If free financial aid won’t cover all your law school costs, opt for federal student loans before private loans.
Summary of Best Law School Loans of January 2020
Our pick for
All borrowers as a first option
Programs like income-driven repayment and Public Service Loan Forgiveness make federal student loans best for those who plan to go into public interest law or government — or who want to keep their options open.
Our picks for
Private law school loans
These lenders offer loans with features designed to meet law students’ specific needs, like longer grace periods and deferments during clerkships or fellowships.
Our pick for
Graduate program loans
Law students can pay for school with graduate student loans. While these don’t tailor features to law students, they may offer better rates or overall features than loans that do.
Types of law school loans
Law students may be eligible for two types of federal student loans: direct unsubsidized loans and grad PLUS loans. Direct unsubsidized loans have a lower interest rate and fee, so take out those first. But there’s a limit to the amount of direct unsubsidized loans you can take, so you might need some grad PLUS loans too.
Some private lenders offer branded “law school loans” or loans for bar exam expenses. These have features that cater to law students’ specific needs — like deferring payments during a clerkship or fellowship. However, you can also use private graduate student loans for law school. Compare rates and features to find the least expensive option if you opt for private loans.
» MORE: How to pay for law school
Which law school loan is right for you?
If you’ve exhausted free aid like scholarships and are torn about which law school loan to borrow, take out federal loans.
Law students finish school owing an average of $145,500 in student debt, according to the National Center for Education Statistics. Federal loans offer more repayment options to handle that debt load, such as income-driven repayment plans, Public Service Loan Forgiveness and loan repayment assistance programs, known as LRAPs.
Private student loans may make sense — and save you money — if you don’t think you’ll need or qualify for those options.
For example, repaying $145,500 in grad PLUS loans with a 7.08% interest rate would cost $203,446 over 10 years. Opting for private loans with an interest rate of 5% would drop that amount to $185,191. The PLUS loan would also come with a 4.236% origination fee; most private lenders don’t charge an origination fee.
Monthly payments on that much debt would be roughly $1,500 for private loans and $1,700 for PLUS loans. Either amount might be unaffordable if you choose to be a legal services attorney, public defender or prosecutor, whose median starting salaries range from $48,000 to $58,000, according to the National Association for Law Placement. But with federal loans, income-driven payments at that salary would be $244, and Public Service Loan Forgiveness could erase the balance after 10 years.
Projected starting salaries are higher if you plan to practice in the private sector, with a median of $155,000 according to NALP. Wages rise even more if you join a Big Law firm. Still, opting for federal loans can protect you if you don’t land the job or salary you expect. And if you do, you can always refinance law school loans after graduating to recoup some savings.
Last updated on October 28, 2019
To recap our selections...
NerdWallet's Best Law School Loans of January 2020
- Federal Grad PLUS Loan: Best for All borrowers as a first option
- Sallie Mae Private Student Loan: Best for Private law school loans
- College Ave Private Student Loan: Best for Private law school loans
- Citizens One Private Student Loan: Best for Private law school loans
- Earnest Private Student Loan: Best for Graduate program loans