Note: While this series focuses on law students and legal education, the changes outlined apply to all graduate and professional programs and degrees. There is a slight modification for certain medical-related programs, but that is beyond the scope of these discussions.
Right now, you have several options to use federal loan money to pay for your degree. The two most common sources of funding for law students are the Direct Unsubsidized Loan and the Direct PLUS Loan, commonly known as a Grad PLUS loan.
As a law student, you can borrow up to $20,500 per year in unsubsidized loans (up to $138,500 in total). However, if you need additional funds to cover your educational expenses, you can borrow under the Grad PLUS program, which allows you to borrow up to the “cost of attendance.”
In short, you can currently pay for your law degree using only federal loans, without having to take out a private loan. This is advantageous because there are substantial benefits associated with borrowing from the federal government, including loan repayment options and potential loan forgiveness. Using the federal loan programs isn’t for everyone, but the vast majority of law students currently use these programs for good reason.
But these programs could be going away if the House higher education bill, known as the PROSPER Act, becomes law.
The PROSPER Act seeks to consolidate all of the federal loan programs into a new ONE Loan program. For law students, federal loans would be capped at $28,500 per year with a $150,000 aggregate limit. That’s it!
That means if financing your legal education costs more than around $30,000 a year, you must find additional funding sources to pay for it. You will have to take out a private loan, use a credit card, borrow from your family, or find some other way to pay for school. Or… the credit approval process for a private loan and lack of income-based repayment options could mean that many students simply could not afford to go to law school.
The ONE Loan program also eliminates many of the benefits current Direct Loan borrowers receive, including meaningful loan forgiveness and manageable monthly repayment amounts. All of this means you will have to deal with a MORE complex system and pay MORE for your education than you do under the current program!
But you can do something about it:
The U.S. Senate is currently engaged in a debate about changes to higher education law. You can have a major influence over how changes to higher education will work in the future.
Call your members of Congress to let them know how these changes proposed in the PROSPER Act would negatively impact you and other law students. Let them know that you expect policies that protect borrowers and make education less burdensome and less expensive!
We have resources to help you contact your Senators and Representatives. Check out the student page of our #MakeTheCase Advocacy campaign.