Credit and Debt Management
Your legal education should be considered an investment that will increase in value over time. You should begin planning now to secure financial aid to cover the costs associated with law school attendance. By planning ahead, you will better understand the financial obligations that you will be assuming.
Plan ahead - Make sure that you do the following:
- Explore scholarship opportunities through outside organizations
- Check with your employer for tuition reimbursement opportunities
- Review federal student loan requirements and limits
- Request your free credit report at www.annualcreditreport.com
- Review and clean up your credit report if you plan to borrow a Graduate PLUS loan
- Develop your personal financial literacy at www.mymoney.gov
- Look at Mapping Your Future's 12-step Guide to Financial Success (PDF)
The most import way to minimize debt incurred during law school is through proper budgeting. Stetson sets a standard living expense budget for students. Living within a modest budget will allow you to maintain control of your finances to borrow less. We recommend that you use an interactive Budget Calculator to begin the process.
- Use a budget to help manage debt wisely
- Pay all bills on time
- If you miss a payment, get current and stay current
- Keep credit card balances low and make the maximum payment each month
- Pay off debt rather than moving it around to new credit cards
- Limit the number of credit cards that you carry with you
- Open new credit cards over time rather than several at once
- Follow creditors' guidelines for dispute on your accounts. Not paying the disputed amount is a harmful strategy
- Check your credit report from one of the three credit bureaus
It is commonly accepted that the costs associated with education can be high. Stetson University College of Law recognizes this, and is committed to helping students understand their debt and to educating students on strategies for managing debt during and after law school. Many students find it easy to ignore their student loan debt level while in school because they typically do not have to make payments until after graduation. However, given the cost of education, you should take an active role in understanding and managing your student debt while in school. The information below has been developed to assist you in considering strategies for reducing your amount of borrowing, and managing your debt level while enrolled. Reducing borrowing and paying down student loans, or student loan interest, while enrolled can yield substantial savings.
Frequently Asked Questions
How can I reduce my borrowing?
Financial aid awards are communicated via Banner Web and e-mail. Under this process, Stetson Law notifies you of the maximum amount of aid for which you are eligible. This eligibility may be a result of a combination of various loan types, including Stafford Unsubsidized and Graduate Plus loans.
Once your loan award is made, you must log onto Banner Web to "accept" your loans. At this point, you may either decline to borrow, or you may reduce the amount of loans. You have 14 days from the date your aid has posted to decline or reduce your loans. All students are notified by e-mail that aid has posted to their account. No interest will accrue if you timely reduce or return aid within this 14-day window.
Simply because you can borrow money does not mean that you should. Because all loans will eventually have interest added, your actual repayment is going to be much higher than what you actually borrow. Make a budget and stick to it, borrowing only what you actually need.
If I don't reduce my loans within the 14 days, can I reduce them later?
Yes. While not legally required to return aid after 14 days, Stetson Law will assist you in returning money to the lender and reducing your loan amounts after that point but only before you actually take possession of the money. But remember that, if you did not reduce or decline borrowing within the initial 14-day window explained above, interest for which you are responsible may already be accruing. To reduce your loans within the current semester before you take possession of the money, you must complete a form in the Business Office specifying the amount of your credit balance that you want returned and the loan(s) to which you want it applied.
You cannot return more money to be applied against a loan than you have borrowed for that semester. Once you receive and cash a refund check for a given semester, your only vehicle by which to reduce your loans will be for you to make payments directly to the lender. That option is discussed in more detail below.
I missed my window for having Stetson Law reduce my loans. What can I do to reduce my debt?
Directing any extra cash you have toward either paying interest that is accruing or even reducing principal will save you money in the long run. You can make payments to your lender while in school. It's easy. Simply contact your lender to find out how to do so and where to send the payments. You may even be able to do it online. Need help figuring this out? Just contact the Office of Admissions and Student Financial Planning for assistance in learning how to navigate this process.
Do you have other strategies for managing debt?
Always borrow federal loans first if they are available. Also, your aid eligibility can be as a result of a combination of various loan types, including the Stafford Subsidized, Stafford Unsubsidized, and Graduate Plus loans. When you borrow, always borrow in this order:
- Stafford Unsubsidized Loan: interest begins accumulating immediately although you are not required to pay it while in school.
- Grad Plus loan: interest begins accumulating immediately although you are not required to pay it while in school. Because this loan carries a higher interest rate than the Stafford loan, this should always be the last loan to take out to meet your borrowing needs.
When you want to make payments, go in reverse order, paying off higher interest loans first.
If I have the ability to borrow more than I think I need, should I borrow it and pay off my credit cards?
It depends. If you have an interest rate higher than your student loans and are making the minimum or close to the minimum in credit cards payments, the interest you are accruing will make this debt hard to manage. If you have additional borrowing ability on a federal student loan (meaning you do not need to borrow all that is offered to you), you can consider borrowing the entire amount offered to pay off your credit card in full. NOTE: this works only once. If you again create a credit card balance, you will not have solved the problem. This debt management suggestion is successful only if you then commit to spending within your means and paying off your credit card in full each month.
Where can I get more help on learning to manage my debt?
Stetson Law hosts financial literacy workshops during orientation, prior to graduation, and periodically offers a short course in Financial Advocacy. These are excellent ways to learn about financial aid, budgeting, repayment plans, loan forgiveness, Bar Exam and related costs, and debt issues. You can also contact the Office of Admissions and Student Financial Planning for an appointment and we can work with you individually, as well. Also, check out some of the online resources that are available. Some examples include: