Loans and Literacy
In December, the Federal Reserve Bank reported that student loan debt had increased to $956 billion, more than auto loan debt or credit card debt. For many, it was the culminating benchmark in the ongoing student loan crisis which sees (as reported by FinAid) the total student loan debt increasing at an overwhelming rate of $2,853.88 per second.
The conundrum for need based institutions like Yale Law School is that student loans also serve as a key element of access for many students. Loans are an essential part of our students’ total financial aid support packages which ultimately allow them the means to attend YLS.
What we must do then to respond to this debt vs. need loan paradox is to make certain that our students are what we term “savvy financial aid consumers”. It is our obligation to support our students while enrolled and after graduation in making the best financial choices about their borrowing and repayment.
To that end, we have extended the outreach of the Financial Aid Office to include an essential financial literacy initiative. As part of the program, our popular Financial Literacy Lunch Series provides interactive workshops on a variety of financial management topics presented by experts in the field. Programs targeted to our 1L and 2L students focus on effective budgeting, strategies to minimize loan borrowing and the benefits of maintaining good credit. Workshops for our 3Ls assist with their transition from YLS with sessions focused on choosing the right federal loan repayment plan specific to their needs, effective participation in our own loan repayment program, COAP, and an overview of “real world” finances (retirement, insurance, investment options). And our workshops refute the old financial adage that there is “no such thing as a free lunch” by including pizza (and dessert) for all in attendance. (YLS students know that you never turn down a free food opportunity!). You can find our full slate of current spring 2013 term workshops on our Financial Aid Calendar.
Another key component of our financial literacy efforts is the delivery of one-on-one counseling to our students. Because of Yale Law School’s small enrollment size, we have the ability to work with students on a very individualized basis to develop both short term (living on a budget while in school) and long term (multi year loan repayment) plans. In particular, we offer our 3L students a comprehensive “exit” counseling session where their entire loan ”portfolio” is reviewed, their projected loan payments under the various federal repayment plans are compared, and their estimated COAP support is graphed over a 10 year eligibility period. 3Ls can also take advantage of a complimentary consultation with a financial planner to discuss their broader fiscal strategies beyond their loan repayment.
Our financial literacy support also extends beyond our currently enrolled students. Our office naturally keeps in close contact with graduated YLS students through the 10 year eligibility of the COAP program, but all alumni are welcome to reach out to our office any time. Perhaps a life circumstance has changed which allows a faster repayment of your loans? Or you would like to know the best way to restructure your loan repayment given new found family commitment? Or you just need assistance negotiating the ever evolving federal repayment programs (like the new federal Pay As You Earn program which just began in December). We encourage alums, no matter how many years out from YLS, to use our office for support and advice on any issues related to their law loans.
Ultimately, the Financial Aid Office’s commitment to comprehensive financial literacy allows our YLS students (and alums) to not only manage their student loan debt effectively, but also build long range financial plans which support their goals and aspirations.