A Day in the Life

Summer Funding for Public Interest or Government Work

Last week, we posted a story about a new International Human Rights Program here at Chicago. Students will not only be able to work in places such as New Delhi, Sydney, and London, but the Law School will also provide funding for them to do so. Our Heerey Summer Public Interest Fellowships are one such source of that funding. The great thing about our program is that students can work in a wide variety of jobs - from one of these new positions abroad to the AG's office in New York. In fact, any position that involves legal work for the public interest, a non profit, or governmental organization could qualify for funding. The only caveats are that students need to work full-time for at least 4 weeks in their qualifying position and they need to make less than $1200 per week. In return, students receive a $6,000 partially forgiveable loan: $3,000 of it is forgiven when they complete their 1L summer work and the remaining $3,000 balance is payable over a year later, after they have had a chance to make serious cash at a firm their 2L summer. For 2Ls who decide to work in the public interest again their second summer, they could have the entire $6,000 forgiven. A large number of Chicago students use this funding each summer to pursue the summer job of their dreams. We have funded students working abroad and in states from Alaska to California and New York. As you research law schools, I encourage you to think about your employment prospects and the financial support that different schools provide. In future posts, I will also provide information on our Hormel Public Interest Program - another great source of support for our graduates who want to go into public service and government work.

Show Me the Money!

At the Chicago Forum this past weekend, we had a whole lot of questions about financial aid and scholarships. So, I thought I would take this opportunity to address the way we award scholarships here at U of C and how you can make sure you are being considered for them!

Last year we awarded 59% of the entering class with merit and/or need based scholarships.  Here at Chicago, one of our priorities is to make sure we can help support as many students as possible and so we spread our scholarships very wide.  Our scholarship award letters will follow closely after admission and contain one large scholarship award amount, to be spread over your three years here at U of C.  The benefit of this for you is that you don’t have to worry each year about re-qualifying for your scholarship; there is no pressure to maintain a certain grade point average, nor do you have to remember to re-apply for your scholarship or risk losing it!

Everyone who is admitted to U of C is automatically considered for merit based scholarships; you do not need to fill out a special application.  Instead, we make decisions for merit aid based upon your admissions application in its entirety.  This means that scholarships are not determined solely by your LSAT score and GPA.  Yes, it is that “holistic review process” again!

To the extent that you want us to consider your financial need when awarding scholarships, however, you can elect to fill out the Need Access form online.  Again, this is only IF you want us to consider financial need.  The Need Access form must be filled out and submitted online by March 1.

I also had several questions about whether or not we awarded “Diversity Scholarships” or “Scholarships for Minorities”. Here at Chicago, we do not divvy up the pots of money and say “amount X is for these people” and “amount Y is for those people”.  Instead we make ALL of our admits candidates for scholarship money. Everyone is considered, minority or not, “diverse” or not.  I hope that admitted students take comfort in this approach.

Recruitment in Atlanta

Did I mention that I love the south? I just got back from recruiting in Atlanta last week and I’m already looking forward to going back next year! Last week I visited Morehouse College, Emory University, and attended the LSAC forum for two days.

At Morehouse I was part of a bustling outdoor community service fair. Despite some of the confusion, the setting was a great segue into talking about Chicago’s public interest offerings. We have 12 clinics including:

• Appellate Advocacy Project
• Criminal and Juvenile Justice Project
• Employment Discrimination Project
• Exoneration Project
• Housing Law Project
• Immigrant Children’s Advocacy Project
• Police Accountability Project
• Poverty and Housing Law Clinic

We also offer significant public service support in the form of funding. For example, we provide partially forgivable loans to 1Ls who want to work in government or the public interest after their first year of law school. Last year we loaned up to $6,000 per student in the program and will be forgiving $3,000 of that amount. As those of you who work in public interest know, those jobs usually don’t pay very much, so every little bit of help with living expenses makes a difference! We also have a generous loan repayment assistance program (HPIP) for alums who choose to go into public service, non-profit, or government work. For the Class of 2012, you can receive up to $10,000 per year from the Law School if you are making less than $60,000 at your public interest job.

At Emory the Pre Law Society had set up a panel of 7 schools to answer questions and discuss different parts of the application process. The event was well attended and I was so pleased with the quality of the students and their questions – not once did I have to answer what our median GPA and LSAT scores were! Even at the LSAC Forum, the questions were more substantive and the steady stream of prospective students kept me on my toes!

One difference I’ve noticed while on the road is that this year in particular, applicants are very concerned about financial aid and scholarships. Here at Chicago over half the incoming class is typically awarded scholarship funds. Our scholarships are both merit and need based and every applicant who is admitted is automatically considered for aid. To the extent that you wish to have us look at your financial need, we ask that you fill out an online Need Access form. Even for students who don’t receive scholarship aid, you are almost certain to be able to finance law school through loans, both federal and private. Law School is a big investment, but one that is well worth it, and students who graduate from Chicago have fantastic employment prospects. Our alums work all over the country and even internationally and yes, even back in Atlanta!

Next week I will be recruiting in New York so I hope to meet more of you there!

Law Firms and Money

Along with reading files and making financial aid decisions, as Director of Financial Aid, it is also my job to help students organize their finances to reach their goals. That effort includes lots of individual counseling, distribution of (hopefully) useful information, and periodic presentations.

Last week, Mary Beth Wynn and I put on a presentation directed at 1Ls and 2Ls working at large law firms this summer. Roughly a third of our 1Ls, and most of our 2Ls work at law firms in the summer, so the turnout was high (free lunch might have helped too...) Mary Beth focused on the career goals of such a summer, while I discussed some of the financial aspects.

As you may have heard, Law Firms have been raising starting salaries. While this is (mostly) good news for students, it is important not to start spending this income before you earn it. The goal of my presentation was to help students understand how a summer job at a law firm can shape their law school finances, and to remind them they are still students. By living reasonably and saving as much as they can during the summer, a smart student can greatly minimize the debt for their following school year. Unfortunately, students sometimes fail to realize this, and use their summer as a time to live like a lawyer and buy unnecessary things. I remember my days as a summer associate, and it is certainly tempting to live lavishly after scrimping by on a student budget. Students who avoid this temptation, however, are in a much better financial position when considering the myriad  pportunities our students have. 

The powerpoint slides from the presentation are available online at http://www.law.uchicago.edu/prospective/financialaid/presentation.ppt. 

The Hierarchy of Student Debt

Now that the holidays are here, I hope you are relaxing with a glass of egg nog and a good book. While you are (hopefully) relaxing, here is some information on a topic students find a bit stressful: student loans!

Law Students everywhere rely upon student loans to fund the bulk of their education, both tuition and living expenses (see our student budget here). There are many different types of loans however, and some are better than others. So here is my list of the various loans, from 'best' to 'worst', in my humble opinion.

There are two main types of loans, 'fixed rate' and 'adjustable rate'. Fixed rate loans have an interest rate that stays the same for as long as you have the loan, whereas 'adjustable rate' loans have an interest rate that changes every few months based on the economy and other factors.

There are also 'subsidized' loans offered through government programs that offer special advantages other loans do not, such as being cancelled if you enter certain careers. Depending on your situation, these advantages may be wonderful or irrelevant, but usually they are good to have, just in case.

Here are the main loan types, from best to worst:

1. Parental or Family Loans: This is a loan from a family member, maybe a grandparent, parent, or other relative, and this is the best loan available. It is usually worth talking to your parents, relatives, or others, to see if they are interested in loaning you some money for school. These loans are great because they are flexible, low (or no) interest, and you know the lender well. This is not a great option for everyone, unfortunately.
2. Federal Perkins Loans: These loans are need-based loans of up to $6,000 per year at a fixed interest rate of 5%. You qualify for these loans by filling out a FAFSA which details your finances. Unlike college, for grad school you do not have to list your parental information. During school, the government pays the interest on these loans for you, so you only start paying interest after graduation. 
3. Federal Stafford Subsidized Loans: These loans are for up to $8,500 per year at a fixed interest rate of 6.8%. You qualify for these loans with the FAFSA, and the government also pays the interest on these loans while you are in school. This is a very good option, and may get even better if the new Congress follows through on its promise to lower the interest rate to 3.4%. So write your congressperson!
4. Federal Unsubsidized Stafford Loans: These are similar to the Subsidized Stafford loans, but with two differences. First, interest on these loans will accrue while you are in school, which makes them much less attractive. Second, you can borrow up to $10,000 per year of this loan, or more if you don't qualify for Subsidized Stafford loans. A nice thing about Stafford loans is they are not credit-based, so even if you have horrible credit (and are a US Citizen or permanent resident) you still can get these loans.
5. Grad PLUS loans: New this year, graduate students can take out PLUS loans, which used to be just for parents. These are fixed-rate loans, the rate depends on the lender, but is usually between 7-8.5%. These loans have fees of 3-4%, and are credit based, so make sure and know your credit history!
6. Private or 'Alternative' Loans: These are student loans from a bank, and have variable interest rates, depending on the economy (bad economy usually means lower interest rates) and your credit score. Generally, the lower your credit score, the higher the interest rate, but even with a great credit score, rates on these are 7-10%. Some of the big lenders for these loans are Citibank and Access Group.
7. Credit Cards: Credit cards typically have terrible interest rates compared to the loans mentioned above. The rates run from 13% to 24%, plus fees, and require monthly payments while in school. This is obviously not a great way to pay for school, but some students use their credit cards to pay for at least a portion of their expenses.

Well, that's pretty much all the loans we deal with at Chicago. As you can see, there is a wide variety of options for students, some of which are much better than others. Part of our mission is to help our admitted and current students understand their options and pick the loans that are best for their situation and goals.

Financing Your Education

While certainly not the most exciting topic (except maybe to me!) Financial Aid is a crucial aspect of  law school. Law School is very expensive, and you owe it to yourself to understand your options to avoid the debt trap that many lawyers fall into. In this post, I hope to give you a general idea of how people pay for law school, and some things to think about. Later I will have more detailed, thrilling posts about things such as LRAPs, loan consolidation and budgeting, so stay tuned!

Students pay for Law School with four main resources: loans, scholarships, employment earnings, and family/personal contributions. Your goal as a student is to minimize your expenditures and your loans, because loans are clearly the worst of these four options.

Scholarships are the best way to pay for law school, so let's discuss them first.  Most law schools offer a combination of need-based scholarships and merit-based scholarships, but some only offer one type, so make sure to check with your schools! Need based scholarships are based on you and your family's financial situation, and require an application like the Need Access report, which Chicago and other schools use. These applications summarize your income and assets, and show us what kind of resources you have for law school. Merit-based scholarships are based on your application, and schools use these awards as ways to encourage you to come to their school. Schools use vastly different criteria for  merit scholarships, so check with the schools for details. There are also lots of outside scholarships, like our Tony Patino Fellowship. Do some research and try to find scholarships that match your background or interests. 

Sadly, very few students are lucky enough to get a full-ride scholarship at their dream school.  For most, loans are what pays for law school. Students use Federal Stafford loans of up to $18,500 to cover part of the cost of law school, and then private loans cover the rest of their expenses. Federal loans have a fixed interest rate (6.8%) and have other favorable terms, while private loans have higher, adjustable interest rates (based on market factors) and are also credit-based, so make sure your credit is strong!

While loans are obviously not the ideal way to pay for law school, bear in mind that different schools provide different options professionally. One law school may help you get a job that pays more money, and thus makes loan repayment much easier. More importantly, if your dream school admits you, but does not offer as much money as 'School X,'  don't be afraid to chase your dream!