For many students, financing their education may require a long-term commitment, which can include repaying student loans for up to 10 - 25 years.  Carefully considering all of your financial options prior to starting law school, while attending, and after graduation, could significantly impact your student loan indebtedness and overall financial well-being.

An important factor worth considering when reviewing the implications of financing your law school education is the “return on investment” (ROI). How much will law school cost compared to how much income you will make over your lifetime as an attorney or however you may utilize your law degree professionally.

Cardozo’s Debt Management website is designed to help students navigate through the financial aid process from start to finish. This process usually begins prior to starting law school, during the admissions application phase for students, and can last for several years after graduation while repaying student loans.  It is imperative that you make wise choices about your finances, from making a sensible monthly living expense budget while in law school, to setting up the appropriate repayment plan for your student loans shortly after graduating. We strongly encourage student loan borrowers to take full advantage of any and all available programs after graduating law school to help alleviate the financial burden of repayment, such as Income Driven Repayment plans, the Public Service Loan Forgiveness program, and Cardozo’s Loan Repayment Assistance Program (LRAP). Details regarding these and other programs are below.

Making informed decisions and being proactive regarding your finances will be beneficial in your professional and personal life. If you have any questions regarding financial aid and debt management, please feel free to contact us at cardozostudentaid@yu.edu.  

Debt Management Sections:

• Exhaust Scholarship and Grant Opportunities
• Reduce Your Expenses & Spending
• Budgeting - Managing Your Money (During School and Afterwards)
• Federal Loans vs. Non-Federal Loans
• Exit Counseling
• Federal Loan Repayment
• Forgiveness Programs
• Repayment Strategies for Private Sector and Public Service Employees
• Loan Default Prevention

Before you consider taking out student loans, it’s recommended that you first exhaust all of your scholarship and grant opportunities. Maximizing your scholarships (free money) and minimizing your student loan debt (money you need to repay) is an ideal and prudent way to finance your law school education.

When you apply to Cardozo, your admissions application is automatically reviewed for scholarship consideration. If you are admitted to Cardozo with a merit scholarship, you will be notified of your scholarship award by Cardozo’s Admissions Office.

Students who are admitted to Cardozo with a minimal merit scholarship or without scholarship, may also pursue need-based aid funding at Cardozo. Please complete your FAFSA or Cardozo’s International Student Financial Aid Application (for students ineligible for federal aid) and send an email to Cardozo’s Office of Student Finance inquiring about institutional need-based aid. Students who are eligible for Cardozo’s need-based aid will be notified by the Office of Student Finance.

Once your institutional scholarship and grant options have been exhausted, it is recommended that you search for external scholarship and grant opportunities. There are several websites and online search engines that you can utilize. Generally, external scholarship and grant opportunities are more widely available for 2nd and 3rd year J.D. students. It is recommended that you routinely search for external scholarship and grant opportunities throughout your 3 years of law school. Please visit Cardozo’s scholarship website for links to various external scholarship and grant websites and search engines.

If you have determined that you will require student loans to help fund your law school education, including your living expenses (rent, utilities, food, books, transportation, etc.), it is recommended that you look for as many ways to reduce your expenses and spending, and even eliminate unnecessary expenses.

Examples:

• Reducing an expense:  Can you find cheaper rent?  Do you plan on living with roommates?  Cardozo’s current COA budget rent (“room”) estimate is $1,500 per month.  If your actual rent was less than our estimate, for example, $1,000 per month, you would save $500 per month, $5,000 per academic year, and $15,000 over three academic years!  If you borrowed student loans to pay for your rent, you could potentially save over $30,000 over a 25-year loan repayment!
• Eliminating an unnecessary expense: If you are accustomed to eating out frequently, it would be more cost efficient to prepare your own meals. If you could reduce your food expense by $100 per week, by increasing your groceries and decreasing eating at restaurants or take-out, you would save $400 per month, $4,000 per academic year, $12,000 over three years. If you borrowed student loans to pay for your rent, you could potentially save over $24,000 over a 25-year loan repayment!

Additional examples:

• Transportation – use public transportation (subways and buses), ride a bike, walk. Eliminate cabs and Ubers, etc.
• Books – purchase used books when possible, utilize the library and other book-sharing options  
• Utilities – split with roommates
• Miscellaneous food & drinks – snacks, coffee, etc. – purchase in grocery stores and in bulk.
• Miscellaneous expenses – household items, streaming services, etc., - pare down and/or split with roommates.

The cost of obtaining a graduate education represents a substantial financial commitment. If you are like many students today, you may need to rely on loans to help pay for your education. In doing so, it is important to understand the financial obligation you are undertaking and what it will mean to you in the future. By taking a proactive approach and exercising prudent borrowing strategies, you can help ensure success in meeting your personal and professional objectives. Budget planning should be an important step in your loan borrowing strategy. It will help you prioritize expenses, including reducing/eliminating unnecessary expenses while in school, and will help you determine how much loan funding you may need to borrow to cover tuition, fees, and living expenses.

During School:

We recommend that you develop a personalized budget prior to starting law school.  Your budget should include all of your expected expenses per academic year - for all three years!  Financial aid is set up per academic year, but you can expect that your financial aid package will be similar from year to year (as long as you meet all of the necessary criteria). 

Budget items to consider (per academic year):

• Tuition and fees
• Rent
• Food 
• Books
• Transportation
• Medical (health insurance)
• Supplies
• Miscellaneous

Budget items to consider (all three years):

Same as the items above, but please keep in mind that many costs and expenses increase from year to year!

Living on a Budget:

1. Determine how you expect to fund all of your expenses. 

Do you plan on utilizing financial aid?  If so, what types and how much:

• Institutional Scholarships or Grants (awarded by Cardozo)
• Federal student loans (Stafford, Graduate PLUS), and/or non-federal student loans (institutional and private) 
• Outside Scholarships (3rd party scholarships by an outside agency)

Do you plan on paying out of pocket?

• Full or partial payment each semester
• Monthly payment plan
• Sources of out of pocket payments (personal, family, other, etc.) 

2. Itemize all of your expected expenses.

3. Refer to Cardozo’s current Cost of Attendance (COA) budget, which is designed as an estimated budget expense guide. 

4. Will you have enough funding to cover all of your expected expenses?

5. Look for as many ways to trim, reduce, and eliminate potential (unnecessary) expected expenses. Review our Reduce Your Expenses & Spending section above.

6. Download our Budget Worksheet - determine how much student loan funding you will need to cover your expenses BEFORE school starts!

Tips:

• Make smart budgetary choices.
• Try to maximize all potential avenues of free money (scholarships and grants).  Apply for as many 3rd party scholarships as possible: www.cardozo.yu.edu/scholarships
• If you expect to fund part or all of your education with student loans…borrow wisely!  Only borrow what you (absolutely) need! Keep in mind the long-term implications…what will be the size of your total student loan indebtedness?  How long do you expect it will take you to pay down all of your loans?  How much will your expected monthly loan payments cost?  Refer to our “After School” section below.
• Keep accurate records!

After School:

If you borrow federal student loans to help fund your education, you will enter repayment about six months after graduation (or after the “separation date” – not currently enrolled, or registered for less than 6 credits per semester). Repayment will begin about nine months after graduation for institutional loan (Cardozo-YU Loan) borrowers.

It is important that you have a firm understanding of your total debt by the time you graduate. 

Student loan related questions to consider:

• How much total loan debt do I have? What types of loans did I borrow (federal Stafford, Graduate PLUS, Cardozo YU Loans, Private loans, etc.)? How much loan debt do I have with each loan type? 

Review your Cardozo financial aid account history via Inside-Track & Banner, contact Cardozo’s Office of Student Finance, contact any prior school’s financial aid office for a print-out of your loan history at that school, log into your loan servicer account(s), and visit federal account with the US Department of Education: https://studentaid.gov/h/manage-loans

• What are my repayment options? How much will I be able to afford to repay on a monthly basis?

For federal loan repayment plan options, visit https://studentaid.gov/manage-loans/repayment/plans, visit the “Federal Loan Repayment and Forgiveness Programs” section within this Debt Management site below, log into your loan servicer account(s), complete and attend Exit Counseling by the Department of Education and Cardozo, and contact the Office of Student Finance at Cardozo. 

Utilize various student loan repayment calculators online:

https://studentaid.gov/loan-simulator

https://finaid.org/calculators/

• What if I cannot make my monthly payments? Will I be eligible for any assistance to help pay and possibly reduce my loan repayments? How do I avoid defaulting on my loans?

Visit the Loan Default Prevention section within this Debt Management site below, visit the following websites:

https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief  

https://fsapartners.ed.gov/knowledge-center/topics/default-prevention-resource-information

https://fsapartners.ed.gov/knowledge-center/library/fsa-assessments/2022-11-17/default-prevention-management

https://studentaid.gov/manage-loans/default

• What are my rights and responsibilities as a loan borrower?

Complete and attend the Exit Counseling sessions, contact your loan servicer(s), visit the Loan Repayment and the Loan Default Prevention sections within this Debt Management site below, and contact the Cardozo’s Office of Student Finance.

Before you graduate, you will be required to complete an online Exit Counseling session for your federal loans and institutional loans (for Cardozo YU loan borrowers).  The Exit Counseling session will review in detail your rights and responsibilities as a borrower, your various repayment options, default prevention, and other relevant and important loan information.

The Office of Student Finance offers one-on-one Exit Counseling meetings during students’ final semester before graduation. We also encourage students to contact our office before, during, or after law school to discuss any matters concerning financial aid and student loans.

It is important that you set up a student loan repayment option that you will be able to comfortably afford.  It is necessary that you factor in your expected yearly/monthly income, and deduct other expected costs and living expenses. 

Most students who need student loans, take out federal student loans. Federal student loans are offered by the US Department of Education for eligible students who file an annual FAFSA. These loans are also called Direct Loans, which derives from the William D. Ford Federal Direct Loan Program, which is the loan lending arm of the US Department of Education.

For most eligible students, federal loans are the easiest to obtain and offer the widest range of repayment plans and loan forgiveness programs.

The two federal loans available for eligible graduate students are Stafford Loans and Graduate PLUS loans.

The first step in determining a student’s eligibility for federal loans, would be for the student to file their annual FAFSA. The processed FAFSA will be sent to Cardozo’s Office of Student Finance by the US Department of Education. We will review the student’s FAFSA, set up (package) their financial aid account for the academic year, and then we will send the student a financial aid award notification email. The student would then be able to review their federal loan eligibility details and instructions on accepting / applying for the loans. Information on the federal loans can be found here: www.cardozo.yu.edu/studentloans

Federal Loan Terms:

Stafford Loan:

• Eligibility initially determined by FAFSA
• Receive up to $20,500 per academic year
• Fixed interest rate, which is set every July 1st
• Principal and interest payments deferred while in school
• Unsubsidized – interest accrues for the life of the loan (during school, grace, and repayment)
• 6-month grace following graduation before entering repayment
• Eligible for federal repayment plans and forgiveness programs

Graduate PLUS:

• Eligibility initially determined by FAFSA. An additional credit check is required with the US Department of Education.
• Receive up to the annual cost of attendance, minus any other financial aid.
• Fixed interest rate, which is set every July 1st. Always 1% point higher than annual Stafford loan rate.
• Principal and interest payments deferred while in school
• Unsubsidized – interest accrues for the life of the loan (during school, grace, and repayment)
• 6-month grace following graduation before entering repayment
• Eligible for federal repayment plans and forgiveness programs

Non-Federal Loans:

Non-federal loans include any student loan that is not administered and owned by the US Department of Education. These loans include private student loans and institutional loans. Non-federal loans are ineligible for any federal repayment plan or forgiveness program. Non-federal loans cannot be consolidated or converted into the federal loan program.

Private Loans are offered by various banks and lending institutions. Eligibility for most private loans is determined by a credit check run by the lender. Generally, students need to have good credit and/or may need a co-signer in order to qualify. Loan terms, including interest rates and repayment options, are determined by each lender, and may vary. Bar loans are a type of private loan that 3Ls and recently graduated students may consider borrowing in order to assist with bar prep expenses following graduation.

Institutional Loans are loans administered and owned by the school. At Cardozo, our institutional loans are called Cardozo YU Loans. For more information on our institutional loan program, please visit www.cardozo.yu.edu/studentloans

Student loan borrowers who are about to graduate, withdraw from Cardozo, or fall below half-time status, are required to complete mandatory Exit Counseling.

Exit Counseling is designed to review your rights and responsibilities as a loan borrower, covering loan repayment, default prevention, and providing other important details to assist with practical financial guidance and protections.

During the final semester, Cardozo’s Office of Student Finance will send students a comprehensive Exit Counseling email. The email will direct federal loan borrowers to complete Exit Counseling on the US Department of Education’s website. Institutional loan borrowers will be directed to complete Exit Counseling on Yeshiva University’s loan servicer’s website. Currently, YU’s loan servicer is ECSI.

Exit Counseling needs to be completed BEFORE graduation.

For more information on Exit Counseling, please visit here: https://cardozo.yu.edu/exit

Federal student loan borrowers will be able to select a repayment plan that best works for them. There are currently a variety of federal repayment plans offered to borrowers by the US Department of Education. There are several factors that borrowers should consider when determining which repayment plan to select.

Federal loan borrowers should review and select their repayment plan with their loan servicer at some point during their 6-month grace following graduation (preferably mid-way through the 6-month grace). It’s recommended not to wait until right before the loans enter repayment to select a repayment plan.

Some factors to consider when determining which repayment plan to select:

• Total loan debt
• Employment – Private or Public (pursuing Public Service Loan Forgiveness).
• Salary / income / financial assistance
• Other expenses & financial obligations - rent, food, utilities, savings, retirement, family, etc.
• Lifestyle
• Game plan / financial strategy and planning

Borrowers can change their repayment plan at any time. Borrowers are not locked into one repayment plan or the plan they initially selected. Borrowers can switch between fixed and income-driven repayment plans.

There are no penalties to pre-pay or to make larger payments beyond the required monthly amount. This applies to all repayment plans.

Repayment plans determine the required amount that is due each month. Borrowers are free to make voluntary payments above and beyond the required amount, and can be aggressive towards paying down their loan balance. For example, if a borrower is enrolled in a 25-year extended payment plan, they can pay down their loan in 5, 8, 12, etc., years, without penalty. The borrower is not obligated to remain in the repayment plan for the full 25 years if they choose to make voluntary payments above their required monthly payment amounts.

Keep in mind – generally, the longer it takes a borrower to repay their loans, the more they will end up paying in the long run due to interest. The quicker a borrower can repay, the less interest will accrue, and the less they will end up paying overall.

To review various repayment strategies, see below under the Repayment Strategies for Private Sector and Public Service Employees section.

Currently Available Federal Repayment Plans:

Fixed Plans – based on the size of the loan debt, interest rates, and the length of the repayment plan.

• Standard: 10 years
• Extended: up to 25 years
• Graduated: 10 – 25 years

Income Driven Repayment Plans – based on a percentage of a borrower’s income. IDR plans are designed to give borrowers with high federal loan debt relative to their income, more affordable repayment options compared to the fixed plans. IDR plans can be used by borrowers employed in the private and public sector. For borrowers in the private sector, if they remain in IDR for up to 20-25 years, their remaining federal loan balance will be forgiven, which is taxable. For borrowers in the public sector who are pursuing Public Service Loan Forgiveness (details below), IDR is the required repayment plan, except for the Standard repayment in specific instances.

• Saving on a Valuable Education (SAVE): 20 - 25 years, 5% - 10% of  annual discretionary income
• Income Based Repayment (IBR): 10% - 15% of annual discretionary income
• Pay As You Earn (PAYE): 20 yeas, 10% of annual discretionary income
• Income Contingent Repayment (ICR): 25 years, 20% of annual discretionary income or what you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income

For more information on federal repayment plans, please visit: https://studentaid.gov/manage-loans/repayment/plans

Student Loan Repayment Calculators:

https://studentaid.gov/loan-simulator

https://finaid.org/calculators/

https://studentloanhero.com/calculators/  

https://www.accesslex.org/tools-and-resources/student-loan-calculator

Loan borrowers may be able to minimize and reduce their loan debt through various forgiveness programs. Generally, most loan forgiveness programs are linked to employment in the public sector. However, private employers may offer benefits to employees that includes contributions towards student loan debt. Be sure to inquire with your employer (public or private) if they offer benefit programs to assist with student loan debt.

Currently, the most robust loan forgiveness program available is the federal Public Service Loan Forgiveness (PSLF) program. Signed into law in 2007 and implemented in 2009, PSLF will forgive a borrower’s remaining federal Direct Loan balance, tax-free, after the borrower makes 120 payments (using IDR), over the course of at least 10 years, while working full-time, in a qualified public sector job. PSLF only applies to federal Direct Loans. Non-federal loans (private, institutional, and state) do not qualify!

PSLF has very specific qualifying terms. An eligible federal loan borrower has to meet ALL of the program’s qualifying terms in order to receive loan forgiveness. It’s extremely important for borrowers who are pursuing PSLF to verify that they are qualifying over the course of the 10 years. Do not assume! Do not wait until the end of the 10-year period to verify. Borrowers need to be proactive with determining their potential eligibility before embarking.

Over the last couple of years, the Department of Education has created online tools, such as the “PSLF Help Tool” to assist borrowers with the PSLF process.

For detailed information on PSLF, including the program’s qualifying criteria, FAQs, how to apply, and how the program works overall, please visit: https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service

PSLF Help Tool: https://studentaid.gov/pslf/

In addition to PSLF, there are other loan forgiveness programs available that borrowers may be able to utilize. Please note, some loan forgiveness programs will allow borrowers to be enrolled in multiple forgiveness programs, and other programs will not. Do not assume either way. Double check and verify. If enrolling in one forgiveness plan disqualifies a borrower from another plan, then it is incumbent on the borrower to carefully review this information and make an informed decision prior to enrolling.

Additional forgiveness programs and resources (not a complete list):

NYS District Attorney and Indigent Legal Services Attorney Loan Forgiveness (DALF) Program

John. R. Justice (JRJ) Program

Department of Justice – Attorney Student Loan Repayment Program

Herbert. S Garten Loan Repayment Assistance Program

State Loan Repayment Assistance Programs

Student Loan Repayment and Forgiveness Resources

Cardozo’s Laurie M. Tisch Loan Repayment Assistance Program (LRAP) is designed to help Cardozo’s graduates who have chosen to pursue careers in public service by providing “forgivable loans” to assist them in overcoming their educational debt.  Recipients of this award use these funds to help pay down their student loans.

For details, please visit www.cardozo.yu.edu/lrap

Borrowers who work in the private sector may consider applying a few strategies when repaying their student loans. Always check with your employer to see if they offer a student loan repayment benefits program. Since most loan forgiveness and assistance programs are only applicable to public sector employees, you will likely be responsible for paying down your student loan balance in full. How long this takes you depends on several factors: Salary, amount of loan debt, expenses, lifestyle, etc. Setting short- and long-term financial goals will be beneficial professionally and personally.

If you graduate with high federal student loan debt relative to your income, you may need to select a federal repayment plan the provides you with a more manageable and affordable monthly payment plan. For example, if you select an Extended 25-year repayment plan, the monthly payment amount would be lower than the Standard 10-year repayment plan. If you only make the minimum monthly payment over the course of the full 25 years, you will end up repaying approximately 2 times what you originally borrowed, due to interest. However, you can select a 25-year repayment plan, and make additional voluntary payments in addition to your requirement monthly payments. If you have the financial ability to increase your voluntary payments, you may be able to pay down your loan balance quicker than the allotted 25 years, and pay less overall, avoiding additional interest. In this scenario, you will receive the benefit of a lower required monthly payment and the flexibility to make voluntary payments are you own pace.

Borrowers with the financial means, can aggressively pay down their student loan debt regardless of their repayment plan. For example, a borrower enrolled in a Standard 10-year plan, can pay down their debt in 3 or 5 years, etc. A borrower enrolled in Pay As You Earn, can also pay down their debt in 3 or 5 years, etc.

Federal loan borrowers who work in the public sector and who are pursuing PSLF, should carefully consider their repayment strategy. The goal with this approach would be for the borrower to make the minimum required monthly payments under an income driven repayment plan, in order to maximize their loan forgiveness under PSLF and any other available forgiveness or assistance program. Making additional voluntary payments above the required monthly payments, would lessen the amount forgiven under PSLF. If borrowers only make the minimum required monthly loan payments while pursing PLSF, and then stop pursuing PSLF (ex, switch employment to the private sector), borrowers may end up paying more towards their loan debt due to the unpaid interest. Borrowers may need to make the appropriate adjustments to their repayment plan and strategy due to changes in employment, income, and/or other factors. In addition to enrolling in an IDR plan while pursuing PSLF over the course of 10 years, borrowers should apply for other available loan forgiveness and assistance programs, such as Cardozo’s LRAP and the NY State District Attorney and Indigent Legal Services Program. Borrowers may be able to take advantage of multiple forgiveness and assistance programs. It’s recommended that eligible borrowers take full advantage of these available programs.

Defaulting on a student loan occurs when…

• You do not repay the loan as agreed
• You fail to meet your other responsibilities as stated in the promissory note(s)

Consequences of Default:

• U.S. Department of Education can declare that the entire balance and accrued interest on your loan is due immediately
• Wages can be garnished
• Eligibility for deferments will be lost
• Eligibility for federal student assistance will be lost
• Account can be turned over for collection
• IRS can withhold federal/state income tax refunds
• Total debt can be increased by late fees, additional interest, court costs, collection fees, attorney’s fees, and other costs
• Federal government can take legal action against you
• Credit rating can be damaged for at least seven years
• Eligibility to obtain/maintain professional license(s) can be lost

Managing your Loans – How to Prevent Defaulting on Your Loans:

• Meet all of your borrower responsibilities
• Understand loan terms and conditions
• Do not ignore mail from loan holder/servicer(s)
• Promptly report ANY and ALL changes to loan holder/servicer(s)
• Request deferments/forbearance (as needed)
• Keep accurate, well-organized records
• Make payments on time
  • This will enhance your chances to qualify for on-time benefits
  • This will help you maintain or improve credit record
• When paying more than is due:
  • Verify where payment should be mailed
  • Apply additional payment to principal, if permitted 
  • Include written explanation 
  • Confirm payment was applied as intended with loan holder/servicer or by checking next billing statement

What if You Can Not Make Your Monthly Payment(s)?

Please contact your loan servicer(s) if you cannot make even one monthly payment!   If your payment is going to be delayed, or if it is going to be less than the minimum requirement, you will also need to contact your loan servicer(s).

If you cannot make your loan payments for reasons pertaining to potential economic hardship, you may be able to change your repayment plan, enroll in an Income Driven Repayment plan at $0 per month, or set up a deferment or forbearance by contacting your lender(s) directly! 

Deferment / Forbearance – temporary postponement or reduction of payments

• Qualifying for Deferment: In-School (degree-seeking program enrolled at least 6 credits per semester), Unemployment, Military, Economic Hardship.
• Qualifying for Forbearance: If you are not eligible for deferment, you might qualify for Forbearance if you are experiencing financial difficulty.  Unlike deferment, whether your loans are subsidized or unsubsidized, interest accrues, and you’re responsible for repaying it!  Your loan holder can grant forbearance in intervals of up to 12 months at a time for up to 3 years. You have to apply to your loan servicer for forbearance, and you must continue to make payments until you've been notified your forbearance has been granted.

Actively entering into deferment or forbearance with your servicer(s) will help prevent you from entering into default.  

If your monthly loan payments are too high, you may be able to adjust your repayment plan(s). You may qualify for an Income Driven Repayment plan or for a longer extended repayment option, which might help lower your monthly payment.  Please explore all of your potential options.  Contact your loan servicer(s) if you have any questions.

Resources



Helpful Default Prevention Tips and Information:

https://studentaid.gov/manage-loans/default/avoid



https://studentaid.gov/manage-loans/default

https://fsapartners.ed.gov/knowledge-center/library/fsa-assessments/2022-11-17/default-prevention-management

https://finaid.org/loans/default/

https://www.consumerfinance.gov/ask-cfpb/what-happens-if-i-default-on-a-federal-student-loan-en-663/

https://www.studentloanborrowerassistance.org/default-and-collections/consequences-of-default-federal/