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Federal Student Loans

The following loans, Federal Direct Unsubsidized and Federal Direct Graduate PLUS (also known as Grad Plus), are offered to Law students who are U.S. citizens, permanent residents, or eligible non-citizens. Funds for these loans, which fall under the William D. Ford Federal Direct Loan Program, are appropriated by the U.S. Congress, administered by the Department of Education, and disbursed by the institution the student attends. Eligibility information can be found on the Federal Student Aid website.

Both loans require a student to file the Free Application for Federal Student Aid (FAFSA) to establish eligibility and to enroll at least half-time and neither one requires the borrower to demonstrate financial need. The Department of Education assigns a loan servicer to the borrower when the funds are disbursed and that servicer sends regular interest statements to the borrower and can advise the borrower when and if interest will be capitalized (added to the principal borrowed balance). Further, both loan programs allow the borrower to pay off the loan early with no penalty.

To finalize federal student loan funding, students must complete both a promissory note for each loan program as well as an entrance counseling session the first time he or she borrows federal loan funds as a graduate student. The Graduate PLUS loan also requires a separate application with the Department of Education. The student will be notified of all of these requirements by the Financial Aid Office.

Students receive an automatic deferment and are not required to make payments on their federal student loans while enrolled in school at least half time. An exit counseling session must be completed when the borrower graduates or drops below half-time enrollment. The Financial Aid Office will follow up with students when the exit counseling session must be completed.

You can find more information about available federal student loan options on the Federal Student Aid website.

Federal Direct Unsubsidized Loan

  • A Law student may borrow up to $20,500 annually. The aggregate limit for this loan is $138,500 including graduate and undergraduate debt.
  • A credit check is not necessary to apply for this loan.
  • The loan has a “fixed variable” interest rate, established each year by June 1st, effective on July 1st of that year. (A “fixed variable” rate means that a new interest rate will be set each year, but the rate will be fixed for the life of the loan for any loans first disbursed between July 1st of that year and June 30th of the next year. As a result, this may mean that upon graduation the borrower will have a set of fixed-rate loans, each with a different interest rate.)
  • The student accrues interest while in-school and during the 6-month grace period after separation or if student falls below half-time status.
  • The student can either pay the interest while in-school or allow it to accrue.
  • Each loan includes an origination fee charged by the Department of Education. The origination fee is a percentage of the amount of the loan and is deducted at the time of each loan disbursement. The borrower is responsible for repaying the total sum borrowed.
  • The loan carries a 6-month grace period which begins six months after the student graduates, leaves school, or drops below half-time enrollment. Once the grace period ends, the student will begin repayment.
  • Multiple repayment options are available for Unsubsidized Loan funding. A borrower who chooses the standard repayment plan must repay the loan within 10 years, and this is the default repayment plan. There are other repayment options plans available, including other fixed repayment plans as well as income-driven repayment plans. Information about repayment options is available on the Federal Student Aid website.

Federal Direct Graduate PLUS Loan

  • A Law student may borrow up to the difference between the cost of attendance and other financial aid (including scholarships, employer-provided tuition reimbursement, the Federal Direct Unsubsidized Loan, and any other resources available to the student).
  • Unlike the Federal Direct Unsubsidized Loan, a credit check is required for the PLUS loan and the borrower cannot have adverse credit history.
    • Adverse credit history is defined by the Department of Education. The adverse credit history check does not use any kind of debt-to-income ratio or credit score.
    • If you have a credit freeze on your credit reports, you will need to lift or remove any freezes from your credit file at each credit bureau before beginning the PLUS Loan Application.
    • A borrower with adverse credit history can still borrow the funds with a qualified endorser (co-signer) or appeal the credit decision with the Department of Education. In these cases, additional PLUS Credit Counseling and a new promissory note may be required. It is important to note that the endorser agrees to repay the loan if the borrower does not. The Department of Education and the Financial Aid Office will send the student more information about these options as applicable.
  • This loan has a “fixed variable” interest rate, just like the Federal Direct Unsubsidized Loan.
  • The student accrues interest while in-school and during deferment and forbearance periods.
  • The student can either pay the interest while in-school or allow it to accrue and capitalize on the principal loan amount when the loan goes into repayment (which means that the interest will be added to the principal balance of the loan).
  • Each loan includes an origination fee charged by the Department of Education. The origination fee is a percentage of the amount of the loan and is deducted at the time of each loan disbursement. The borrower is responsible for repaying the total sum borrowed.
  • The student will receive an automatic deferment for an additional six months after they graduate, leave school, or drop below half-time enrollment. Once the deferment period ends, the student will begin repayment.
  • Multiple repayment options are available for Graduate PLUS Loan funding. A borrower who chooses the standard repayment plan must repay the loan within 10 years, and this is the default repayment plan. There are other repayment options plans available, including other fixed repayment plans as well as income-driven repayment plans. Information about repayment options is available on the Federal Student Aid website.

Note that the federal student loan programs can change at any time due to federal legislation or regulations.