Various Helpful Financial Facts Working During the School Year
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Law schools generally frown upon students working during their first year. Some schools actually forbid students to work as One-Ls. When necessity strikes, however, and you need money to survive, work becomes a practical option. Whether it's waiting tables or working as a security guard, there are many ways to pay the bills. A legal job is not a must and might be hard to attain as a first-year student. Many students actually prefer to hold a non-legal job during the school year simply to avoid having to think about law for a few hours a week.
Alternatively, you may try to apply for work-study at school. Work-study is a form of financial aid and is deducted from your annual student budget. Usually work-study positions are on campus, ranging from a professor's research assistant to a computer lab monitor. During the school year, many students like to do work-study in rather sedentary jobs where they can study while they "work," such as the computer monitor position mentioned above. While work-study positions don't pay much, they have some great advantages: They either give you the chance to research for a professor in a field you are interested in or allow you to sit on your rump and study for classes that you aren't really interested in, but are getting called on the next day, so you have to study. In addition, because work-study is usually on campus, you won't have the hassle of running to the other side of town after school for your job. Check with your financial aid office on how to apply for work-study and what the qualifications are.
LOAN FORGIVENESS: CAN YOU SPARE A MONTHLY PAYMENT?
Some schools have a loan forgiveness program. If a student chooses to work in a public interest field and earns a substantially lower income than his or her private law firm counterparts, a school with a loan forgiveness program may partially or wholly subsidize the student's loan payments. Requirements, application procedures, and programs vary widely, so check with your financial aid office about your school's loan forgiveness policies.
LOAN CONSOLIDATION: GIVE ME ONE HUGE LUMP SUM, PLEASE!
Picture this: You've taken out the max in Staffords every year for three years. That's six loans. That's a lot of debt to keep track of and monitor. Enter the federal government. It's possible to consolidate all your federal loans (including previous undergrad loans) into one big loan. The advantage to consolidation is that once your federal loans are consolidated, you only have to make one payment per month to cover all your federal loans. This consolidation may allow you to have greater control over your finances when you begin working and are struggling to make sense of the barrage of loan repayments that will begin precisely six to nine months after graduation. By consolidating, you also may be able to extend your loan repayment schedule and make lower or higher monthly interest payments (which may be good or bad). This is not Monopoly® money, so you may want to consult an expert, such as your financial aid officer, to see whether consolidation makes sense in your particular situation. Unfortunately, consolidation applies only to federal loans, not private loans, unless you have private loans from the same lender and that lender has a consolidation program for its loans.
DEBT UPON DEBT UPON DEBT: UNDERGRADUATE LOANS
Already have prior loans from college? No worries. The rumor is that some students actually decide to go to law school simply to avoid paying their undergraduate loans for a few more years. Once you are enrolled at your law school, you can usually get payments for your undergraduate loans deferred until after law school graduation. This feature also permits you to consolidate your graduate federal loans with your undergraduate loans.
As for a total cap on Stafford loans, you may not exceed $138,500. This means that your federal loans for education prior to law school may not exceed $83,000. If your loans are up to this level, odds are that you have been attending collegiate-level schools for quite some time, have more degrees than a Kelvin thermometer, and are getting a J.D. "just for lacks."
For more information, your financial aid office can direct you to the proper forms and procedure to defer your previous loans. Keep in mind, however, that you will have to pay back your student loans one day when you run out of graduate programs to attend.
DECLARING BANKRUPTCY TO GET RID OF YOUR LOANS
Dream on. They have laws against that, you know (as thousands of disappointed students discover on the first day of Bankruptcy class each year). Shame on you, naughty, naughty debtor.
GETTING YOUR MONEY
Suppose you've done everything right You turned in all your forms on time, you made copies of everything, you followed up on all of your calls, and you managed not to irritate too many financial aid people. Well, here comes the money! Because everything is routed through financial aid, scholarships and loan checks are routed from that office to student accounts. You will be called in for the ritualistic endorsement of your check, which is the closest you'll ever get to it, because immediately after endorsement, the student loan officer will snatch the check out of your hands and drop it directly into the school's bank account.
Any money you get through financial aid is usually first applied directly toward your tuition (those schools know something or another about being smart). After your entire tuition bill has been satisfied, you will receive a refund check for the surplus amount. Depending on how you chose to do your financial aid, this check will cover or supplement your living expenses for the year. Remember, though, that you might need to use some of this money next semester to cover tuition that is not automatically covered by scholarship or Stafford credits on your account (tuition is usually charged per semester, instead of in one lump sum).