Financing Law School
Law school is an important investment in your future. Consider the financial aid process as seriously as you do the law school application process.
Before you apply to law school, spend money wisely and pay your bills on time to ensure a good credit record. Bad credit will affect your ability to borrow money. If possible, pay off credit cards and other consumer debt before law school.
Think about your post-law school goals. Salaries for lawyers vary widely, depending on the type of practice and region. Law school debt will claim a significant portion of your income as a lawyer.
To keep debt to a minimum, consider state-supported law schools, or schools that offer merit-based aid. If you are considering a career in government or public interest law, investigate loan repayment assistance programs (LRAPs) that help law school graduates repay their education debt.
Sources of Funds
Personal Savings/Family Support If possible, set aside your own funds to help pay for law school. Talk with family members about whether they can help with law school expenses. Some students choose to live at home during law school to avoid paying rent.
Federal LoansMany students rely primarily on federal loan programs to finance law school. Total federal aid is available to cover (but not exceed) the law school’s student expense budget, which includes tuition and fees, room and board, books and supplies, transportation, and other expenses. Because you are applying for graduate study, you are considered independent of your parents for these loans.
Some law schools participate in the Ford Direct Loan Program, through which the U.S. Department of Education is the lender. At other law schools, you will choose a lender to obtain the federal Stafford or Grad PLUS loans.
The following federal loans are available to law students:
(Subsidized) Federal Stafford and Direct (Ford) Loan. Up to $8,500 a year is available to students who meet the need criteria. Interest is paid by the federal government while you are enrolled at least half-time.
(Unsubsidized) Federal Stafford and Direct (Ford) Loan. In combination with the subsidized loan, a student may borrow up to a combined total of $20,500 in subsidized and unsubsidized loans.
Graduate PLUS Loans for Law Students. Law students with an absence of bad credit may be eligible for these loans. Many law students are choosing Graduate PLUS instead of private loans to cover their remaining financial need beyond the $20,500 available through Stafford loans.
Federal Perkins Loans. These low interest loans are available at some law schools. Each student's award is determined by the school, based on information obtained from the FAFSA (see How to Apply for Financial Aid).
Credit is an important factor in securing private loans. Interest rates, fees, and terms of repayment vary significantly.
It is best to work with your law school financial aid office BEFORE making a decision about loans for law school.
Beware of direct marketing from private lenders. It is possible to finance your legaleducation entirely through Federal Stafford and Direct Loans along with Graduate PLUS Loans, which are regulated by the federal government and typically have lower interest rates.
Grants and Scholarships
Grants and scholarships are offered by law schools based upon criteria set by the school, which can include academic merit, financial need, ethnicity, specific talents, residency or other qualifications. Check with each law school early in the application process for more information.
Law schools may offer merit scholarships to highly qualified applicants with an offer of admission. When law schools consider your financial need, they may require family income information even if you are considered independent for tax purposes, or for federal education loans.
Some states provide limited grants for law school; there are no federal grants for law students. Certain national foundations and organizations offer grants and scholarships for law school through a competitive application process.
The American Bar Association sets limits on the number of hours a first-year law student can work per week. After first year, many law students obtain summer employment and part-time employment during the school year. This can help reduce the amount of money borrowed.
It is often said, “If you live like a lawyer in law school, you will live like a law student once you graduate.” Frugality can be your best friend.
How to Apply for Financial Aid
Check your credit. If you will be using Federal Grad PLUS or private loans for law school, order a free copy of your credit report and verify the information. These loans may not be available if your credit history does not meet minimum standards.
Apply early for financial aid. Check each law school’s website to learn financial aid deadlines. Some schools have priority dates for submitting financial aid information; students who apply earlier have a better opportunity to obtain limited grant money.
Complete your FAFSA as soon as possible after January 1. Completion of the FAFSA (Free Application for Federal Student Aid) is required for all federal student loan programs. The FAFSA also is used by some law schools to collect information for their own institutional aid. Because the FAFSA requires tax information from the previous year, it cannot be completed before January 1.
Some schools have separate applications for financial aid, while others use the law school application or the FAFSA. Schools also vary in how they distribute their own funds.
If you have special circumstances, provide this information to the law school financial aid office. This can be critical for law students who have been working full-time in the prior year or who have unusual medical or family expenses.
Do NOT wait to complete the FAFSA until after you are admitted to a law school. You can list up to six law schools where you want reports sent, and update this list with additional schools.
If your federal tax return will not be ready until later in the spring, you can estimate prior year income on the FAFSA. Parental income is not considered in determining eligibility for federal loans to graduate-level students; you will be directed to skip Section III- Parental Information in the FAFSA.
Making the Decision
Once you have provided all required information, law schools can offer you a financial aid package. To determine your financial need, schools take the estimated contribution calculated by the federal government on your FAFSA and subtract it from the school’s student expense budget.
In deciding which law school to attend, it is important to balance your financialconsiderations with other criteria, such as reputation, location, size, faculty, programs and placement success. Compare the net of your projected costs at each school you are considering, offset by any offers of grants or scholarships from the school, to determine the amount you will need to make up through loans or personal funds.
Applying for Loans
Once you have chosen a law school, expect to receive important additional financial information from the school. Even though you have already completed the FAFSA and law school financial aid forms, you must stillapply for the loans.
Your law school financial aid office will help you identify the correct process for securing federal loans, and, private loans if needed. Do your homework to compare fees and repayment terms for all of your loans, using loan calculators available on financial aid websites (see below). Keep good records of all loan transactions.
Borrow only what you need, and not more, to keep your debt low and your monthly repayment amount manageable.
Financial Aid Resources
lsac.org–Financial aid for law school
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fafsa.ed.gov–Standardized financial information about Federal loans, and
http://studentaid.ed.gov–more information on federal student aid
AnnualCreditReport.com–Free annual credit report
accessgroup.org/Student-Loans/learn-about-loans/wise-borrower-tutorial.htm–Personal finance and other financial aid information
Equal Justice Works -Information on public interest law programs and law school loan repayment assistance programs (LRAP)
finaid.org–Student guide to financial aid
fastweb.com–Financial aid search engine