Paying for Law School: Loans or Savings or Both? Forum

[sawwhetowl81]

Hi everyone!

I'm figuring out my finances for the next three years, and I'm trying to figure out whether to take out FAFSA grad unsubsidized loans (interest rate currently 6.54%), use my savings/investments, or use a combination to pay for 1L year and beyond. I do not plan to touch my retirement savings or my emergency fund.

For some context, the total COA per year on the school's website is about $75k. I anticipate mine being less than this amount since my SO will help with general living expenses/help subsidize my rent by taking on a higher % of the split. I received a $30k scholarship for each academic year (non-conditional) and am currently applying for as many scholarships as I can.

Here's a glimpse of my financial situation:
- 30k in my checking/savings (includes my emergency fund) - expecting a few more paychecks before I quit next month
- 30k in investments (not including retirement savings)
- I currently hold 0 debt: very lucky to attend a college that covered full demonstrated need
- Credit score: 800 (would only impact non-FAFSA loan options I believe)

Goals:
- I would like to work in Big Law during my 2L summer and upon graduation. I currently have 3 years of experience as a paralegal in Big Law and can see myself at the same (or a similar) firm as an attorney. Other types of law careers interest me as well, but this is my goal for now
- I would like to buy a house/apartment within 1-3 years after graduation. My SO is already saving towards this shared goal

Questions:
1) How much should I keep in my emergency fund while in grad school?
2) Should I take the loan amount I was given (20,500/year from FAFSA), or should I avoid debt as much as possible and pay with my savings to get me through at least 1L?
3) Is it worth tapping into my investments to offset future debt, or is it better to take on some debt?
4) Is it better to pay what I can for now, and take on debt later as needed?

Any tips or guidance are very much appreciated. I am the first person in my family to attend law school, and I want to ensure I weigh my options as much as possible! Thank you

[CanadianWolf]

To which law schools have you been offered admission ?

The best way to pay for law school is by earning a high LSAT score.

[silenttimer]

Have some side money, but I recommend taking the least amount of loan possible.

[nealric]

You'd probably want to take out maximum subsidized loans unless you get a full ride scholarship (or close) and can live on your savings/SA work until graduation. Since interest doesn't accrue until graduation, it's free money while you are in school (especially in light of current inflation rates). At worst, you could put it in ibonds and make a guaranteed profit.

[crazywafflez]

You'd probably want to take out maximum subsidized loans unless you get a full ride scholarship (or close) and can live on your savings/SA work until graduation. Since interest doesn't accrue until graduation, it's free money while you are in school (especially in light of current inflation rates). At worst, you could put it in ibonds and make a guaranteed profit.

TCR