January 14, 2019

How I'm Paying Off My Law School Debt

How to pay off your law school loans. How to get out of law school debt. How to minimize your law school loans. How to get a law school loan. Private vs public law school loan. How much debt to expect after law school. How much does law school really cost. Law school debt repayment plan. How to reduce law school loans interest rates. How to refinance your law school loans. Should you refinance your law school loans. Law school debt help for free. Law school grad debt for 2019. How to pay off your law school loans fast. Law school loan refinance. How to budget for law school. Save on law school loans by working during law school. How much does your 1L year of law school cost. How to find law school scholarships. law school blog. law student blogger. law school tips. law school advice | brazenandbrunette.com

Happy 2019 everyone!! I wanted this post to be my first post of the year because my New Years resolution is to get on top of my financial situation and take on my debt head on. 

If we're being honest, my debt really annoys me sometimes. I look at how much I owe and think about the cute little house I could buy with it instead, or the crazy nice car I could get myself, or the trip of a lifetime flying first class around the world and staying in some nice ass hotels with the money that I've spent on a law degree. I look at my friends who graduated without debt and see all the fun things they get to do because they can afford to go to brunch every weekend and fly home to surprise their parents or buy that thing that they really want, because every though I make more than them, they have more money to blow each month. So, that's hard. BUT, I do think that it was worth it to go to law school and although my debt is a huge thing in my life, I'm still very glad I went to law school.

So let's talk about my debt. How much it actually cost me to go to law school, how I helped my debt while I'm in law school, and my plan to not die still owing money!


My law school debt

First off, how much I owe...


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I keep track of my debt using this app


Yep. It's a pretty big number. But I am grateful that my parents were able to support me through college so my debt is only law school and doesn't also include college debt too. Also shoutout to my dad for helping cover my MPRE fee and my Barbri fee. My loans are made up of the maximum amount that I could get from FASFA (government loan) and whatever FASFA didn't cover was paid for by Sallie May (private loan). My government loan definitely gave me much better interest rates than my private loan, but sadly my 1L year my FASFA wasn't even enough to cover my tuition.

Related: How to get a student loan for law school

A big part of why that number is so high is because my 1L year I went to a private school which cost almost double than the school that I went to my 2L/3L year. This is kind of a bummer because it means that my biggest loan has been accruing interest the longest, but it is what it is. 

Another reason why that number is so high is because I used student loans to pay for everything— tuition, books, housing, groceries, gas, everything that I had to spend money on for 3 years came from loans.

Related: A breakdown of my 0L, 1L, and 2L expenses


How I minimized my law school debt

The easiest way to minimize your law school debt is to look for scholarships!! Try to get as many scholarships as you can before law school, and then after every semester 1) go in to the financial aid office and try to negotiate a better scholarship [assuming you have decent grades, if you need help with your grades go here], and 2) see if you qualify for any external scholarships. 


One thing I started doing after my 1L year was to take out my scholarships after each semester instead of one big loan at the beginning of every year. The idea is that if you take out say $15k in August and another $15k in January, then the spring semester $15k isn't sitting there accruing interest while it's not being used during the fall semester. I haven't done the math to see how much it actually saves, but I do feel like it helps. One downside though is that doing this means more "hard credit checks" on your credit score so it might lower your credit score a little (idk by how much) which might make your new interest rate higher for your private loans. Ask your parents or someone who's good with math help you calculate it and find the best option for you. 

Probably the thing that felt like helped me the most with my debt was working during the summer between my 2L and 3L year and for the whole fall semester of my 3L year. This helped make the money that I was taking out stretch so much further. In fact, I was very excited that I was able to save enough both semesters of my 3L year that I had enough leftover money to pay for 2 months' rent and groceries during the Bar so I actually didn't have to take out a Bar prep loan!


The last thing that I did to help my debt while I was still in school was that I signed up for automatic payments on my loans each month. It wasn't much-- I think I paid like $200 a month of my private loans and like $75 a month of my government loan. I realize it sounds absolutely counter-intuitive to use loan money to pay off your loans but hear me out. First off, I was able to choose a better interest rate from the start by agreeing to opt-in to pay I think it was $25 a month on each private loan (I chose to pay extra each month). Secondly, this helped keep my interest rate down by juuuust a teensy bit. Yeah it's not much but hey if it helps, I was all for it. Third, it boosted my credit score to be consistently paying on my debt so with each new loan that I took out (remember I took out 5 private loans [1 1L, 2 2L, and 2 3L]) I qualified for a better interest rate. I ended up having an interest rate on my last loan be about 1 full percentage lower than on my first loan! 


My law school debt repayment plan

So here's my focus for 2019! The first thing that I've already done in 2019, even though we're only like 2 weeks in, is refinance my loans through SoFi. What this means is that basically I have them pay off all of my private loans and then now I owe SoFi for my loans but instead of having 5 loans to pay off that all have different interest rates, I have 1 loan to pay off at 1 interest rate. And because as I just mentioned my credit score went up from when I was a 0L to now, I qualified for a new interest rate that's 2% lower than my highest old interest rate and 1% lower than my lowest old interest rate (I realize this gets confusing because of math but bear with me). This will end up saving me thousands over the course of my repayment plan. If you want to learn more about refinancing with SoFi, use this link and you can get $100 if you sign up.

The second thing that I'm doing this year is that I'm paying every other week on my loans. I received a 0.25% lower interest by signing up for automatic payment on my loan, but I'll actually be paying extra each month. The idea is that if you pay every other week you end up paying a little extra each year because some months have 5 weeks in them, but to you it doesn't feel like you're paying extra. I just set up a reminder in my phone for every other Saturday to pay a little extra on my loan.

And as for my repayment plan, what I've decided to do is the Dave Ramsey approach to debt where I'm going to make the minimum payments on my government loan each month and use any extra money that I have to pay off my private loan first (called the debt avalanche). Using this method, I'll completely put all of my attention on my private loan first because it has a higher interest rate, and then after that's completely paid off I'll turn my focus to my government loan with the lower interest rate. The idea behind this is that if you focus your attention to the higher interest loan first, you'll end up saving money on interest in the long run. 

Let's talk numbers. What does this look like for me. I'm in the 20-year repayment plan for my private loan, which costs me somewhere around $650 a month. I'm in the 15-year repayment plan for my government loan, which costs me somewhere around $750 a month. Ideally, which my debt avalanche approach to debt I wish the year payoff plans were swapped but I'm working with what I was given. Anyways, my plan is to spend about $1000 from each paycheck on my debt— $1k from my first paycheck of the month to my private loan, and then $750 from my second paycheck to my government loan and $300 from my second paycheck to my private loan. To do this, Ryan and I are really focused on our budget  (we each use this app to budget) and we actually live a pretty frugal lifestyle most of the time.


Lastly, my plan is for any raise I get in the future to go directly to my debt. I've read from so many people to just act like you never got a raise (I mean you're already making your salary work for your budget). The problem is that if you use your raise to treat yo self, then it's really hard for you to scale back to being #poor after you've gotten used to the good life (it's called the golden handcuffs problem). Another thing that I'm planning to do is use any tax refunds that I get to go to my loans, for the same reason. When I first started my job and was filing out the paperwork, I actually elected to have less money taken out of my paycheck each month/less or no tax refund just so that I could have more money each paycheck to work on spending at least $2k a month on my loans.

Okay congratulations you've made it to the end! Sorry it's such a long post but also I haven't posted in a while so I guess this makes up for it lol. I'm very much brand new to this whole student debt situation, so we'll see what I end up changing, what works out really well for me, and what else I find out about. Right now, my plan is to do a law school debt update at the beginning of every year because I know these posts can be boring/scary so I think once a year will help y'all see how it's going without being too much. Okay so I guess we'll see where this goes in 2019!!


let's be friends!

6 comments:

  1. Yes, please update us. Current 1L here that has never had to take out loans before law school, so all of this is super daunting to me.

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  3. Hi Nikki!! I love your blog!! I was wondering if you could do an entry on how you and your boyfriend met? Also, what exactly do you do at your job? I'm super curious! Could you go into more detail on how you got your current job? Thanks! Keep up the great work!

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