Unless you are
extremely wealthy, you would need some kind of student loan to assist
you financially in your law school education. Understanding
how law school
student loans work would help you to take advantage of
graduate federal loans and if necessary, other private loan to
suppliment the federal loan. When the government is willing to extend a
loan towards your education, why fail to make use of it. Let us first
explore the various kinds of federal loans and then briefly take a look
at private loans.
Graduate
Federal Loans
Prerequisites
- file your FAFSA first
To be eligible for federal loans, you first need to file your FAFSA
application. This is the most important first step. In fact so many
people don't take the time to finish this simple task and therefore
lose the valuable opportunity to secure a student loan. The FAFSA or Free Application
for Federal Student Aid is the basic application form for determining
your eligibility for federal student financial aid. The FAFSA consists
of a series of questions which help determine the Expected Family
Contribution or EFC. As many schools may award aid on a first-come,
first-served basis, you must fill out the FAFSA as early as possible to
get maximum financial assistance. The FAFSA might also be useful for
securing state as well as private loans.
Another important thing you have to know is that you must file a FAFSA every
single year. Not many people know this. FAFSA is a need-based loan and
the Government needs to assess your need every year. Incomes changes,
situations change, and so your EFC needs to be recalculated
every single year. So make sure to file your FAFSA application promptly
every year. And remember to do it early every year.
Stafford
Loans Federal student loans
should be your first option for funding your law school education.
Federal law school student loans can either be subsidized or
unsubsidized Stafford Loans. These loans are affordable and are
available to almost every student. The Stafford Loan limit for graduate
students is $20,500. The actual amount of your award may however be
less than this.
Grad
PLUS Loan For additional funding
consider going in for a Grad PLUS Loan which is PLUS Loan specifically
meant for Graduates and Professionals. Since this is not a need-based
loan, a credit check is done to see if you qualify. However, if you
have bad credit you may still qualify if you apply with a credit-worthy
cosigner who may be a relative or a close friend. If you make a series
of payments on time, lenders may even release your cosigner from the
loan. You can also use your consistent payment history to build good
credit for yourself.
Private
Loans Use private loans only
as a supplement or auxiliary loan. Consider private loans only to cover
limited expenses and never to completely fund all your educational
costs. Borrow only what you need
for education expenses and only after you’ve applied for all
the
federally sponsored money you can get. Use an online college cost
calculator to add up the bottom line figure you may still be
responsible for paying toward your education. This final figure is an
estimate of what you may consider financing with a private loan. When it comes
to private student loans, but you’ll find generic
loans as well as some specially packaged private Law Loans. Private
loans may include features such as higher loan limits and no
payments until you graduate. Small loans designed to cover the expenses
of taking the bar exam are also available.
A word of caution
Borrow only what you need to cover your immediate expenses. According
to the American Bar Association, the average monthly student
loan payment of new attorneys is a little over $1,000 each month. So shop responsibly to keep the
repayment amount as low as possible in order to help you pay off the
amount eventually.
Other
Alternatives Some law schools offer
limited loan forgiveness for law graduates who are willing to work in
government or the public sector. These alternative law loan repayment
programs include:
1. Hofstra University Law School Loan Repayment Program is
offered in limited scope only to qualified graduates who agree to work
for non-profit or other eligible public service law practice for at
least a year and earn less than $56,000 to qualify.
2. AmeriCorps’ Pro
Bono Legal Corps funds fresh law graduates. When these
graduates volunteer to do grassroots
legal work for a couple of years, they
qualify for a monthly living
stipend, student loan forbearance, and
receive $4,725 in the form of an
“education award voucher” to use as
partial payment on their federal student loans.
3. Loan Forgivenessis the
College Cost Reduction and Access Act passed in September 2007 which
states that if you serve as an attorney in a public service capacity
and pay consistently on your student loans for 10 years, at that point
under this law the federal government expunges the remaining balance on
your loans.
Spend time to explore the
various law school student
loans available for your
specific needs. Make use of all the
financial help that you can get. Most important of all, apply for all
these loan programs as soon as possible to ensure that you get maximum
financial aid.
