(MONEY Magazine) – As a 21-year-old rookie with the Milwaukee police force a dozen years ago, Lauri Schwefel used to accept male officers' off-color humor and sexual innuendos as part of the job. ''I'd be with a bunch of the guys, and an officer would come over, start telling dirty jokes and unzip his zipper to faze me,'' recalls the 33-year-old police sergeant. ''Then there were the huggers, like the officer who constantly put his arm around me and let his fingers brush my breast. When you work in a male-dominated environment, you either quit or you put up and shut up -- and that's what I did.'' Though the 1,855-member force remains 90% male, the jokers and the huggers don't bother the women so much these days -- in part because Schwefel and seven other female officers have risen to the rank of sergeant or above. But Schwefel has since gone on to make her mark on the department in another way. In June she collected a $72,000 out-of-court settlement in a sex discrimination lawsuit that -- while it had nothing to do with the recently hot topic of sexual harassment -- did allege gender bias in police training and promotion as well as a departmental witch hunt directed against her for crying foul. Her award comes at a time when American women are speaking out in greater numbers against sexual bias of all types. The Equal Employment Opportunity Commission (EEOC), the federal agency that fights job discrimination, logged 33,092 sex discrimination complaints last year, up 15% since 1980, and 5,572 charges of sexual harassment compared with a mere 73 a decade ago. Formal complaints are only the tip of the iceberg: fully 51% of working women say they've been harassed at some time during their careers. The harassment issue came into sharp focus in October, of course, when Oklahoma University law professor Anita Hill accused then-Supreme Court nominee Clarence Thomas -- former chairman of the EEOC -- of sexually harassing her a decade earlier. Schwefel was among the millions of Americans who saw Thomas defend himself in televised hearings. And like many of the senators who later voted narrowly to confirm Thomas' nomination 52-48, Schwefel found the case puzzling: ''I don't believe Anita Hill was lying,'' she says. ''But if the harassment was as bad as she says, why did she wait 10 years to speak up? A woman shouldn't hesitate to come forward with that kind of complaint.'' Yet Schwefel herself hesitated. Not only did she put up with sexual hazing as a rookie; she also waited as long as seven years to complain about some of the instances of job discrimination she felt she'd suffered -- even though she'd filed a successful bias complaint against another employer at age 19. ''I was afraid of not being one of the boys,'' she explains. Justifiably so. Her four-year battle split the precinct, jeopardized her career, isolated her from fellow officers and left her emotionally and financially drained -- all for the $72,000 award that, after fees and debts, melted to just $25,000. Still, she and others felt the sacrifice was worth it. Says officer Kathleen Gorlewski, 36, a friend and coworker: ''Her suit helped make Milwaukee a better place for women officers to work.'' With the legal battle behind her, Schwefel now needs financial advice. Her $25,000 net, paid last summer just before the department coincidentally came under additional criticism for its delayed arrest of serial killer Jeffrey Dahmer, will help her take a three-year leave from her $40,000-a-year job to attend law school at the University of Wisconsin at Madison. But with classes starting next September, Schwefel needs to raise additional cash so she can earn her degree and, she hopes, return to work later as a police department lawyer. Law enforcement had been a dream for the animated, often theatrical Schwefel ever since she left home at the age of 17 after conflicts with her father. The oldest of four children of a farmer and his homemaker wife in Watertown, Wis., Schwefel came to Milwaukee upon graduating from high school in 1975 and enrolled in police science at Waukesha County Technical Institute, graduating in 1980. It was during her student days that Schwefel first attacked sexual bias. In 1977, she filed a sex discrimination complaint with the Wisconsin Equal Rights Division (ERD) -- the state equivalent of the EEOC -- against a sheet-music publishing firm that had laid her off from a sales job. The ERD ruled that sexual bias was probably to blame for the fact that Schwefel hadn't been promoted, but that she lost her job simply because sales were off. No damages were asked or awarded. ''I just wanted to prove my point,'' she says. In 1979, Schwefel joined the Milwaukee PD, ''making $17,000 a year, counting overtime, which was good money then,'' she remembers. She lived on the cheap, sharing a $200-a-month apartment with roommates, spending no more than $1,800 a year on clothes, and religiously saving her overtime earnings. She also kept up her studies part time, earning a bachelor's degree in criminology and law from Marquette University and -- soon, she hopes -- a master's in labor relations at the University of Wisconsin at Milwaukee. With her income nearing $30,000 in 1985, Schwefel emptied her savings to put down $20,000 on an $86,000 three-bedroom ranch house in the tranquil southwest end of town. She now pays $630 a month on a 30-year adjustable loan (current rate: 9.4%). Still, good pay and a nice home did not make up for a growing feeling that she was being slighted at work. This time the complaints went beyond what she'd suffered as a rookie, she says, ''and I started keeping track of them.'' The chief grievances: 1) that she was assigned to foot patrol more often than her male peers, who frequently drew squad-car duty; 2) that locker and bathroom facilities for the precinct's half-dozen women were inadequate; and 3) that she was not allowed to go to several training seminars that men attended. Her resentment grew when she took these concerns to the chief of police and, a few months later, was slapped with a three-day suspension for violating a rule against holding an off-duty job without permission -- a move she felt was intended to punish her for making waves. (Schwefel admits she was tending bar while off duty but maintains she did it without pay for friends.) She blames work-induced stress for a miscarriage in the summer of 1986, when she lost a baby that she and her boyfriend, another police officer, were expecting. By that time, Schwefel had resolved to fight what she saw as departmental bias. She kept quiet long enough, though, to take the sergeant's exam, beating out 456 fellow officers to earn the second highest score. In January 1987 she was among five women who became the department's first female sergeants. Just three months later, she filed a sex discrimination complaint with the state ERD. Besides reiterating her basic grievances, the 14-point claim composed with the help of local civil rights attorney Barbara Zack Quindel argued that Schwefel had suffered ''a continuing chain of discriminatory actions against me based on sex as well as upon my attempts to rectify this discrimination.'' The police department denied all charges. The battle escalated in July, when the Internal Affairs Division told her it was investigating charges she'd stopped off at home while on duty. Quindel promptly lodged a protest with the state ERD. She also filed a federal lawsuit charging that the police were conducting a ''witch hunt'' aimed at discrediting Schwefel and intimidating women officers from complaining. The suit asked the court to halt the investigation and to award damages and attorney's fees in amounts to be set by the judge. While both sides scrambled to submit evidence in the pending state and federal cases, police investigators concluded that Schwefel had not gone home during work after all. Nevertheless, the department launched four more probes of her over the next six months. Two of them led to reprimands (one for spreading gossip about co-workers, another for unwittingly letting a burglary suspect go, after stopping him for a traffic violation). In a third, she was cleared of allegedly warning a fellow officer that he was the subject of a separate Internal Affairs inquiry. But a fourth charge -- that Schwefel had broken a departmental rule against bad-mouthing fellow officers -- brought her close to disgrace. ''One day in November 1987,'' says Schwefel, ''three sergeants showed up at my door. They handed me a paper saying the department had found me guilty of calling male cops drunks and druggies in a conversation overheard at a restaurant. They told me I was busted to patrol officer.'' Schwefel says she was merely quoting -- and deploring -- a newspaper series critical of the force. ''I was so upset by the demotion that my boyfriend took my gun away for fear I'd shoot myself.'' Schwefel immediately appealed the demotion to the civilian Fire and Police Commission, and added it to her state and federal complaints. And in January 1988 the commission ordered her reinstated, finding insufficient evidence that she'd discredited fellow cops. The city paid her $2,500 for attorney's fees (her union chipped in another $1,500) plus $300 back salary -- the difference between her pay as officer and sergeant. Two months later, the state ERD upheld one of her original discrimination charges, though it dismissed the other 13 because they either weren't substantiated or had not been filed soon enough -- within 300 days of the alleged incidents. Specifically, the ERD said that a personnel report on her had been unfairly critical, and the department expunged it from her record. A year later, the ERD ruled that the internal investigations -- including the one that led to demotion -- had indeed been retaliatory. Finally, last March, a month before the federal suit was to go to trial, the city offered to settle. ''It seemed likely that a jury could call the demotion excessive punishment,'' explains assistant city attorney Bruce Schrimpf, ''and then the city would have been looking at $100,000 in legal fees and damages of $70,000 to $100,000 more.'' Schwefel agreed to drop all claims in return for $72,000. The award left her feeling vindicated but exhausted. ''I had been blacklisted,'' Schwefel says. ''Some of my fellow officers wouldn't talk to me. I had risked my career, and put my personal life on hold for four years. I would never do it again.'' Quindel's fee ate 56%, or $40,000, of the award -- a bite that is not uncommon in civil rights cases. ''Barbara put in 500 hours on my case, even though she knew I would never get big damages,'' says Schwefel, who adds that she sees the 43-year-old Quindel as a role model. Schwefel used another $7,000 of the settlement to pay debts for her sister, an unmarried mother living in Watertown. Now Schwefel hopes to use the remaining $25,000 to help pay her annual $10,000 living expenses and $3,478 tuition at the University of Wisconsin law school in Madison. Aside from $37,600 in home equity, her only assets are $28,000 -- including the award -- now earning 5.25% a year in a credit union savings account; $3,000 invested in Kemper Total Return stock fund (up 25% this year); a pension currently worth $30,000; and another $30,000 in a tax- deferred retirement plan, invested in guaranteed investment contracts (GICs) earning 8%, to which she contributes 10% of her salary. While studying law, Schwefel plans to help support herself by earning $13,000 each summer doing part-time police duty for the Milwaukee PD. She also hopes to rent her house to cover her mortgage. That would leave her owing only $360 a month on a $10,000, three-year home-equity loan that she took out at 11.9% last June. The money went to buy a $15,000 sporty white '91 Pontiac Grand Prix that she tools around in with her new boyfriend, officer Bill Behling, 44. As for the Milwaukee PD, Schwefel finds it much more female-friendly now. ''The guys sometimes still joke about sex,'' she says, ''but the really offensive stuff has stopped.'' The department has tried to put the Schwefel case behind it by beefing up the gender-consciousness portion of the 50 hours of so-called sensitivity training that all officers undergo. Still, jokes Lieut. Tony Bacich, who stayed friendly with both sides during the dispute, ''Everybody feels a little nervous because we're in uncharted waters. Pretty soon we'll be talking to the female officers in sign.'' If so, they'd better start practicing. Confides one of Schwefel's acquaintances: ''Lauri once told me that her real aim is to be the Milwaukee chief of police someday.''

BOX: THE ADVICE

The Problem: Raising cash for law school

The Solutions: Refinance your home and car, stop deferring income, and shift savings into higher-yielding accounts.

At MONEY's invitation, Milwaukee certified financial planner Michele Cody and chartered financial consultant Jeffrey Kowal offered the following advice: Restructure debt. To free up more cash, Schwefel should combine her mortgage and home-equity loan into a single $58,400, 30-year mortgage at 9.125%. That would cut her total $990 monthly outlay to only $475, saving $4,635 -- excluding closing costs -- in the nine months before school starts. Collect a full salary. Schwefel can add another $3,000 to her take-home pay over that period by cutting off contributions to her retirement account. She can't withdraw money from the fund without paying a 10% penalty, but she should make no more deposits to the account for now. Open a money-market account. She should bank the $7,635 she raises through the two strategies above in a money-market fund, where it will be at hand when school begins. She should also move her $25,000 award into the fund, keeping just $3,000 in her credit union account for emergencies. Any further savings should be invested in a stock mutual fund like Nicholas II (no load; 414-272-6133), up 41.7% in the past 36 months. Change from GICs to equities. Cody said Schwefel should switch her tax- deferred account from low-yielding GICs to her plan's equity fund, since she won't need the money for years and can afford to take some risk. Kowal agreed, but advised a more cautious fifty-fifty equity-GIC mix. Two months later, Schwefel had taken most of the suggestions. ''I'm shopping for a new mortgage,'' she said. ''I quit contributing to my tax-deferred retirement account, and I shifted it from GICs to our equity index fund.'' But she does not plan to roll her home-equity loan into the refinanced mortgage because, she said, ''I want to pay off the car soon, not over 30 years.'' Now she's hard at work on the thesis for her master's degree. ''My title,'' she adds with a grin, ''is 'The Retention and Attrition of Female Police Officers.' ''

BOX: The cost of victory

Schwefel's $72,000 award, tax-free because it was not for lost wages, shrank to only $25,000 after payment of attorney's fees and a sister's debts.

INCOME Lawsuit settlement $72,000 Salary 40,000 Other 3,210 Withdrawal from savings 2,816 TOTAL $118,026

OUTGO Lawyer's fees $40,000 Savings 26,300 Taxes 11,960 Mortgage 7,560 Payment for sister's debt 7,000 Car purchase and expenses 6,960 Food, clothes and tuition 5,900 Utilities and repairs 4,200 Miscellaneous 4,146 Deposit to retirement plan 4,000 TOTAL $118,026

ASSETS House $86,000 Pension, retirement plan 60,000 Savings 28,000 Personal property 18,000 Mutual fund 3,000 Checking account, savings bonds 1,000 TOTAL $196,000

LIABILITIES Mortgage $48,400 Home-equity loan 10,000 TOTAL $58,400 NET WORTH $137,600