Paying for Your Degree: A Guide to Financial Aid

Not sure how to pay for three years of law school? Money doesn't grow on trees, but it does come in the form of loans and scholarships. Find out which sources of funding are right for you.

The old adage holds true: You have to spend money to make money. Becoming a lawyer is no exception-you may anticipate earning six figures as an attorney, but law school expenses can set you back by more than $130,000. So before you trot into court decked out in Ferragamo (or at least Brooks Brothers), you need to figure out how to pay for three glorious years of nose-to-the-grindstone education.

Although scholarships, grants, and good old-fashioned employment are all available to help finance a JD, most students take on loans. According to the Law School Admission Council (LSAC), approximately 80 percent of law students borrow money to cover tuition, books, an apartment, and a steady supply of macaroni and cheese. The money comes from three major sources: individual law schools, the federal government, and private lending companies. The size of packages available, as well as differences in payback plans and interest rates, will help determine which source-or combination of sources-is right for you. Students who borrow from federal and private sources graduate with an average debt of $80,000; those with only government loans generally owe around $39,000, according to LSAC.

Aid from Schools
Most students first hit up the financial aid office of the school they choose. Schools generally offer money more freely and with fewer contingencies than other lenders, because the aid is not always closely tied to exact need. Many, including Temple University's Beasley School of Law, do not require students to include parental income information when they apply for scholarships, grants, and loans. Some schools even dish out "emergency loans" if you're suddenly short of cash in the midst of your three years. Washburn University School of Law in Kansas administers federal aid programs through the university's financial aid office; but the law school has its own stash of funding to help students (usually those who have already applied for federal financial aid) with short-term emergency loans. Similarly, Tulane Law School in New Orleans and the Northwestern School of Law at Lewis & Clark College in Oregon maintain specific funds for emergency loans.

The flip side to borrowing from schools, though, is that they may ask for the money's return more quickly than the government or a private lender. They also often allow you to borrow more money than you need. Just keep in mind that the more cash you request today, the more you will have to pay back-with interest. And you really shouldn't have to subsist on ramen noodles after law school.

Federal Government
You will probably take private as well as government loans, but check with the public sources first. Federal loans such as unsubsidized or subsidized Stafford Loans (the latter is based on need and doesn't accrue interest while you're in school) boast the lowest interest rates and do not require a credit check. You merely have to fill out the FAFSA (Free Application for Federal Student Aid). And people are definitely taking advantage of Uncle Sam's help: In fiscal year 2000, some 8.4 million undergraduate and graduate students borrowed $51.4 billion from the federal government, according to Joe Aiello, media relations director of the government's Student Financial Assistance department. These allocations are based on the U.S. Department of Education's annual budget, which Aiello notes may increase in the upcoming year. You must apply to renew federal loans every year by filing a new FAFSA, and your loan eligibility is subject to change during your school term (say, due to inheritance or marriage).

Private Lending Companies
You might not qualify for all forms of federal aid (for example, your spouse may earn too much). But if Daddy Warbucks isn't writing your tuition checks, a private loan organization can help you finance your education.

"Different people are comfortable with different amounts of debt," says Pat Curry, communications director at Access Group, Inc. (302-477-4190 or 800-282-1550), a major private lending organization. "The biggest thing is really just planning and researching and being prepared." Curry stresses that groundwork must include ensuring your eligibility: Pay off all debts and credit cards before applying for private loans, which rely on credit checks for students and/or their co-signers. (To get a copy of your credit report, visit QSpace, which provides online reports from the Equifax, Experian, and Trans Union credit bureaus.)

Sallie Mae, the largest private provider of educational funding in the U.S., offers a LAWLOANS program in conjunction with other lenders. To qualify for its private loan, you must request a Federal Stafford Loan first, but you can apply for both from its Web site or call 800-984-0190. A Sallie Mae representative says that many entering law students have already reached the maximum federal aid allowance while financing their undergraduate educations. For them, private loans are available-with a benefit come graduation time: "You always want to use your law study loans, because then you are eligible for a bar study loan [when you are studying for the bar exam]."

Sallie Mae's annual loans stretch from $500 to the maximum education cost a student faces (minus other aid received) and have a nine-month post-graduation grace period before repayment begins. Interest rates and fees vary depending on where you attend school and whether you enlist a co-borrower, but may be as low as $50 per month. Graduates may elect to pay only the interest for two to four years after they earn the diploma. Furthermore, if you need to drop out for a semester before the loan is fully disbursed, you are eligible to apply for new loans as soon as the law school returns the money. And if you become permanently disabled, the government steps in and picks up the tab.

Other options to consider include: Fleet 1st Loan Program (888-FLEET-GO), the TERI Alternative Loan (800-255-8374), and Nellie Mae EXCEL (800-634-9308).

Scholarships
If the mere thought of debt brings on an anxiety attack, there are a few ways to avoid it and still sport the "Esq." after your name.

Jennifer, a 1L at Saint John's University School of Law in New York, got three fat envelopes from admissions offices-and three fat envelopes from financial aid offices. While both Catholic University of America's Columbus School of Law and Penn State University offered her partial tuition packages, St. John's offered her a free ride. Jennifer had a tough time making her decision, though, since Catholic had offered her a spot in its prestigious communications law program. But a dean at Catholic admitted that leaving law school without loans would provide Jennifer with more freedom to pursue her career path of choice without financial obligations clouding her decisions. "He basically told me, 'Holy cow! Take it!'" Jennifer laughs. And she did, opting to go with the full academic scholarship. It has certainly paid off: While many 1Ls feel the heat when their only summer job offers are for unpaid positions, the money Jennifer saved on tuition allowed her to seek-and accept-a summer internship in the public sector.

Many schools offer need-blind merit scholarships, as well as grants to cover demonstrated need. For example, the University of Dayton School of Law in Ohio awarded scholarships (ranging from $2,500 to full tuition) to at least 90 of the 167 members of its fall 1999 incoming class. Dayton is one of many law schools that dole out scholarships based on information included on applications for admission: LSAT scores, undergraduate GPAs, and the like. Other schools require prospective students to file separate scholarship applications with their applications for admission. Prospective students at Drake University Law School, for example, are considered for the Dwight D. Opperman full-tuition scholarship when they complete separate applications for admission and merit-based aid. The key to ensuring that you have the best chance to win that money is to apply as early as possible.

But as with federal aid, be aware that a change in your financial status during your three-year stint can negate your eligibility. One veteran attorney got married the day after her first-year final exams at Harvard Law School. She returned from her honeymoon to find a letter from HLS congratulating her on her recent marriage-and revoking her scholarship since she was now part of a "family unit" with income.

Law students hoping to get their hands on other sources of scholarship money often must be aggressive and persistent in their quest to find the bucks. Popular Web sites to check out include the Sallie Mae CASHE Free Scholarship Search, FastWeb, and wiredscholar.

Jobs
The American Bar Association only lets law students work 20 hours per week while they're in school. Though the origins of that standard are "lost in history," it remains firm, says Barry Currier, the ABA deputy consultant on legal education. "The reason for the rule is pretty self-evident-law school is a serious enterpriseand takes a substantial part of a person's energy and time. If you're going to be doing it full-time, you need to be doing it full-time."

Find a law student with more time than that, and you've found a superhero-or someone who needs an academic priority adjustment. "It's naive for us in legal education not to think that students are under a good deal of [financial] pressure," Currier adds. "But it's also naive on the part of students to say, 'I'm going to work more and study less.'"

Still, for those willing to part with a few hours of precious study time, there are ample opportunities to temp or intern for pay. And some law school programs even feature part-time or flexible schedules, for students who work during the day.

Career services offices are notorious for filling students' inboxes with names of employers who need law students to lend their helping hands. If you'd like extra cash, these annoying notices can be saving graces. Whether you end up researching, helping in court, or doing errands, you'll probably make a decent hourly wage and learn the tricks of the trade. There are also federal work-study programs (based on financial need) that allow students to earn money by working around campus-in computer labs and libraries, as tour guides, or as teaching assistants, for example. Some summer jobs also offer work-study money.

Finally, third-years with job offers in hand often work part-time for their future employers. One 3L at Georgetown University earns approximately $525 each week at the firm where she will soon be an associate. A journal and a clinic kept her busy as a 2L, but her current course load of 14 credits leaves her with "plenty of time" to work at the firm and help her family's piggy bank grow.