Considering law school? Get ready to map out your loan strategy
As a first-generation law student applying to George Mason University Antonin Scalia Law School, Ann Petros didn’t have as many resources as other students.
“Going into FAFSA [Free Application for Federal Student Aid], going through all of those documents, I had no idea what I was signing. It was really overwhelming,” says Petros, now the vice president of policy engagement and credit union operations at America’s Credit Unions. “Being a child of an immigrant family, not having as many resources to begin with definitely heightened the difficulty level.”
A law degree is a weighty financial decision; the average student loan debt load is $112,500, according to the ABA 2024 publication Student Debt, COVID-19 Relief, and Loan Forgiveness: Perspectives from Today’s Young Lawyers.
That survey also found that only 42% of respondents understood the impact of compounding interest and fees from deferring student loan payments, and only 52% had a clear understanding of personal finance issues. Only 25% clearly understood how their student loans would impact their careers, and just 28% clearly understood the impact it would have on their personal lives, it found.
“That’s a bit of a disconnect, or maybe it’s an embarrassment, right?” says Petros, who contributed to the report.
To head off nasty surprises when the loan payments begin, experts advise aspiring law students to devote time, math skills and measured considerations to ensure they are aware and comfortable with the financial commitments they are making.
Informed decision
Ideally, the journey to an informed financial decision starts ahead of law school, when applicants consider what type of law they want to practice and where they want to go to school, experts say.
With just tuition and fees hitting over $80,000 annually at some law schools, sticker shock is real.
Derek Brainard is the director of financial information at the AccessLex Institute, which provides free financial planning lessons and one-on-one financial coaching through its MAX program, which is offered at 190 law schools. (Photo courtesy of the AccessLex Institute)
“We frame it as ‘this is how much you are investing for legal education,’” says Derek Brainard, director of financial information at the AccessLex Institute, which provides free financial planning lessons and one-on-one financial coaching through its MAX program, which is offered at 190 law schools.
Make a budget for one school year—including tuition and fees, living expenses like housing, phone, rent and transportation, experts say.
Then, plug those numbers into the free online AccessLex Student Loan Calculator, along with remaining balances on your undergraduate or other student loans, says Susan Bogart, financial aid director at Penn State Dickinson Law.
Next, answer the online questions about any savings you’ll use to offset costs as well as scholarships. The calculator then churns out the total cost of your law degree as well as how much you will owe, plus various scenarios for repayment.
Many students are shocked to see the impact of compound interest, which starts the day of the first tuition payment.
“By the time you are out of law school, guess what? You owe a lot more than you took out,” Petros says, “and that adds up real quick.”
Tailored options
Those total cost numbers can be off-putting, and there’s no one-size-fits-all loan solution since different people have different financial resources and different career goals that result in a wide range of salaries, financial experts say.
“People expect different things from their law school investments,” says Stephen Brown, Fordham School of Law’s assistant dean of enrollment. “It may be a BigLaw job, it may be enough to pay the bills, or it may be going out to save the world.”
Your career trajectory might influence your borrowing strategy. Research first-year salaries right out of law school in your field of interest to determine what percentage of your pay might go to those loans, AccessLex’s Brainard says.
“Is your debt-to-income ratio still in a reasonable range?” he asks. “That is what really matters in the eyes of mortgage lenders and other credit lenders down the road.”
A BigLaw wannabe might want to avoid taking out more loans than needed and then aim to aggressively repay the entire debt within 10 years, for instance.
But an aspiring public service lawyer, for instance, might lean on federal loans, which have income-driven repayment plans, and avoid private loans, which do not, Brainard says.
On July 1, 2026, the federal Grad PLUS loans that have allowed graduate students to take out their entire cost of attendance minus other financial aid will be phased out, thanks to the One Big Beautiful Bill Act. Going forward, law students will lean more heavily on unsubsidized federal loans limited to $50,000 a year and $200,000 for graduate education over a lifetime plus private loans from banks or other lenders.
“If there’s a gap between what the school’s given you and your loans, that is where private loans are going to come in to play much more,” Brainard adds.
Before applying for the loans, check your credit report and work to correct any errors, especially if you need a private loan, Brainard says, and consider who might cosign a loan, if that’s necessary.
School daze
Due diligence regarding loans doesn’t end when law school starts.
Each semester, your loan payment goes directly to the law school to cover tuition and mandatory fees, Brown says, but the “overpayment”—meaning the amount exceeding school costs that is meant to cover your living expenses—will then be sent to you as a refund.
Again, budgeting is key, but this time, break it down to monthly expenses, Petros says. Live within those guardrails to avoid running out of food or rent money at finals, she adds, and consider paying rent for the semester up front when the loan funds come in.
Decide whether working part time during law school could offset living expenses.
“Obviously, it makes life a little harder at the time, but reducing that debt load at the end probably is going to be worth it,” Petros says. Be sure you know if your summer job will be paying you—and if you can afford to live on that salary.
And each semester, make sure your loan disbursement is made correctly, Brown says. “It’s reflected on your federal or private loan account,” he says.
Don’t be shy about asking for help, either via AccessLex’s free financial coaching or your school’s financial aid office.
“Financial aid is your friend,” says Penn State Law’s Bogart, noting that the office is able to help with personal budgeting as well as scholarship searches and changes in student loan policy.
And in case an emergency prevents you from finishing a semester—whether it is appendicitis or a hurricane destroying your home—keep in touch with school administrators, Fordham’s Brown says. While there could be some penalties and additional semesters to pay for as a result, some schools might offer emergency financial resources that can help through a tough time, he adds.
Raising the bar
After law school comes more school for many bar candidates who take a prep course, which can cost $2,050 on the low end of the scale, according to StateRequirement. Registration costs for the exam itself varies from state to state, ranging from $100 to $1,000, according to StateRequirement, excluding travel costs to get to the test center. Note that this can up to thousands of dollars and demand so much time that many people do not work while they study for the bar.
Still, the clock toward repayment is ticking. Expect your first federal loan payment to come six months after you graduate or leave school, according to the Consumer Financial Protection Bureau. For private loans, lenders will reach out to you when repayment begins.
Once they start, stay on top of your payments. “You don’t want to be delinquent,” Petros says. “Budget accordingly, and ensure that you are allocating enough to make the minimum payments, at very least.”
If you hit hard times, talk to your lender, but know that declaring bankruptcy isn’t really an option for federal loans or for most private loans as well, Brown says.
If you have windfall like an inheritance or bonus, pay extra to directly reduce the principal.
Petros follows that advice herself, paying down some loans and consolidating others at a favorable interest rate that she aims to pay off in four years instead of five.
“It feels great to have a more manageable monthly payment that I don’t have to worry about,” she adds.
“Make lump sum payments as often as possible to get that principal down,” Petros says. “It’ll make a big difference in the end.”
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