Smart financial planning moves for incoming and returning law students

If you started or returned to law school this fall, the financial stakes are higher than ever. Effective planning is now essential for financial persistence throughout your law program.

The latest American Bar Association Young Lawyers Division (ABA YLD) Law Student Loan Debt Survey highlights the significant impact of student debt on graduates’ lives. Most young lawyers who responded say debt changed their career plans and delayed major milestones, and many still report high financial stress a year after payments resumed.

Now add in upcoming changes under the One Big Beautiful Bill Act (OBBBA), and the ground is quickly shifting under current and future students.

If you’re concerned about your borrowing plan and upcoming policy changes, here are three practical planning moves you can take this semester to stay ahead:

1. Build a semester-specific budget

A budget is still the tried-and-true way to plan, monitor and adjust your spending over a set period. Advances in technology can help, but at the end of the day a simple spreadsheet or pen and paper will still do the trick.

Your budget can be prepared for the upcoming year, term and/or month. The risk in only building annual budgets is that they hide the very real “lumpiness” of law school cash flow — tuition due dates, housing deposits, technology and material spikes and the timing of aid disbursements. A semester view forces a bit more precision, and a monthly budget based on the semester view is the best way to monitor and control where your finite cash is going.

As always, start by listing all sources of “income” for the period you’re budgeting for, including savings, scholarships, grants, stipends and any student-loan refund you expect after tuition/fees are paid. Then map expenses into at least three buckets: fixed (rent, utilities, insurance, minimum debt payments, any savings for bar expenses and emergencies), variable (food, transportation, subscriptions, etc.), and irregular (moving, school/networking events, interview travel).

How to build a realistic, effective law school budget 

As you get a handle on which funds will be available to you throughout the year, try to integrate these proven habits into your budgeting process:

• Front-load realities: Books, software, laptop, clinic gear and first/last month’s rent often hit before aid lands. If you only budget annually, you’ll miss these immediate cash demands. Be honest about the semester’s upfront financial demands and set yourself up for success.
• Get granular: Break your budget into weekly checkpoints to catch spending drift before it becomes a crisis. Review your spending every Saturday or Sunday and adjust upcoming weeks as needed. Consider using budgeting apps tailored to students or a simple spreadsheet if that’s more your style — the format matters less than consistency.
• Right-size your lifestyle early on: Set guardrails (weekly grocery cap, rideshare limits, roommate arrangements, etc.) now — before the semester speeds up and small leaks become big ones. Shelter, food and transportation are often the three largest living expenses. So, making sustainable housing decisions, opting for cost effective transportation solutions, and building meal plans are steps that translate to big savings over an academic year.
• Get support: Share your plan with a trusted friend or mentor who can help you stick to it. There are even free coaching services available to help you build and check in on your budget.

2. Sync spending to disbursement dates

A common 1L/2L stressor is the gap between the day rent is due and the day aid disburses. Without a defined spending plan for timing issues like these and others, you may use up your available funds early in the semester and need to request a budget appeal from Financial Aid, which can create uncertainty about how to cover expenses for the remainder of the term.

The fix is simple, but you must be proactive:

1. Get the schedule: Ask your Financial Aid office for the exact disbursement dates and whether the school holds any funds before issuing refunds. Mark tuition due, refund issued and refund received on your calendar.
2. Bridge the gap: If rent is due August 1 and your refund arrives August 22, identify how you’ll cover those 21 days (savings from summer work, a short-term loan from family, a temporary on-campus job or deliberately lower spending in July).
3. Time big purchases: Beyond rent, plan to buy must-have items (e.g., required tech) in the window you can pay for them without carrying high-interest card balances.
4. Automate good decisions: Set up auto-pay for utilities and transportation passes the week your refund hits; move a set amount to a “bar-prep/summer” sinking fund each month.
5. Stretch your refund: To ensure your refund will last as long as you need it to, divide your disbursements by 4.5 to cover the full academic year or six to have some left for the summer in case you don’t secure a paid position. Identify whether your allocated amount is enough based on your budget and explore options for increasing your refund and decreasing your expenses if not.

Listing term income first and then mapping expenses to the term’s rhythm is exactly the habit that prevents “early-semester panic.”

3. Know your loans cold — and how OBBBA may change your options

Federal student loans come with several bells and whistles that private loans do not have, such as income-driven repayment options and access to Public Service Loan Forgiveness. So, knowing the types of loans you have and projecting your monthly payments after graduation, based on available options, is an important step to make sure you’re not having to make career pivoting decisions just to service your debt.

First, here are three recent OBBBA-related policy headlines every law student should have on their radar:

Graduate PLUS will be eliminated for new borrowers beginning July 1, 2026.
Returning students with loans disbursed before that date will have limited legacy access to Grad PLUS, but 1Ls starting after the cutoff should plan on no Grad PLUS.

Annual and aggregate caps on law school federal student loan borrowing will be set to $50,000 and $200,000, respectively.
Practically, this means a bigger share of any funding gap may have to come from savings, scholarships, work or — carefully evaluated — private loans.

Repayment rules are being re-tooled.
OBBBA phases out several legacy repayment plans and streamlines them moving forward. You will still have fixed and income-driven options to pay your federal loans after graduation, but options will be pared down after the sunsetting of several plans in July 2028.

To offset the potential impacts to your plan, stay informed about relevant changes by consulting official sources and speaking with a knowledgeable financial aid professional or coach, then:

• Borrow only what you need based on your budget, rather than the maximum allowed.
• Plan ahead for repayment by using loan calculators, taking into account current private loan repayment terms if necessary.
• Consider paying interest while in school to minimize future debt compounding.
• Learn about credit best practices and optimize your credit profile for private loan borrowing needs, if applicable.
• Project your starting salary using compensation statistics or informational interviews to determine how much of your salary may be spoken for by student loan obligations.

Why planning matters now more than ever 

The combination of rising costs, capped federal borrowing and changes to repayment plans means today’s law students have a smaller margin for error. The ABA’s newest survey underscores the stakes: Debt doesn’t just affect numbers on a spreadsheet; it shapes careers, savings and well-being. A semester-specific budget, a cash flow plan synced to real disbursement dates, and a working mastery of your loan terms are the difference between feeling reactive and staying professionally focused.

If you do those three things consistently, you’ll graduate with fewer surprises, a clearer path to repayment, and more freedom to choose the work that supports your vision for a fulfilling legal career.

Read more:

• ABA Young Lawyers Division 2024 Student Debt Survey: Law Student Loan Debt Surveys

• AccessLex Institute’s Financial Transition Tips for Incoming Law Students

• OBBBA implementation and student aid specifics: One Big Beautiful Bill Act Updates | Federal Student Aid

• AccessLex Institute’s Student Aid Policy and Action Center

Derek Brainard, MBA, CFP®, is the Director of Financial Education at AccessLex Institute and a longtime financial educator to law students and graduates.

Disclaimer: The financial strategies and resources discussed above are intended for informational purposes only and should not be construed as personalized financial advice. Individual circumstances and regulatory changes may affect the applicability of these recommendations. For guidance tailored to your situation, consult a financial aid professional or licensed advisor.