FOR LAW SCHOOL:A PRELIMINARY GUIDE

FINANCIAL AID

LSAC.org

Legal education is an investment in your future and is aserious financial investment as well. As with anyinvestment, it is important to consider the pros and consof entering into such a large expenditure of effort, time,and money. Particularly in uncertain financial times, arealistic assessment of why you are seeking a legaleducation and how you will pay for it is critical.

The single best source of information about financing alegal education is the financial aid office (or the website)of any LSAC-member law school. LSAC.org provides linksto many law schools as well as several good sources offinancial aid information.

The cost of a law school education could exceed$150,000. Tuition alone can range from a few thousanddollars to more than $50,000 a year. When calculating thetotal cost of attending law school, you also have toinclude the cost of housing, food, books, transportation,and personal expenses. Law schools will establish a “Costof Attendance” that includes both the fixed costs oftuition and fees and allowances for your living expenses. It represents the maximum financial aid you may receivefrom any source.

Today, a large majority of law school students rely oneducation loans as their primary, but not exclusive, sourceof financial aid for law school. These loans must be paidback with your future income, and the more you borrow,the longer the debt will have an impact on your life aftergraduation.

Federal student loans offer the most flexible repaymentoptions, including the Income-Driven Repayment (IDR)plans where your monthly payment can be equal to lessthan 10 percent of your household’s monthly AdjustedGross Income (AGI) rather than on the amount of yourtotal student loan debt. They also provide moreopportunities for payment relief than loans funded by

private or institutional sources. Although private andinstitutional sources of loan funding may be available,these sources typically are used primarily by students whoare not eligible for federal student loans. The amount andtypes of loan funding you are eligible to borrow will bedetermined by financial aid staff at the school you attendbased on cost of attendance at that school, federalregulations, and institutional policies. When borrowingstudent loans for law school, it is best to

• borrow the minimum amount possible to attend the lawschool you choose;

• borrow federal loans first; and• avoid private student loans, unless you are an

international student and therefore not eligible forfederal student loans.

Scholarships, grants, and fellowships exist, but are limited.Some students are offered part-time employment throughthe federal work-study program in their second and thirdyears of law school. First-year students are expected toconcentrate fully on schoolwork with an ABA-mandatedlimitation on the number of hours full-time law studentsare permitted to work.

Changes in financial aid rules and regulations areongoing, and law school policies vary. Therefore, it is yourresponsibility to stay current and to educate yourselfabout financial aid in much the same way that youresearch law schools when deciding where to apply.

INTRODUCTION

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You are eligible to receive financial aid, if needed, in anamount not to exceed the Cost of Attendance (COA)established by the law school you attend. COA includestuition and fees, books and supplies, as well as livingexpenses, transportation, and personal expenses. It is setby the law school and will vary by school. Consumer debtis not included in your COA and should be paid beforeyou attend law school.

The law school’s financial aid office will review yourfinancial aid application materials and calculate youreligibility for the various forms of financial aid from allsources. It is important to carefully review your financialaid award and to understand the terms and conditions ofall aid offered to you. All applicants for federal studentaid (including loans) must complete the Free Applicationfor Federal Student Aid (FAFSA). If you plan on enrollingin law school at the beginning of the fall term, you canapply for federal financial aid using the FAFSA beginningOctober 1 of the prior calendar year.

If your financial circumstances change after you completeand file your financial aid forms, notify the financial aidoffice so that your financial aid award can be revised if necessary.

INDEPENDENT/DEPENDENT STATUSAll graduate and professional school students areconsidered financially independent of their parents forthe purposes of determining federal aid eligibility. Thismeans that for the purpose of applying for federal aid(including federal loans), submission of parentalinformation is not required. Law schools, however, mayrequire parental financial information for institutionalgrants and scholarships. You should be aware that the lawschools have specific policies and procedures regardingindependent status for the allocation of institutional funds. These guidelines will vary by school. You should

investigate those guidelines for all the schools you areinterested in attending.

The law school financial aid office will notify you of yourfinancial aid eligibility once all application materials havebeen received and processed if you have been admittedto the school. You may be eligible for several differenttypes of aid, which may be available to bring the cost ofattending law school within reach. The amount of aid youreceive in each category will depend on your ownresources, current federal regulations, and the financialaid policies and resources of each law school. Butremember, the total amount of financial aid you areeligible to receive (including loans) cannot exceed—butcan be equal to—the total Cost of Attendance (COA)calculated by the school. So, funding should be availableto attend whatever school you choose regardless of yourcurrent financial circumstances.

CREDITGraduate PLUS and private loans are approved on thebasis of your credit. If you have a poor credit history, youmay be denied a loan. If there is a mistake on your creditreport—and there are sometimes mistakes—you will wantadequate time to correct the error. It is essential to clearup errors or other discrepancies before you apply for aGraduate PLUS or private student loan.

You may want to obtain a copy of your credit report so that you can track and clear up any problems. You can order your free copy from one of the major creditreporting agencies online at annualcreditreport.com. Youmay also mail a request to

Central Source LLCPO BOX 105283Atlanta GA 30348-5283

DETERMINING ELIGIBILITY

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SCHOLARSHIPS AND GRANTSA scholarship or grant is an award that does not have to berepaid. It may be given on the basis of need, or merit, or both.Most scholarships are conferred by individual law schools.Some organizations may also have scholarships to offer.Among them are local bar associations; fraternities, sororities,and other social clubs; religious or business organizations; andthe US Department of Veterans Affairs. The availability ofscholarships and grants is limited, but worth researching. Lawschool admission and financial aid offices can provideinformation about the resources available. Be aware that manyscholarships and grants are merit-based and may require acertain level of academic performance for continuation. Someschools award merit money shortly after admission, whileothers may require separate scholarship application forms.Some schools award need-based institutional aid. Confirmwith each school what application materials are required andthe deadline for submitting those materials. Apply early for allinstitutional aid from law schools. A number of companiesoffer tuition reimbursement benefits to their employees and totheir employees’ dependents as well.

FEDERAL LOANS• Federal Direct Unsubsidized Loan: Law students may

borrow up to a total of $20,500 in the Federal DirectUnsubsidized Loan program each year from the USDepartment of Education. Information about the interestrate and fee structure for this loan is available atstudentaid.gov. Interest starts accruing as “simple” interest(it is not compounding while you are in school) once theloan is disbursed. This loan has a six-month grace periodbefore repayment begins. Flexible repayment plans exist,including options based on your household income;payment relief (deferment or forbearance) is availablewhen needed if you are experiencing financial hardshipduring repayment; and refinancing is possible through theFederal Direct Consolidation Loan program. This loan alsoqualifies for inclusion in the Public Service LoanForgiveness (PSLF) program.

FINANCIAL AID OPTIONS

Apply early for all institutional aidfrom law schools.

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NOTE: All loan terms are based on current federal statutes/regulations,and are subject to change.

• Federal Direct PLUS Loan for Graduate Students (GradPLUS): Law students who do not have adverse credit mayborrow the Direct Grad PLUS Loan from the USDepartment of Education to help cover their educationcosts. If you do have adverse credit, you can apply withan “endorser.” The endorser must be a US citizen orpermanent resident and cannot have adverse credit. Youcan borrow the Direct Grad PLUS loan in an amount up tothe school’s Cost of Attendance (COA) minus the amountof all other financial aid you are receiving (includingscholarships, grants, and all other loans). As with theDirect Unsubsidized Loan, interest accrues as “simple”interest once funds are disbursed. Repayment of theDirect Grad PLUS loan is deferred while you are in schooland for six months after you are no longer enrolled in lawschool. Flexible repayment plans exist, including optionsbased on your household income; payment relief(deferment or forbearance) is available when needed ifyou are experiencing financial hardship during repayment;and refinancing is possible through the Federal DirectConsolidation Loan program. This loan also qualifies forthe Public Service Loan Forgiveness (PSLF) program.

PRIVATE LOANSThere are a number of private loan programs available tocredit-worthy borrowers who are not eligible for federalstudent loans. Additionally, some lenders offerpostgraduate loans for bar-review study. Eligibility forprivate loans is based on your credit history and thelending institution’s willingness to lend.

The terms and conditions of these programs vary greatly.Pay careful attention to the explanations found in loanapplication brochures and consumer information. You canalso contact the individual programs or visit their websitesfor further details.

And remember, always borrow the minimum loan amountneeded to attend the law school you have chosen. Andalways borrow federal loans first, if available.

FEDERAL WORK-STUDYFederal work-study is a program that provides funding forfull-time students to work part time during the school yearand full time during the summer months. Studentssometimes work on campus in a variety of settings or inoff-campus nonprofit agencies. ABA standards limit a lawstudent’s paid employment to no more than 20 hours perweek. Additional information is available from participatinglaw school financial aid offices. Not all law schoolsparticipate in the federal work-study program.

VETERANS EDUCATIONAL ASSISTANCEThe US Department of Veterans Affairs administers a numberof educational benefit programs for veterans. These include,but are not limited to, the Montgomery GI Bill and thePost-9/11 GI Bill (9/11 GI Bill). The 9/11 GI Bill assists eligibleindividuals with tuition and fees, a monthly housing allowance,annual books and supplies stipend, and a one-time ruralbenefit payment for eligible individuals. In addition to the9/11 GI Bill providing an education benefit for eligibleveterans, the education benefit may also be transferred todependents under certain conditions.

The 9/11 GI Bill also has a provision that established theYellow Ribbon Program. This program assists with fundingtuition and fee expenses not covered by the 9/11 GI Bill. Thebenefits of this particular program are exclusively for eligibleveterans; the Yellow Ribbon benefits cannot be transferredto dependents. For more information on veteranseducational assistance, check with the US Department ofVeterans Affairs and the Offices of Veterans Affairs on thecampuses of the law schools to which you are applying.

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APPLYING FOR AID STEP BY STEP

The law school’s financial aid office willreview your financial aid applicationmaterials and calculate your eligibilityfor the various forms of financial aidfrom all sources. It is important tocarefully review your package and tounderstand the terms and conditions ofall aid offered to you.

Here is a list of steps you must take to apply for financial aid.

IF YOU ARE APPLYING FOR FEDERAL AID1. The financial aid process begins with the gathering of

information about the specific financial aid applicationprocedures and deadlines for the schools that you areinterested in attending. You should not wait until youreceive admission to begin the process. In fact, youshould be investigating the financial aid proceduresand deadlines as you are investigating the admissionapplication requirements.

2. Prepare your federal income tax returns as early aspossible after the first of the year. Schools may want tosee a copy of your actual tax return, so be sure tokeep a photocopy for your files. The Free Applicationfor Federal Student Aid (FAFSA) requires informationthat is requested directly from your tax return. You canfile the FAFSA for an upcoming academic yearbeginning October 1 of the prior calendar year. Youcan submit the FAFSA anytime after that date—theearlier, the better.

3. Complete the FAFSA online at fafsa.gov. FAFSA is aneed-analysis tool developed by the US Department ofEducation. As the name implies, there is no charge forthe collection and processing of data or the delivery offinancial aid through this form. So, do not pay anyone tohelp you complete or process your Free Application forFederal Student Aid (FAFSA). If you need help filling outthe application, contact the financial aid office at any ofthe law schools to which you are applying for assistance.

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• When completing the FAFSA form, you will designatethe names and school codes of up to 10 law schoolsto which you are applying. Additional schools may beadded once the FAFSA is processed. Information onschool codes is available from any law school financialaid office or at fafsa.gov.

• The FAFSA form asks for information about yourincome, assets, and other financial resources. Besure to answer “yes” to the following two questions:

• Are you a graduate or professional student?

• Have you completed a bachelor’s degree by July 1 of the year you will be attending law school?

All graduate/professional students are consideredfinancially independent of their parents for thefederal loan programs.

4. The law schools to which you apply will determine thetype and amount of financial aid you are eligible toreceive. The amount offered by each law school willvary because costs vary from school to school. You willreceive notification of your financial aid package onceall information has been received, if you have beenoffered admission to the school.

5. Once you determine the school that you will attend,you will need to apply for any loan funding you need toborrow. Follow the instructions provided by the schoolto complete the required loan application materials.Remember, you cannot borrow more than what thefinancial aid staff has determined you are eligible toborrow. Also, you should borrow the minimum amountneeded to attend the school you have chosen.

IF YOU ARE APPLYING FOR INSTITUTIONALSCHOLARSHIPS AND GRANTSCall, write, email, or visit the website of the financial aidoffice of the law schools to which you are applying.Determine if the school requires any applications ordocuments in addition to the FAFSA and admissionapplication materials for you to be considered for financialaid, including any scholarship or grant funding they offerto students. You may need to complete an institutionalfinancial aid application or an additional fee-basedapplication such as the CSS Profile. The school also mayrequire you to provide financial information from yourparents if they offer need-based scholarship/grantfunding. In addition, be aware of any application filingdeadlines—many schools do have priority deadlines forreceiving the financial aid application materials.

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BEFORE LAW SCHOOL: CAREFUL PLANNING

Plan a financial strategy before you enter law school. Ifpossible, pay off any outstanding consumer debt. Save asmuch money as you can to reduce the amount you willborrow. Have a plan for meeting the expenses of yourlegal education and anticipate what portion of the planwill be based on borrowing. It is also important that youhave a good credit history.

Because most of your financial aid is likely to come fromloans, you are likely to graduate from law school withdebt to repay. Currently, many law students are borrowingmore than $100,000 to finance their legal education.Keep accurate records of all loans you receive duringyour enrollment in law school; this will help you manageyour repayments when you complete your education. Agood resource for tracking all your federal student loansis the National Student Loan Data System (NSLDS),created by the US Department of Education. You canview a complete history of your federal student loans at nslds.ed.gov.

You are required to complete entrance counseling priorto the first disbursement of a Federal Direct Unsubsidizedor Direct Graduate PLUS loan in a new degree program.You also are required to complete exit counseling prior toleaving school. The financial aid staff will instruct you onhow to complete these loan-counseling requirements.You may need to do so online or during in-personmeetings at the law school. Information about the loanterms, repayment obligation, payment options, samplepayment schedules, and other important informationabout managing loan repayment will be provided to youduring this counseling activity.

Because most of your financial aid is likely to come from loans, you are likely to graduate from law school with debt to repay. In essence, you willend up with an “education mortgage.”This “mortgage” represents thefinancing you will need to make thisinvestment in yourself. But, it still isimportant to borrow wisely.

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WHILE IN LAW SCHOOL: LIVING ON A BUDGET

Since loans often are the primary funding source studentsuse to pay for law school, it is important to think about howmuch you should borrow. It should be the minimumamount you need to attend the law school you choose andto achieve your goal of becoming an attorney. Determiningthat amount requires that you estimate your in-schoolbudget to determine how much law school will cost foryou. Then you need to estimate how much you will be ableto contribute from your own resources (and from yourfamily) as well as any scholarship or grant funding youexpect to receive. The difference between what it will costand what you have from other sources should representthe amount you will need to borrow. And hopefully it is lessthan what the school has indicated you are eligible toborrow. The amount of loan funding included on yourfinancial aid notice from the school is not prescriptive—it isnot what you should borrow—but rather, it represents themaximum amount you are eligible to borrow based on theinformation you provided in your financial aid applicationmaterials, the Cost of Attendance for the school youchoose, current federal regulations, and school policies.

The maxim “Live like a student now or you will live like astudent later” is a good one to remember. Consult theCost of Attendance (COA) for each school you areconsidering to obtain an estimate of the living expensesyou might incur to attend that school. Doing so will allowyou to estimate your budget accordingly. Track yourcurrent spending habits and compare them to the COAat those schools. To reduce spending, consider sharinghousing costs with a roommate rather than living alonewhile in law school (check with the school to see if theyoffer any assistance in finding a roommate). And watchwhat you spend on food and entertainment. Theseexpenses often can be budget busters. Bring your lunchrather than buying one on campus each day. While lawschool may be an excellent long-term investment, you will

have to repay what you borrow (with interest), so borrowwisely. Remember, not all lawyers earn the highestsalaries.

But, remember, you also will need funds to cover yourliving expenses during the summers between each year oflaw school, and as you prepare for and take the bar examafter you graduate. You cannot receive “extra” financial aidto cover these expenses, so make certain you account forthem as you decide how much to borrow each academicyear. You may need to use your savings or earnings fromemployment for these summertime and postgraduateexpenses. Also note that current federal regulations do notallow schools to include the cost of repaying your priorconsumer debt (such as credit card debt) in Cost ofAttendance. So it is important to pay off any existingconsumer debt before you start law school, if possible.However, repayment of your prior education loans shouldbe eligible for deferment while you are in school.

Interest on Direct Unsubsidized and Direct GraduatePLUS loans accrues from the date funds are disbursed. It accrues as “simple” interest; it is not compounding.The accrued interest will be capitalized (added to theprincipal loan balance) when the loans enter or re-enterrepayment (six months after you are no longer enrolled inlaw school). As such, you will not be paying “interest onthe interest” while you are in school.

You will not have to start repaying the federal loans youborrow to attend law school until at least six months afteryou leave school. You also may be able to postponerepayment of any federal (and perhaps, private) studentloans you borrowed prior to enrolling in law school.Contact the loan holder or servicer of any prior studentloan to investigate your deferment or forbearanceoptions and to learn how to pursue those options.

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REPAYMENT OPTIONS

Your income after law school is an important factor indetermining what constitutes manageable payments on youreducation loans. Although it may be difficult to predict whatkind of job you will get (or want) after law school, or exactlywhat kind of salary you will receive, it is important that youmake some assessment of your goals for the purpose ofsound debt management. The money you borrow will bepaid back from your future earnings. It could have asignificant impact on your lifestyle if you do not understandyour payment options and plan for repayment strategicallyafter you graduate. In addition to assessing expectedincome, you must also create a realistic picture of how muchyou can afford to pay back on a monthly basis whilemaintaining the lifestyle that you desire.

You may have to adjust your thinking about how quickly youcan pay your loans back, how much money you can afford toborrow, or how extravagantly you expect to live in the yearsfollowing your graduation from law school.

Your education loan debt represents a serious financialcommitment that must be repaid. A default on any loanengenders serious consequences, including possible legalaction against you by the lender or the government, or both.

Federal loans offer graduated, extended, and income-drivenrepayment plans that lower monthly payment amounts butincrease the number of years of repayment. The FederalDirect Consolidation Loan allows students to refinance anyof their existing eligible federal student loans on anextended repayment schedule, lasting up to 30 years.

Be strategic when repaying your federal student loans.Understand the repayment options that are available andtake advantage of the flexibility that is available whendeciding how to manage repayment. Learn more aboutrepayment and check out the “Repayment Estimator” thatis available from the US Department of Education atstudentloans.gov.

Federal loans offer choice, flexibility,and safety during repayment so thatyou can repay all that you borrow andachieve your other financial goals.

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NOTE: All loan terms are based on current federal statutes/regulations,and are subject to change.

STRATEGIES FOR GRADUATES SEEKING PUBLICINTEREST CAREERSStudents who seek to work in public service or the publicinterest sector of the profession face special challenges infinancing their legal educations because salaries for suchjobs are often lower relative to comparable work in theprivate sector. Students graduating from law school withthe average amount of indebtedness may find that theaverage entry-level public service or public interest salarywill not provide the resources needed to repay their lawschool loans and cover their basic living expenses.

Students can employ a number of strategies to make iteasier (or possible) to pursue a career in government orpublic interest law. First, students can borrow less duringlaw school (attend a lower tuition institution; follow someof the debt management strategies mentioned here).Students may also take advantage of programsdeveloped at some law schools to relieve the debtburden for those interested in public interest careers,including fellowships, scholarships, and loan repaymentassistance programs (LRAPs). LRAPs provide financialassistance to law school graduates working in the publicinterest sector, government, or other lower-paying legalfields. In most cases, this aid is given to graduates in theform of a forgivable loan to help them repay their annualeducational debt. Upon completion of the requiredservice obligation, schools will forgive or cancel theseloans for program participants. The number of lawschools sponsoring LRAPs is limited. Most schools areunable to provide assistance to all applicants. LRAPs arealso administered by state bar foundations, public interestlegal employers, and federal and state governments toassist law graduates in pursuing and remaining in publicinterest jobs.

The federal government offers repayment options toassist graduates seeking legal careers in public service,including the Income-Driven Repayment (IDR) plans, suchas Revised Pay As You Earn (REPAYE), Pay As You Earn(PAYE), and Income-Based Repayment (IBR). The PublicService Loan Forgiveness (PSLF) program also provides arepayment benefit once you complete 120 months ofqualifying public service. REPAYE, PAYE, and IBR will allowfederal education loan borrowers the opportunity tomake lower monthly payments on their federal loans(including, but not limited to, those employed in publicservice positions), provided that income qualifications aremet. Monthly payments under these repayment plans are based on a percentage of your household’s adjustedgross income (AGI) and your household size rather than on the amount of your federal student loan debt. ThePublic Service Loan Forgiveness Program allows borrowerswho work in government or nonprofits the opportunity tomake payments under REPAYE, PAYE, or IBR, then havetheir outstanding balances forgiven on their Federal Direct loans after 120 months of qualifying public serviceemployment and qualifying payments. Please check with your schools or directly with the US Department ofEducation at studentaid.ed.gov/publicservice for detailson these programs.

Law School Admission CouncilPO Box 40, Newtown PA 18940-0040LSAC.org

A Publication of the Law School Admission Council. Visit us at LSAC.org or call 215.968.1001.© 2016 by Law School Admission Council, Inc. All rights reserved.

In addition to the websites of the individual law schools(which can be accessed through LSAC.org), the followingUS Department of Education sites may prove helpful:

• fafsa.gov Free Application for Federal Student Aid

• nslds.ed.gov National Student Loan Data System

• studentaid.ed.gov/publicservice Information and resources regarding the Public Service Loan Forgiveness program

• studentaid.gov Primary source of federal financial aid information and resources

• studentloans.gov Information and tools for managing federal student loans, including a “Repayment Estimator.”

QUESTIONS TO ASK ABOUT FINANCIAL AID

As you speak with representatives from law schools, hereare some of the questions you should ask as aprospective law student:

• Are there forms in addition to the FAFSA that I mustcomplete for your school?

• Does your school have a priority deadline for theFAFSA and other financial aid application materials?

• Does your school consider parental incomeinformation?

• What does your cost of attendance include?• What kinds of scholarships are available? Specifically,

ask about merit- and need-based scholarships.• What is your average loan debt?• Do you have a “Loan Repayment Assistance Program”

(LRAP) for graduates who pursue a career in publicservice after graduation?

• Will I be able to work during law school? Are there anyon-campus jobs or work-study positions available?

• What is the job placement rate at your law school, andwhat is the salary range for its graduates?

Keep in mind that the law school is the primary source ofinformation regarding money for legal education.