Financial Aid: Types Of Financial Aid

• School of Law Tuition Credit Loan
• Federal Carl Perkins Loan Program
• Federal Stafford Loans
• Federal Graduate PLUS Loan
• Private Loan Programs
• Private Bar Study Loans
• Deferments
• Loan Information Chart
• Choosing a Lender
• Loan Debt Management

School of Law Tuition Credit Loan

This is a university loan made directly to students who demonstrate exceptional financial need. A typical TCL award for the 2008-2009 academic year is $5,000. Repayment begins one year after the student graduates or leaves school. Interest accrues at the rate of five percent of the unpaid balance during repayment. This loan may require creditworthiness.

Federal Carl Perkins Loan Program

This is a federal and university loan made directly to students who demonstrate exceptional financial need. A typical award for the 2008-2009 academic year is $5,000. Repayment for first-time borrowers begins nine months after the student graduates or leaves school. Interest accrues at the rate of five percent of the unpaid balance during repayment.

Federal Stafford Loans

Subsidized

The federal government pays interest on a subsidized loan while students are in school at least half-time, during six month grace periods and during other authorized periods of deferment. Interest will begin to accrue when students enter the repayment period.

Unsubsidized

Interest on an unsubsidized Stafford loan begins immediately after the loan is disbursed. Students can choose to pay the interest monthly or have it capitalized to the principal at repayment. Graduate law students can borrow up to $20,500 from the Stafford Loan Program each academic year. (At least $12,000 of this amount must be in unsubsidized Stafford loans.) The aggregate maximum students may borrow from this program is $138,500. (No more than $65,500 of this amount may be in subsidized loans.)

Beginning July 1, 2006, interest rates on Stafford loans will be fixed at 6.8%. An origination fee of up to two percent and an insurance fee of one percent will be charged and deducted by the lender from each loan disbursement.

Federal Graduate PLUS Loan

This is a federally-guaranteed student loan to help meet the costs that exceed Federal Stafford Loan limits.  This loan carries a 3% origination fee and a 1% guarantee fee.  The interest on the Graduate PLUS Loan is fixed at 8.5%.  Eligibility is contingent on creditworthiness.

Private Loan Programs

There are several private loan plans tailored to help meet the cost of a graduate education. These private loans provide a source of credit for both full- and half-time graduate students whose educational funding needs exceed personal resources and assistance available through traditional programs. A sample interest rate is: Libor plus 2.45 percent. Students may borrow up to their unmet cost of attendance budget each academic year. Repayment of the principal and interest of the loan begins six to nine months after the student ceases to be enrolled at least half-time. These loans require creditworthiness.

Private Bar Study Loans

There are also Bar Study Loans available from various private lenders. Eligible borrowers can request up to $15,000 with approval subject to satisfactory credit history. Students can only borrow from one private agency for a Bar Study Loan. Most bar loans have variable interest rates, currently ranging from 5 to12%. Please visit the lender's website for information regarding guarantee fees, origination fees and repayment options. Note that you are eligible to apply for bar loans 1 year prior to graduation and 6 months after graduation.

Deferments

Students with prior outstanding student loans may qualify for deferment and/or forbearance provisions when these students are enrolled at least half-time in law school. Students must formally request a deferment or forbearance through the procedures established by the holder of the loan, and must continue making payments until notified that the deferment has been granted.

Loan Information Chart

Loan Type	Eligibility/Loan Limit	Interest Rate/Fee	Repayment / Deferment
Federal Carl Perkins Loan Program (Formerly NDSL)	U.S. Citizen or eligible resident. Awarded by USD Financial Aid Office. Must demonstrate exceptional financial need. Annual limit $5,000. Cumulative Perkins/NDSL borrowing limit of $30,000 including undergraduate loans.	5% fixed interest rate federally subsidized. No loan fees.	10 year repayment period. Deferment provisions similar to those of Federal Stafford Loan outlined below. Repayment begins nine months after the student is no longer enrolled at least half-time. The federal government pays the interest while the student is in school at least half-time and during the nine month grace period.
Federal Stafford Loan (Subsidized & Unsubsidized)	Currently enrolled in school at least half-time. U.S. Citizen or eligible resident. For subsidized loan, must demonstrate need as determined from the FAFSA. School certifies eligibility. Annual Maximum: Subsidized: $8,500 Unsubsidized: $20,500 (Less the subsidized amount) Aggregate Maximum: Subsidized: $65,500 Unsubsidized: $138,500 (Less the subsidized amount)	Interest rate is fixed at 6.8%. The lender may charge an origination fee of 2%. The guarantor may charge a maximum 1% Insurance Fee. The lender will deduct a portion of the total fees from each loan disbursement.	Repayment begins six months after student is no longer enrolled at least half-time. 10-30 year repayment period depending on indebtedness. Subsidized Stafford Loan: The federal government pays interest while student is in school at least half-time and during six-month grace period. Unsubsidized Stafford Loan: Interest payment begins immediately unless deferment is requested. The interest accrues and is added to the principal at repayment.
USD Tuition Credit Loan	U.S. Citizen or eligible resident. Awarded by USD Financial Aid Office. Generally must demonstrate financial need.	5% fixed interest rate. No loan fees.	10 year repayment period. Repayment begins one year after the student is no longer enrolled at least half-time. No interest occurs while the student is in school at least half-time and during the one year grace period.

Note: Loan criteria and interest rates may change without notice.

Choosing a Lender

When choosing a lender it may be best to focus on a lender that specializes in educational loans. The federal guidelines regulate the common features of the student loan program, such as interest rate and repayment terms. However, there are differences in the services that lenders provide. Some lenders retain ownership of the loan and service the loan themselves. Other lenders may sell the loan immediately after disbursement or transfer the loan to another holder, called a secondary market. Some lenders may not sell your loan, but may contract with an outside agency to service your loan account when you enter repayment. Some lenders may participate in only the Federal Stafford Loan Program, while others offer both federal and private or alternative loan programs. It is recommended that you borrow from one lender to simplify your repayment process and allow you to avoid making repayments to several different services and secondary markets.

Lenders offer a variety of repayment options. Some reward students who keep good repayment practices by offering discounts or reductions on the interest rates. USD has a list of recommended lenders. There are other lenders that provide federal funds and private loan programs from which students can choose.

Loan Debt Management

The decision to acquire any form of debt is a serious obligation. It is helpful to anticipate your funding needs and to continuously monitor your level of debt at any given time. You can make it easier to deal with this long-term financial obligation by implementing sound debt management practices. It may be helpful in determining a personal debt management strategy to consider the following.

• Analyzing income projections
  
• Estimate how far your paycheck will go after you graduate
  
• Consider your repayment options including loan consolidation
  
• Consider incentive repayment programs and stay current on your educational loans

According to federal law, some types of federal loans must offer graduated or income-sensitive repayment options. Under these plans, you may be able to make lower monthly loan payments for the first few years when your income may be limited. Payments are gradually increased over a period of years as your income rises. Another alternative to consider is consolidation of your federal loans. This option allows you to consolidate your federal loans into a single loan and reduce your monthly student loan payment by as much as 20% to 40% by extending the repayment period. However, by extending your repayment period you will incur additional interest charges. It is best to discuss the various repayment options with your student loan lender. The staff of the Financial Aid Office will provide various informational tools to thoroughly look at the advantages and drawbacks to federal loan consolidation. Consolidation options may also be available to refinance private/alternative educational loans depending on the lender.

For more information, see the budgeting section of our website.