The average law student who graduated from a private university in 2008 borrowed more than $91,500 on the way to earning that degree, reported by Daily Business Review.
Combine that with leftover undergraduate debt and the shrinking job market, and you've got a surefire recipe for postgraduate financial fright. In a sharp departure from recent history -- when students coming out of even mid-tier schools could count on commanding six-figure starting salaries -- law school debt is now a heavy burden.
"Graduating law students have just spent three years working very hard, and suddenly they're out on their own in very uncertain times," says Beth Kobliner, author of "Get a Financial Life: Personal Finance in Your Twenties and Thirties." "It's easy to feel overwhelmed, but the best thing you can do is to educate yourself about your options."
Law school grads may have a particularly heavy burden to bear but, like other borrowers, they have several options that can help them in this regard. For those with debt worries, here are four questions to ask.
WHO OWNS YOUR LOANS?
Debt is often sold on the secondary market, with the debtor as the income stream. One loan can be sold many times, making it tricky to know who owns yours. Joe Russo, director of student financial strategies at the University of Notre Dame Law School, suggests visiting www.nslds.ed.gov. The U.S. Department of Education database has information on all government-backed loans, the vast majority of student debt. It's the best resource for finding out how much you owe -- and to whom.
ARE YOU READY TO STRETCH?
Once you know who's collecting your payments, ask about loan consolidation and extension. Standard terms call for student loans to be repaid in 120 equal monthly installments over 10 years. These days, there are various payment plans, especially for government-backed loans including Stafford, Perkins and PLUS. Those with more than $30,000 in government-backed debt from college, law school or both can combine balances directly with the department and extend the repayment period to 20 or even 30 years. Monthly payments will be lower, but you'll pay more in interest over the life of the loan.
DOES THE NEW RULE APPLY?
Find out if you qualify for income-based repayment. William Hoye, director of financial aid at Duke University Law School, said this new program for government-backed loans is one that every law grad should know about. The program offers especially attractive repayment terms for those who take public interest jobs.
HOW LOW WILL THEY GO?
If you are unemployed and unable to make any payments, ask your lender for a deferment or forbearance. Both delay payments for a defined period of time and are relatively easy to obtain, especially if you're out of work. But Patricia Christel, a spokesman for Sallie Mae, one of the largest student loan servicers, said a deferment or forbearance should be a last resort. Your lender will tell you what the criteria for qualifying are. Beth Kobliner recommends a deferment, if possible, because the federal government will often subsidize the interest payments. With a loan forbearance, interest continues to accrue. Source: Matt Straquadine of the Daily Business Review.
Building a bankruptcy practice and becoming a bankruptcy lawyer may be the best bet for some law school graduates to survive in the current work environment. Bankruptcy attorneys are in huge demand in a hot market.
Warmest Regards,
Bob Schaller
Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.
I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.
For information about Chapter 7 bankruptcy Click Here
For information about Chapter 13 bankruptcy Click Here
You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.
NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.
I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.
Monday, October 5, 2009
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment