Navigating the Law School Loan Mountain of Debt
Michalis 'BIG Mike' Kotzakolios

Student loans for an undergraduate student are costly by themselves. Add to them the costs of going to law school, and the debt becomes astronomical. A law school loan can amount to six figures, rivaling some home mortgages. Law school tuition continues to climb in the United States. In the 1992-93 school year, a law school graduate was burdened with an average of over $37,000 in debt. By the new millennium, it rose to over $77,000. Such law school loan debt is keeping more and more new attorneys away from public sector and government positions in favor of higher-paying private practice jobs.

While law school loan debt of such magnitude can be fear-inducing, it needn’t be debilitating. Law school loans can be managed. Going into debt for the sake of education is almost always a wise investment. As long as the debt isn’t mismanaged to the point of default and late payments, debt such as law school loans make a good risk. In fact, an executive for one of the nation’s largest student loan providers says that the more one owes in student loans, the likelihood of default is less because a higher law school loan burden implies a higher education level, which leads to more income.

To successfully manage the debt load of student loans, you must first know what kind of student loans you have. For example, student loans can either be a government-guaranteed loan or it can be a private loan. A private loan usually has a higher interest rate and do not offer the same perks as a government loan. Even still, private loans are easier to qualify for. If you’re credit-worthy, there isn’t a limit to how much you can borrow.

Government loans, on the other hand, offer lower interest rates. One type of government loan, the Stafford loan, can be subsidized or unsubsidized. A subsidized Stafford loan means that the government pays the interest on that loan while you’re in school. These loans are awarded on a needs-based basis, whereas unsubsidized loans can be taken out by anybody. Stafford loans can be as high as $18,500 for unsubsidized and $8,500 for subsidized. The lifetime maximum is $138,500 for both undergraduate and graduate study. Stafford loans can be distributed directly by the federal government or via a bank or credit union under the Federal Family Education Loan program. They come with longer repayment terms, lower rates, and deferments that allow payment after a grace period.
Financing your school education based solely on a private law school loan can be very costly in the long run. Make sure you explore your eligibility for both private and government loans and proceed accordingly.

BIG Mike is a well known author, developer and Adsense expert as well as the owner of Niche Maniacs - a unique Adsense Marketing System designed to build long-term passive income streams from Adsense, YPN, Chitika and other PPC services.