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One of the cruel truths about your current life is that it takes a lot of money to become a lawyer. This you already know, since you’ve probably started borrowing money to pay for law school. But have you fully considered the implications — the sheer weight — of what that accumulated debt will be after you graduate? According to one estimate, the median debt load for those students who tapped both federal and private educational funding sources and graduated in 1998 was approximately $80,000. That doesn’t include credit card debt, which most students have as well and which is the most expensive consumer debt around — short of your friendly neighborhood loan shark. Now’s the time to think about the impact your student loans will have after graduation when you’re trying to buy a home, start a family, invest in the stock market, or do any of the other things rational Americans do with their money. First piece of advice: Keep your lifestyle under control. You won’t find anyone more passionate on the importance of students living within their means than Joseph D. Harbaugh, dean of Nova Southeastern University’s Shepard Broad Law Center. A veteran legal educator who’s pretty much seen it all, Harbaugh says many law students have spending habits that are difficult to justify when you consider that they are usually spending borrowed money. Consider cars, which Harbaugh says is a frequent topic of conversation among incredulous law school instructors. “A faculty member will point to the student parking lot and say, ‘There are better cars there than in the faculty parking lot! ‘” he moans. Does it make sense to spend, say, $400 a month to lease a really nice car when your current earning power couldn’t possibly justify it? Another of Harbaugh’s pet peeves is the choice of housing many students make. Too often they sign expensive leases on nice cribs close to campus when something more plebian (and more distant) would suffice. At the very least, find someone to share your apartment with. And then there are the purchases that end up on revolving credit cards: dinners out, music CDs, cheap airline tickets, and a hotel room on the beach in Florida for a little well deserved R&R between semesters. I mean, even law students are entitled to a life — right? Yes, I am getting a little preachy now. But before you close this browser window, hear me out. For most students, the more they spend, the more they have to borrow. Even if you’re using personal savings, money from family, or income from a part-time job to pay part of your tuition and living expenses, you’re probably financing most of your education with long-term debt. What that really means is you’re taking a draw against future income. The problem is, you can’t be sure what your future income will be. Second piece of advice: Be reasonable about how much you’ll earn after graduation and how quickly you’ll achieve that desired income. Jeffrey E. Hanson, director of debt management services at Access Group Inc., a private educational lender, says that students tend to be overly optimistic about how quickly they’ll be able to find a job and how fast their income will rise. “They tend to be particularly optimistic about how far that money will go,” Hanson says. The median starting salary for a new attorney in 2000 was $50,000. I probably don’t have to tell you that $50K won’t stretch very far if you’re trying to cover a car payment, rent, student loans, and credit cards. The $80K number cited earlier came from Hanson, who says the estimated monthly repayment on that sum is $914. That’s $10,968 a year, or about 22 percent of your pretax salary if you make $50,000. Third piece of advice: Keep track of your debt. Harbaugh says that some of his graduating students are shocked — shocked! — to discover how much they have accrued in student loans. “It’s amazing how much financial amnesia students have,” he says. “They get to the end of law school and have no idea how much they borrowed. They should know what their borrowings are.” It’s easier to over-borrow when you have shielded yourself from the emotional impact of excessive debt by simply refusing to think about it, perhaps on the naive assumption that the future will somehow take care of itself. It will, but at what cost to you? Final piece of advice: Take control of your financial life. Make a realistic budget, and try to stick with it. Even if you occasionally blow it, you’ll still spend more responsibly than if you have no budget at all. “You can’t drift from financial decision to financial decision to financial decision, from borrowing to borrowing,” says Harbaugh. “You have to begin with a budget.” Karen Gross, who teaches bankruptcy law at New York Law School, urges students there to actively manage their credit rating by obtaining their credit reports from the three main credit bureaus (Equifax, Transunion, and Experian, all three of which are available online) and fixing the errors that frequently appear in their files. She also tells them that if they have good relationships with creditors that aren’t on the list, make sure they’re added on. And if an account has been closed, make sure your report reflects that. “The net consequences of these things taken together allows you to improve how creditors see you,” she says. It will also draw an important connection between your debt and your creditworthiness, because failing to handle the first will surely destroy the second. If there’s a fitting final word on this subject, it probably comes from Hanson, who zeroes in on what is probably the most important issue of all. “You owe it to yourself to be as honest with yourself as possible,” he says. And you can start with a little self-honesty about debt.

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