May 2005

Paying for Law School: Debt Matters

As Melissa Hursey worked her way through her undergraduate degree and then through law school, she kept hearing that educational debt was "good debt."  Everyone understood that school loans would pay off in higher future earnings. She wouldn't need to worry about her student loans because people would understand if a new graduate was a little late with payments or took educational loan obligations less seriously than others.

Not so, Hursey learned, once she graduated and the payment deadlines began to arrive. She saw how the debt came into play when she applied for credit cards and other loans. Timely payments and the amount of debt she was carrying truly mattered.

"Really, when it comes down to it, debt is debt," she explained.

Prospective Students Should Size Up Debt

With tuition costs constantly rising and the economy still not running on all cylinders, students are accumulating more debt than ever. According to financial aid administrators, it is more and more common for law students to graduate owing a quarter of a million dollars in personal debt.

"People don't always make good decisions," said Heike Spahn, a law school consultant with AdmissionsConsultants and former assistant dean at the University of Chicago Law School.

Spahn explained that while many law students diligently research a law school and what it may offer their careers, they fail to give enough thought to the sobering question of whether they can truly afford certain programs.

"It's like a kid in a candy store," Spahn said. Just because the prospective student likes everything he or she sees on the shelf doesn't mean it is all within reach. Once they graduate, they are going to be paying for school for many years. Prospective students may not grasp the weight of that responsibility.

The burden of student loan repayments, Spahn said, can be "like having a second house, with no house to live in."

Be Realistic

Spahn suggested that individuals start by taking a long, hard look at how well their school choices fit their career goals. The top ranked law school in the country may not be a wise choice for someone who wants to be a public defender, as they will probably never make enough salary to pay off the necessary student loans. A less expensive school might be a better choice.

Spahn cited the case of a student she once  worked with who was accepted to both Yale and Valparaiso law schools. The student knew she wanted to return home to Indiana, in the Valparaiso area, to practice law once she graduated. She therefore decided it was a better financial decision to go to with the less prestigious, and more importantly, less expensive school.

"Take a look at reality," Spahn said. "The big picture. Ask, 'what am I going to do with my life?'" It's important that school debt does not wind up interfering with your goals.

Michael Machen, director of financial aid at the University of Chicago, agreed.

"Be realistic," he said.

Read the Small Print

Machen explained that students need to take a close look at their careers post graduation and ask themselves these questions: is the school you want to attend going to allow you to do the work you want to do? Is that work going to allow you to pay off your student loans?

Yet, Machen concedes, even the best informed students often choose their dream school over a more practical choice. So the question of how to pay for it arises.

"We counsel students to create a budget and live as leanly as possible," Machen explained.

The University of Chicago Law School, like other schools across the nation, offers debt and financial aid counseling that goes well beyond help with filling out forms. The school offers financial planners, debt counseling, repayment information, and general support.

Machen offers some simple advice that students can act on before they ever set foot in their first class.

"Read what you are sent," he said, explaining that some of the most common money problems could be avoided if prospective students read their financial aid packages carefully. "I know there is a sense of information overload, but it's relatively straightforward."

Once you are engaged in the financial aid cycle, both Spahn and Machen agree on one basic point.

"Be polite," Machen said. "Word does get around."

In dealing with financial aid officers, prospective students need to remember that they are only one of thousands of applicants that school employees deal with every term. Flaring tempers and angry words will only come back to hurt you.

"They feel entitled to the money," Spahn said of people who cause commotions in financial aid offices or over the phone. "That doesn't get you anywhere."

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