Law.com today has an article from Texas Lawyer with 7 tips on how to confront your law school debt. It's pretty dry stuff, like make a budget, and pay your bills. There's not really anything creative to do about law school debt though, but we wanted to take a closer look at two of the tips:
4. Pay more than the minimum.
Law grads should pay extra every month and avoid years of compounding interest, which can save a lot of money in the end. Students still in law school should consider making interest payments now to reduce overall loan amounts.
We know it sucks to take the small amount you're earning now at the beginning of your career and give an even bigger chunk to Sallie Mae. But, interest is what it is. Paying more now decreases the total amount you will have to pay over time.
Even better than this advice though would be to keep interest in mind while in law school. If like most students these days, you took out loans to cover your living expenses, think of your discretionary spending in terms of the total it will cost you. $5 for a pint of tasty, tasty ice cream might not seem too bad. After all, you need a little comfort in your life. But, with interest that ice cream is going to cost you $10 or more. Now that's some expensive ice cream. Still worth it?
Remember, nothing tastes as good as being out of debt feels.
7. Don't go back.
Finally, some law school grads who have not yet found jobs may be considering going back to school. They shouldn't. Going back to school amounts to more loans and accruing interest. It is best to face the task of paying off the loans because, in most instances, student loans can't be discharged in bankruptcy, and creditors could garnish wages or attach property.
A law grad should not jump back over the first hurdle but rather should face that second hurdle with these tips in hand.
We disagree. The deciding factor for whether or not you go back to school should not be debt. It should be what you want to spend the rest of your life doing. If you realize law isn't for you, then don't let your law school debt hold you back from having a life you can stand to live. As Dr. Rob pointed out his piece on Professional Identity, it's easy to buy into the sunk cost fallacy and think that because you have a law degree you have to be a lawyer. Nope, you don't even have to use your degree. You may never get another shot at a second chance, so go for it while you're young.
Plus, most grad school programs are free. Not only free, but they pay you to go. You can typically get tuition waived by working as a graduate teaching assistant or getting a research job. Professional degrees like law, business, and medicine, have to be paid for out of your pocket. But, if you have decent grades, an academic advanced degree will pay for itself, and then some. You'll accumulate more debt due to interest on your loans, but at least you can defer payment for a few years, and you won't get more debt on your subsidized federal loans (so with inflation, you actually decrease this debt by a little).