You may have dreams of becoming a lawyer, so going to law school is the natural next step. But it comes with a price. Starting with grants and scholarships to cover costs is a great move, but if that doesn’t cover all of your law school expenses, you might need to take out student loans.
If you’re wondering how to pay for law school, your plan of action will vary depending on a number of things. Read on to learn how to get money for law school and make the right financial moves for you.
Factors to consider
Before assessing your student loan options, look at the big picture and figure out how to afford law school. There are various factors to consider to help you decide which options are the best.
- How much do I need to borrow? Depending on the law school you attend, tuition costs can vary. Is it an in-state or out-of-state school? Is it a public school or a private school? These are factors that can directly affect tuition costs. Evaluating your school choice will help inform your borrowing strategy.
- What kind of career do I want? Not all lawyers make the same amount of money. If you’re planning on going into BigLaw, you could score a salary of $190,000 or more. If you’re working in the public sector, you might be looking at closer to $60,000 per year. According to the Bureau of Labor Statistics, the lowest 10 percent of lawyers earned $58,220 as of May 2018. Where you want to work and its salary potential is very important to note before taking out loans.
- Does my school offer financial aid in the form of grants? Going to a school that offers more generous financial aid packages can help lower the amount you need to borrow.
According to data from Sallie Mae and U.S. News, these 10 public colleges award the most aid:
- Penn State University, Carlisle
- University of California, Davis
- University of Illinois, Urbana-Champaign
- Penn State University, University Park
- Arizona State University
- University of California, Irvine
- University of Minnesota, Minneapolis
- University of Virginia
- Indiana University, Bloomington
- University of Iowa
Here are the top 10 private colleges with the most aid available:
- St. John’s University
- Chapman University (Dale E. Fowler School of Law)
- Washington University in St. Louis
- Case Western Reserve University
- Loyola Marymount University
- Villanova University
- Hofstra University
- Quinnipiac University
- University of Southern California
- Yeshiva University
Knowing the amount of potential grant money you can get will let you determine you much you’ll need to borrow in loans — which is key. It’s also important to plan for your career trajectory. Someone pursuing BigLaw shouldn’t have the same loan strategy as someone pursuing a life of public service.
These things are important to consider so you can understand how feasible it would be to pay back your loans on your post-graduation salary.
How to pay for law school: Federal vs. private loans
If you want to know how to pay for law school, there are two student loan routes to take. You can take out federal student loans, which are issued by the U.S. Department of Education, or private student loans, which are offered by various private financial institutions.
Federal loan options
In most cases, consider federal loan options first. Federal loans have a host of protections, like student loan forgiveness, income-driven repayment plans, deferment and forbearance.
Your financial aid package will likely consist of Stafford Loans, but unfortunately, there are lower limits on these loans for law students. When you hit the limit, you’ll need to turn to Grad PLUS Loans, which require a credit check and have the highest interest rates of all federal loans at 7.08%.
In other words, your federal law school loans could come at a cost, even though they also have a number of benefits.
Federal loan options are a good fit for law students going into public service. That’s because these loans are eligible for Public Service Loan Forgiveness (PSLF) — a student loan forgiveness program where borrowers can have their loans forgiven after 10 years of public service and 120 qualifying payments (which don’t need to be consecutive).
If you’re working toward BigLaw, review your federal loan options compared to private loan rates. Federal loans may be a good option to start with, but private loans can help cover any gaps. Depending on your situation and risk tolerance, private loans could potentially be a better deal financially.
Private student loans
If you’re wondering how to get money for law school and your federal loans aren’t enough, private student loans are your next best option. Law students with goals to get into BigLaw might make $190,000 out of the gate and may be able to take on private loans without as much risk as someone pursuing public service.
Note that with any private lender, we would recommend borrowing the maximum amount for Stafford loans and using private loans solely to replace Grad PLUS. That’s because Grad PLUS has an interest rate 1% higher than Stafford and an origination fee of approximately 4.25% instead of 0% to 2% like most private lenders.
Sallie Mae has a specific loan program tailored to law school students. With no origination fee, the market leader in student loans has a good shot at getting you the lowest interest rate.
CommonBond offers private graduate student loans many without a cosigner, depending on your credit. When they make an offer, CommonBond is generally lower than what you’d get with a Graduate PLUS Loan.
LendKey, an aggregate site that connects borrowers with lenders, offers loans with variable rates or fixed rates.
Private student loans for law school can be good for those pursuing BigLaw, as they’ll have a robust salary to pay the loans back. If you know you’ll work in the public sector, consider private loans — carefully, as private loans don’t offer loan forgiveness or income-driven repayment options.
Loan repayment assistance programs
Wondering how to get money for law school aside from loans? Another thing to consider is the availability of loan repayment assistance programs (LRAPs) offered by your school or state government. LRAPs can provide financial assistance to lawyers working in the public sector.
How to pay for law school: Do your research
How to afford law school is a big question — and can be daunting. Law school isn’t cheap, and the career trajectories after graduation vary widely. That’s why it’s crucial to do your research for both federal and private loan options, scholarships, grants, LRAPs and other viable aid alternatives. Those looking to get into public service should try to stick to federal loans. But if you’re opting for BigLaw, you can review private loans as well with less risk.