Up to $8,500 per year in subsidized Stafford loans may be awarded to students who meet the need criteria, which is typically determined by each school. Interest does not accrue on subsidized Stafford loans while a student is in school, and stays frozen for a six-month grace period immediately following graduation. As of 2010, Stafford loans are at a fixed 6.8% interest rate
Law students can borrow up to $20,500 through a combination of subsidized and unsubsidized Stafford loans. For example, if a student took out $4,000 in subsidized Stafford loans, she would only be eligible for $16,500 in unsubsidized Stafford loans. Interest does accrue on the unsubsidized Stafford loans, also at a fixed 6.8% interest rate.
After Stafford loans, scholarships, and personal savings have been considered, students may take out GradPlus loans. These are federal loans that come with a 7.9 percent interest rate if the student borrows from the Ford Federal Direct loan program and an 8.5 percent interest rate if they borrow from any other lender. The interest rate is fixed for the term of the loan and interest does accrue while the student is still in school.
Private loans are available to students who need additional funding or are ineligible for federal loans. These loans, which are available from many different lenders, typically offer a higher interest rate than federal loans. Some students take out private loans for expenses associated with sitting for the bar exam, which typically follows graduation from law school.
The 2007 College Cost Reduction and Access Act caps federal loan repayments at 15 percent of the borrower's discretionary income and forgives the remaining principle and interest after 25 years of repayment. If the student pursues public-interest law after graduation, the remaining principle and interest are forgiven after 10 years of repayment. Note that the CCRA Act only applies to federal loans; private loans are not covered.
Graduates who pursue public-interest careers may be eligible for financial assistance from a Loan Repayment Assistant Program (LRAP). Terms and conditions vary by school, but generally these types of programs will forgive a certain percentage of the graduate's loans for each year that they work in "qualified employment" (a term that is also defined differently from school to school). LRAPs can be an attractive option for students who wish to pursue public service.