Student Loans for Law School

If you are considering becoming a lawyer, but will need student loans for law school, there are 3 options to consider. Each of the options described below has certain advantages and restrictions that you should understand and consider when you are trying to figure out how to pay for school. For most students, a blend of two or three of these options is most appropriate, o required, because of the restrictions that exist. Understanding your options is the first step to planning for law school.

Subsidized Graduate Stafford Loans

A subsidized graduate Stafford loan is awarded based on your financial need. With this type of loan, you do not have to pay any interest while you are in school or during the deferment period. The deferment period typical extends for six months after graduation. During this period, the federal government subsidizes the loan by paying the interest for you. Once you enter the repayment period, interest begins to accrue to you as the borrower, but before this, the loan is interest free. All Stafford loans have principal guarantees provided by the federal government and carry maximum interest rates that vary based on the date the funds are dispersed.

There are restrictions on the maximum amount that a law student can borrow as a subsidized Stafford loan. You can borrow no more than $8500 per year, and no more than $65,500 total. The maximum debt amount for law students includes any subsidized Stafford loans that you took as an undergraduate as well.

Unsubsidized Graduate Stafford Loans

Unsubsidized graduate Stafford loans are not based on need. Any eligible student currently enrolled in school may apply for this type of loan. In this case, you take the loan and the interest begins to accrue immediately. It is still deferred until you graduate, but the additional amount is capitalized. This means that the interest balance that goes unpaid while you are in school is added to the principal balance upon graduation.

There are restrictions on the maximum amount that a law student can borrow on an unsubsidized loan as well. You can borrow up to $20,500 in any given year, including the $8500 than may be subsidized. The maximum debt amount for a law student is $138,500, which includes the $65,500 maximum of subsidized Stafford loans and any Stafford loans that were taken out while you were an undergraduate.

Private Loans

In addition to Stafford loans, as a law student, you may be eligible for private loans. This is usually the type of loan that students take to cover cost of living, as well as any shortfalls created by other loans. You should contact your school and determine the annual cost that they estimate for attending. This number will include tuition, books, and cost of living. This number is published as is usually the maximum a lender will approve you for without special dispensation from the school financial aid office. This is a universal number determined for all students and is meant to help you budget to a standardized and reasonable figure. Most students use a blend of all three types to meet all of their financial needs.