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 may 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 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 Financial Aid
Many students rely primarily on federal student aid 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 may not borrow more than the cost of attendance at your school, minus any other financial aid you receive, you may receive less than the annual maximum amounts described below. As a graduate student, the federal government considers you independent of your parents for federal student aid.
The following federal financial aid programs are available to law students.
Direct Stafford Loans: A combined total of $20,500 per year is available in Direct Subsidized and Unsubsidized Stafford loans. Students borrow directly from the U.S. Department of Education.
Direct Subsidized Loan: Up to $8,500 per year is available to students with financial need, based upon information obtained from the FAFSA (see How to Apply for Financial Aid). You are not charged interest while you are enrolled in school at least half-time and during grace and deferment periods.
Direct Unsubsidized Loans: Interest accrues on the unsubsidized loan from the time it is first paid out. You are not required to demonstrate financial need to receive this loan.
Direct PLUS Loans for Graduate and Professional Degree Students: Many law students choose Direct PLUS loans instead of private loans to cover their remaining financial need beyond the $20,500 available through the Direct Stafford Loans.
Law students who do not have an adverse credit history are eligible for these loans. You are not required to demonstrate financial need to receive this loan.
Federal Work Study: Federal work-study funds are awarded by the schools to provide part-time jobs for graduate students with financial need. Many students work on campus for their schools; the program also encourages community service work in qualifying private nonprofit organizations and public agencies, and work related to the recipient’s course of study.
Federal Perkins Loan: This low-interest (5%) loan, up to $5,500 per year, is available at some schools to students with exceptional financial need. Students’ awards are determined by the schools, based upon information obtained from the FAFSA (see How to Apply for Financial Aid). The loan is made through the schools’ financial aid offices.
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’s 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 legal education entirely through federal financial aid programs described above, which are regulated by the federal government and typically have lower interest rates.
Grants and Scholarships
Law schools offer grants, scholarships, and loans, based upon criteria set by the schools, 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 with an offer of admission to highly qualified applicants. 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 per week a first-year law student can work. After the 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.
Applying for Financial Aid
Check your credit. Before you begin the financial aid application process, request a free copy of your credit report so that you can identify and clear up any problems.
Good credit is required for the Direct PLUS loans and private loans.
Apply early. Check each law school’s website for 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 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 is also 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, inform the law school’s financial aid office. This information 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 ten law schools on the FAFSA, 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
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 financial considerations with other criteria, such as reputation, location, size, faculty, programs, and employment 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 completed the FAFSA and law school financial aid forms, you must still follow additional steps to receive your loans. Your law school financial aid office is the best resource to help you with the process of securing federal financial assistance and any private loans, if needed. There are several online resources you may find helpful: accessgroup.org/Student-Loans/learn-about-loans/wise-borrower-tutorial.htm, finaid.org, fastweb.com, and for public interest law programs and law school loan repayment assistance programs (LRAP), equaljusticeworks.org/.
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. 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.