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The Nuts and Bolts of Applying for Law School Loans

Today we will start with a matching game.

Three quotes:

1. “Money often costs too much.”
2. “It’s all about the Benjamins, Baby.”
3. “Stop flushing the damn toilet so often, you’re wasting money!”

Three speakers:

A. My Mom.
B. Diddy/P. Diddy/Puff Daddy/Sean Jean “Puffy” Combs.
C. Ralph Waldo Emerson.

Ok ready…. Match! Ok now…. Stop! Phew, I know that was tough, but it was a good warm-up for the hard work you’ll soon be putting into law school.* Also, it provided me with a handy little intro. As illustrated above (and with a quick Google search, if you still doubt me) everyone has an opinion on the subject of money. Some want to make it, some want to spend it, some wish they had more, some think it’s the building blocks of evil.

Law students, believe it or not, also run the spectrum. Although, I’ve been assured that by graduation anything but greed and materialism will be beaten out of my comrades and me, for now we are still varied on what sort of long-term earning goals we have. Yet, there is one thing that nearly all of us share: we’re financing this law school nonsense ourselves.

Now, sure, there are probably a few exceptions. Usually the exception is rooted in Mommy and/or Daddy. For the vast majority of us, however, we are relying on a little thing called Financial Aid to fund our legal quests through these hallowed halls.

I’ve already done a piece about living on loans in law school (if you are too lazy to click over I’ll go ahead and ruin the punch line: living on loans sucks), today I’m speaking to the process of getting those loans. And any grants you might receive to reduce the final amount of those loans. Note: I am not talking about merit scholarships in this piece. A future blog may, but for now this is just aid actually based on financial need.

Before we start, please read these two points, which have been bolded as a testament to their importance.

1) The process is a little different for every school, so you MUST check with the schools you are applying to before you start the process.

2) You want to start NOW. You should plan on applying for Financial Aid for every school that hasn’t already rejected you, not just the ones at which you are already accepted. If you are still waiting to hear from a school, then put them on your list and don’t miss any deadlines. Of course, if you’ve gotten the dreaded “Thanks but no thanks” letter, then that’s the end of the game. Don’t worry though, Yale Law doesn’t actually exist anyhow.

Ok so with those two big points in mind: Step 1, do your taxes. If you haven’t gotten those W2s for 2009 yet, get in touch with payroll to figure out when they are coming. Find the receipts for those liquid lunches with your coworkers that you plan to write off as business expenses. Give a call over to Sheldon at HR Block. Whatever you have to do, get going, and do it this week. Because in the Pre-Law world, April 15th doesn’t mean much. Most schools have deadlines in March for you to turn in your full financial aid application package, which only starts with a finished return. So get going now.

Also, and this is very important, you are very likely going to need tax returns for your parents’ households. Even if you’ve already graduated from college. Even if you’ve spent a year at a “real job” fetching coffee and doodling on post-it notes as an administrative assistant. Even if you have spent the past five years attempting to save a part of the world that does not have easy access to the Nintendo WII. Even if you consider yourself fully independent, you are likely still going to have schools that want your parent/step-parents’ tax information.

It sucks, I know, and a year ago I certainly called a number of financial aid offices to whine about how I’m a big girl and my parents haven’t helped me out at all for years. They didn’t care. Of course there are exceptions, people like Joan Rivers (over thirty), Kevin Jonas (married), Annie (orphaned) or Dominique Moceanu (legally emancipated) could likely get away with not providing their parents’ information (although they should still check). However, if you don’t share one of those four qualities, start bugging the ‘rents now get on TurboTax and get those papers filed.

Step 2: Fill out your FAFSA. This is the one step that is uniform for all schools (including undergrad, so hopefully you have some idea what I’m talking about). The good news is that for the purpose of government loans, grad students are considered independent from their parents. So, assuming you haven’t defaulted on your subprime mortgage anytime recently, it is likely that you will get approved for whatever loan money you should need.

Step 3: Here is where it starts to vary by school. Most schools will require you to fill out at least one extra form, generally to be used for deciding grants and scholarships. Some schools use services for this, like Others have their own personal application. Either way, since schools know that every applicant will be going through the same process, there should be step by step information located somewhere on their website/acceptance papers if you have already gotten in.

Step 4: Once again, you wait, while the school evaluates your existence.

Step 5: The schools will mail you a letter describing any grants they have deemed you worthy of, the loan types (Stafford un/subsidized, Perkins, Gradplus, etc.) they’re offering, and the amount you’ll be able to borrow. The final amount will equal the school’s tuition plus projected living expenses. Using this information and all the other fun facts you find in the glossy pamphlets they handed out at admitted students day, you will select your home for the next three years.

Step 6: You can then apply for a federal loan for any amount up to what your school has approved. Your school will provide you with unhelpful information full of decimals and percent signs about potential lenders, and the majority of law students will use the timeless eenie meenie minie moe to make their final selections. Keep in mind though, just like undergrad, it’s smart to take advantage of those subsidized pittances offered by the government first, before you sell your soul to get the rest at an 8.5% interest rate.

Of course, if you do have some savings or your parents are helping out, you should keep that in mind, and by no means have to accept the full amount for which you are approved.

Step 7: You’ll get approved for your loans and voila, free money**. If you don’t get approved for your full loan, decide you need more money, or are the son of the SVP at Citibank (Does Citibank even exist anymore?), you can also apply for private loans. Although, it is my experience that most law students do not take out more than their approved amount.

Step 8: Your lenders/schools will send you a bunch of things called Master Promissory Notes (MPN), which are simply those pacts with the devil put into writing. You will close your eyes and sign them, much like Ariel did in The Little Mermaid, and hope that, unlike her, you don’t end up naked, mute and washed up on a beach.

And that’s game. As I said above, Financial Aid is not the end all of law school funding. But only the most baller of students manage to get a full tuition scholarship (and if you are one of them, you win), and even if you get a partial scholarship you’ll need to follow the steps above to round out the rest of the funding. So Godspeed, my friends. And don’t forget—start doing your taxes……now.

*This activity is neither difficult nor anything like anything you will ever do as a law student.
** Loan money is the least free money in the world, and you should never, ever forget that.