The Types of Law School Loans
- Feb 06, 2023
- financial aid
As many of you may already know, law school can be expensive. Most students end up taking out loans to cover the cost of tuition and cost of living. You may choose federal loans, private student loans, or both to fit your financial needs. So, read on for a comprehensive guide from Blueprint Prep and learn about the type of loan that fits your needs best.
Federal Loan Options
The federal student loan is generally the type of loan you want to take out first. There are two different types of federal loans you may pursue: a Federal Direct Unsubsidized Loan and a Graduate PLUS loan. Both loans start accumulating interest immediately after the loan is disbursed. They are guaranteed to have a grace period after graduation, and should you pursue the Public Service Loan Forgiveness (PSLF) program they may even allow student loan forgiveness. The interest rate on all federal loans is capped at a rate usually lower than private lenders. The unsubsidized loan is capped currently at $20,500 each year and is guaranteed as a possibility for all law students, no matter your credit score. Meanwhile, a Grad PLUS loan has no cap but will require a cosigner should you have a poor credit score. Just be sure you compare the repayment plan of these student loans before you decide which one to get.
If you are considering federal student loans to pay for your journey through law school, take a look at the Free Application for Federal Student Aid (FAFSA) form. The current state deadlines to apply for the 2023-2024 academic year changes by state, but the federal deadline is June 30, 2024.
Generally, private law school student loans should be taken as supplementary after federal student loans. While some might give the option to delay payment until after graduation like federal student aid does by default, most will require payments while still in school. Unlike a federal loan, private loans can have a variable interest rate that may change over time. This is something to consider carefully, as you will not know how the interest rate may change in the future. Similarly to a Grad PLUS loan, you cannot have a poor credit history to qualify for most, if not all, private loans. These detriments show why you should seek federal law school loan options first and use a private student loan as a last resort.
Taking out student financial aid for law school can be a stressful journey for anyone. The good news is understanding the process is possible! Use the information in this blog to make an informed decision of what is best for you and your financial needs. If you are at all unsure of what type of student loan is best for you, just make sure to take your time and weigh your options carefully.
And if you want an option to take out fewer law school loans, apply for our no-essay $20,000 Law School Scholarship Giveaway!
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