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Financial Aid for Law School

Financial Aid Options

Scholarships and Grants

A scholarship or grant is an award that does not have to be repaid. It may be given on the basis of need or merit or both. Most scholarships are conferred by individual law schools. Some organizations may also have scholarships to offer. Among them are local bar associations; fraternities, sororities, and other social clubs; religious or business organizations; and the US Department of Veterans Affairs. You will have to take the initiative in researching these possible scholarship resources. A number of companies offer tuition reimbursement benefits to their employees and to their employees’ dependents as well.

Federal Loans

(Subsidized) Federal Stafford and Ford Federal Direct Loan. Up to $8,500 a year is available in subsidized Federal Stafford or Ford Federal Direct loans to students who meet the need criteria.* Interest is paid by the federal government while you are enrolled in school at least half-time. You must begin repaying the loan six months after you graduate, withdraw, or drop below half-time. The interest rate for the subsidized Stafford or Ford Federal Direct loan is 6.8 percent. You can obtain an application from any lender that participates in the federal loan program, or from any law school.
(Unsubsidized) Federal Stafford and Ford Federal Direct Loan. In combination with the subsidized loan, a student may borrow up to a combined total of $20,500 in subsidized and unsubsidized loans.* The amount the student receives in the subsidized loan is deducted from the $20,500 in order to determine eligibility for the unsubsidized loan (for example, if the student is only eligible for $3,000 in subsidized loans, he or she could receive $17,500 in unsubsidized loans). The interest rate for the unsubsidized Stafford or Ford Federal Direct loan is 6.8 percent. Interest starts accruing as soon as you receive the funds.
Federal Perkins Loan. This loan is available to students at some schools. Each student's award is determined by the school based on information obtained from the FAFSA. The maximum annual loan is $6,000.
Graduate PLUS Loans for Law Students. Students with an absence of bad credit may be eligible to borrow a Graduate PLUS loan. The Graduate PLUS is federally guaranteed and the interest rate is subsidized. Interest accrues while the student is in school, and repayment begins immediately. The interest rate is 7.9 percent if you borrow from the Ford Federal Direct loan program and 8.5 percent if you borrow from any other lender. The interest rate is fixed for the life of the loan. Forbearance is available while the student is in school. Many students who have good credit are choosing Graduate PLUS instead of private loans.

Private

There are a number of private loan programs available to credit-worthy borrowers. Many of these programs allow you to borrow federal as well as private loans, which may help you keep track of your loan portfolio. Many also offer phone-in or online application for their private and federal loans. Some lenders make available postgraduate loans for bar-review study. Eligibility for these bar loans is based on the borrower's credit history and the lending institution's willingness to lend.

The terms and conditions of these programs vary greatly. Pay careful attention to the explanations found in loan application brochures and consumer information. You can also contact the individual programs or visit their websites for further details.

Federal Work-Study

Federal work-study is a program that provides funding for students to work part time during the school year and full time during the summer months. Students sometimes work on campus in a variety of settings or in off-campus nonprofit agencies. Additional information is available from any law school financial aid office. Not all schools participate in the federal work-study program.

Credit

Graduate PLUS and private loans are approved on the basis of your credit. Lenders will analyze your credit report before approving a private loan. Most offer prequalification services on the Internet or by phone. If you have a poor credit history, you may be denied a loan. If there is a mistake on your credit report—and there are often mistakes—you will want adequate time to correct the error. It is essential to clear up errors or other discrepancies before you apply for a private or Graduate PLUS loan.

You may want to obtain a copy of your credit report so that you can track and clear up any problems. You can order your free copy from one of the major credit reporting agencies by calling 1.877.322.8228, or you can go to www.annualcreditreport.com. You may also mail a request to Annual Credit Report Request Service, PO Box 105283, Atlanta, GA 30348-5283.

* NOTE: All figures and calculations are based on current interest rates, loan terms, and fees, and are subject to change.