Though many law school applicants know exactly what they want to do – and how much they hope to make – after they earn a JD, a surprising number apply to school without thinking about how they’ll pay for this expensive degree. While some students do foot the entire bill themselves or receive scholarship support from the school or an outside institution, the vast majority of law students borrow funds to cover their tuition and living expenses. With this in mind, we wanted to cover some very basic information on loans for the benefit of both recent admits and applicants for Fall 2011.
The primary source of funding for U.S.-based applicants will be federal loans or alternative education loans. The main federal loans, available to U.S. citizens or permanent residents, are the Federal Stafford Loan (subsidized or unsubsidized), the Federal Perkins Loan and the GradPLUS Loan. Full-time students can borrow as much as $20,500/year through the Federal Stafford loan program. Perkins Loans are low-interest (5 percent) loans with a maximum annual loan amount of $8,000/year for graduate students. The Grad PLUS Loan can be used to pay for the total cost of education less minus aid you’ve already been awarded. Those interested in applying for federal student aid should check out the Free Application for Federal Student Aid (FAFSA). When federal loans are not enough, private loans can help bridge the gap in education costs. Students might contact their local bank or look into lender programs, such as SallieMae, Access Group or GradLoans, for details on borrowing eligibility.
International students are not eligible for federal loans, but may consider private loans as a financing option. The International Student Loan Program (ISLP), for instance, offers a credit-based loan to international students who are looking to finance their education in the U.S. However, as with most private loans, this loan requires a U.S. citizen or permanent resident to co-sign. International students can also visit International Education Financial Aid (IEFA) to search for funds (as can U.S. citizens planning on studying overseas).
Many need-based loans are classified as subsidized, meaning that interest does not accrue while the borrower is enrolled in a degree program (whereas interest begins to accrue immediately on unsubsidized loans). Typical timelines of loan repayment can extend from 5 to 30 years, depending on the lender’s conditions of deferral and the amount of funds borrowed. After graduation, students usually have a 6-month grace period before monthly repayment begins. While schools’ admittance packages usually include detailed information about financing the J.D. degree, incoming students and applicants should not hesitate contact the school’s financial aid office for further information on available need- or credit-based loans.
In addition, most law schools offer loan forgiveness or repayment programs for graduates entering public service or otherwise low-paying law-related work. For law school applicants and students interested in public interest careers, checking out individual law schools’ loan forgiveness programs is another good way to determine how one can finance the cost of their J.D. degree.