contact us at EducationServices@accesslex.org.