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Once upon a time, there was a beautiful maiden who felt trapped. In a wild moment, her father had told the king that she could spin straw into gold, but she couldn’t, of course, even on pain of death. So when a funny little creature offered to accomplish the task for her and save her life, she jumped at the chance. The catch was that in return, she had to promise him her first-born child. She agreed readily, assuming that by the time she had to make good on her promise, something would surely turn up… In the fairy tale, of course, something does turn up, and the maiden gets to have her cake and eat it too. So why are we asking law students to consider the case of Rumpelstiltskin? Because the beleaguered maiden personifies the universal human genius for denial. As in this example, we seize the present opportunity to make our wishes come true, and avoid thinking about the future cost. This is what too many law students are doing today. Their financial aid advisers (and even some of their loan providers) have explained over and over that they should figure out their costs to the penny, then borrow only what they need and can afford to repay. Most students do attend the financial aid counseling sessions that are required when they enter school, but many don’t seem to hear what is being said. It’s not salient information for them; their minds are on their course work and the start of a new academic odyssey. And because they are not listening, they wind up borrowing too heedlessly and spending too freely, using more money than they need to live on. LOGICAL FATALISM People have a hard time grasping the reality of debt. Many students start school with three unarticulated beliefs, and usually manage to hold onto them, despite evidence to the contrary, all the way through school. These three beliefs are a combination of logic and fatalism: � “The only way I’m going to go to law school is if I borrow the money. I have no other option.” (In many cases, perfectly true.) � “My school would never do anything harmful to me. Therefore, if they approve of me borrowing tens of thousands of dollars each year, it must be OK.” (Perfectly logical.) � “I’ll be able to pay it all back because I’m going to get a well-paying job.” They believe this obdurately, whether the current job market is good or bad. They believe it even if their year-one class rank is low, knowing that the odds are against their being able to improve their rank in coming years, and even knowing that most law firms interview based on class ranking. They cling tenaciously to a secret faith that they will be the exception to the rule. The alternative — that they might not get a good job, or any job, after borrowing tens of thousands of dollars — is unthinkable. Deep down, they must know they’re going to have to repay the money no matter what, even if they’re unemployed or underemployed. But that’s too scary to think about, so they focus on their great expectations. In addition, students often do not grasp what economists call “the marginal cost” of borrowing money. They think, “Well, if I’m already going to owe $50,000, what’s another $5,000? They don’t seem to realize that $55,000 is a lot more to owe than $50,000 — and that the actual figure will be even higher as interest accrues on every dime, every day. And finally, since they know they’ll have at least a six-month grace period after they graduate and won’t have to think about repaying their education loans until then, they simply put the subject out of their minds. Unhappily, for many graduates, their actual opportunities will not match their ill-conceived expectations — but they’ll still have to pay the piper. As hard as it is to get their attention, schools owe it to their students — who, after all, they hope will become satisfied, generous alumni someday — to do everything possible to help them limit how much they owe when the time comes to repay. The main thing students have to grasp is that they can’t have their pizza and eat it too. It is incumbent upon them to figure out a budget based on minimal expenses while they’re in school and stick to it even though it requires temporarily accepting a minimal lifestyle. Their mantra should be this: “If I live like a lawyer while I’m a student, I’ll have to live like a student once I’m a lawyer.” Students shouldn’t be discouraged from making the commitment to a professional education, from pursuing what they have decided they want for their lives. However, they should understand that their dreams will come true at a price, and that they should try to keep the price as low as possible. An insolvent ending is not a happy ending, as we all learn eventually. Students should learn it early — before they have to give up that first-born child to pay the piper. Nancy Wingate is a communications manager at Access Group, a nonprofit organization that provides affordable loans and related services to graduate and professional students. She has also worked as a television producer, newspaper reporter, college administrator, garden columnist and freelance writer.

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