For most students the major portion of law school costs are met through the Federal Stafford Loan, Federal Graduate PLUS Loan, and alternative educational loan programs.
Generally, to be considered for an educational loan as a law student, you must:
- Complete the Free Application for Federal Student Aid (FAFSA)
- Be a U.S. Citizen, permanent resident, or other eligible non-citizen
- Enrolled at least half-time in a degree program
- Registered with the Selective Service, if required
- Not owe a refund on a federal grant or be in default on a prior federal loan
- Maintain Satisfactory Academic Progress.
Before federal loan funds can be released, all incoming students must complete a Stafford Loan Entrance Counseling session, regardless of whether they have borrowed in the past. This counseling session is a federal requirement for all students to insure that they understand their rights and responsibilities as a borrower. Loan counseling can be completed online at www.studentloans.gov.
All students who have borrowed through the Stafford Loan Program are required to attend a Stafford Loan Exit Counseling session before they graduate or drop below half time. The counseling sessions will be schedule in April for all third year students. All third year students will receive notification of the time of the counseling sessions. The counseling sessions informs students of their rights and responsibilities as a borrower as well as giving students information on their repayment options.
The University of Pittsburgh participates in the William D. Ford Federal Direct Loan Program exclusively for the Federal Stafford and Federal Grad PLUS Loans. The lender for the Direct Loan Program is the U.S. Department of Education. More information concerning the William D. Ford Federal Direct Loan program can be found online at www.studentloans.gov.
The Stafford Loan is the most widely used loan and is regulated by the U.S. Department of Education. The Stafford Loan is a guaranteed student loan and is NOT based on credit.
Features of the Stafford Loan:
- Subsidized Stafford Loans are loans for which the federal government pays the interest while the student is in school and through the six month grace period. Eligibility for the subsidized loan is based on the information provided on the FAFSA. Beginning July 1, 2012, graduate and professional students will no longer be eligible to receive subsidized Stafford Loan funds.
- Unsubsidized Stafford Loans are loans for which the interest subsidy is not available and the student is responsible for the interest on the loan from the time the loan is disbursed until it is completely repaid. Students have the option to either pay the interest on a monthly/quarterly basis or to capitalize the interest. It is strongly recommended that a student pay the interest on the loan whenever possible.
- Interest rates are fixed for the life of the loan. The fixed interest rate is determine each year by July 1st. Direct Unsubsidized Loans disbursed for the 2015-2016 academic year have a fixed interest rate of 5.84% for the life of the loan.
- Origination Fee is the fee that is deducted from the loan proceeds prior to the loan disbursement. An origination fee of 1% is deducted from the Stafford Loan prior to disbursement.
- Loan Limits for graduate students are $20,500 annually. The maximum aggregate loan limit is $65,500 subsidized and $138,500 total subsidized and unsubsidized combined for graduate students.
- Repayment of the Federal Stafford Loan begins 6 months after students cease to enroll at least half-time or graduation. Students can take up to 10 years to repay the loan and alternate repayment options are available that may extend your repayment term. Deferment and forbearance options are available for special circumstances.
The Federal Graduate PLUS Loan program is a federal loan program available to graduate students. This is a federally backed loan that is based on a simplified credit check criteria. Features of the Graduate PLUS Loan:
- Interest rates are fixed for the life of the loan. Interest on this loan will accrue while in-school. Students have the option to either pay the interest on a monthly/quarterly basis or to capitalize the interest. It is strongly recommended that a student pay the interest on the loan whenever possible. The Graduate PLUS loan interest rate is fixed at 6.84% for loan processed for the 2015-2016 academic year.
- Origination fee of 4% is deducted from the loan proceeds prior to the loan disbursement.
- Credit analysis is less stringent on this loan and there is no debt to income consideration as opposed to private educational loans. If denied there is the opportunity to have an endorser (co-signer) apply.
- Loan Limits are based on the students cost of attendance minus all financial aid received. There is no aggregate limit amount.
- Repayment of this loan begins 60 days after the loan has disbursed. However, the loan servicer will automatically place the loan on in-school forbearance until 6 months after the student drops below half time or graduation. Students can take up to 10 years to repay the loan and alternate repayment options are available that may extend the repayment term. Forbearance options are available for special circumstances.
- Consolidation is available on the Graduate PLUS loan. This loan may be consolidated with all other federal loans that the student holds.
Various agencies offer private student loan programs to law students. These programs are often offered by commercial banks and other lenders and are not funded by state or federal financial aid funds. The terms of lending, maximum loan amounts, schedules for repayment, interest rates, fees and qualifications are determined by each organization.
Students are strongly encouraged to consider the federal student loans and compare interest rates, fees, and repayment options such as deferment and forbearance of all loans. Other considerations when deciding on private loans are as follows:
- Apply with a credit worthy cosigner- Applying with a co-signer may provide you with an increased chance of approval and a more competitive interest rate.
- Do your research. Ask questions of your lender and find out which loan will benefit you the most.
- Know the interest rates, fees, and repayment terms before completing the application and promissory note.
- Monitor your total indebtedness. Check your credit report annually.
You have the right to select the private lender of your choice. FASTChoice allows you to compare lenders that Pitt Law students have used in the past. Neither the University of Pittsburgh nor the Financial Aid Office intends any specific endorsement, recommendation, or promotion of these products by including the lenders on this list. A private loan is an agreement between the borrower, co-signer (if applicable) and the lender. These private or alternative loans are available as an in-school funding option. Private and alternative loans are available in the amount of the difference between financial aid awarded ($20,500 through the Stafford loan and any scholarships you may have been awarded) and the Law School's cost of attendance. Approval of these types of loans are based on a credit check, therefore, we recommend checking on your credit status by obtaining your credit report before applying.
Bar exam loan programs are available to graduating law students and recent law school graduates to assist with the expenses related to the bar examination process. Bar exam loans are private loans offered by various lenders. FASTChoice allows you to compare and apply for bar exam loans. Consideration should be given to interest rate, fees, and repayment terms when choosing a bar exam loan provider. Students are strongly encouraged to utilize any federal funding available during their final year in school before considering the bar exam loan.