So now that you have the basic types of loans, how exactly are loans disbursed and what do you have to do for each of them? I’ll go over a basic loan amount from a school and what exactly you have to do with the loans you have been offered:

This would be the basic profile you are given by your law school upon being admitted. Now it looks complicated, but basically everything is already locked in for you except for the Optional Loans. Your grants/ scholarship will automatically be credited, as will the regular Federal loans such as Perkins and Stafford. In this example you would not be making any payments for the above amounts (except perhaps for the optional loan which is discussed later) but interest WILL be accruing on your unsubsidized loans.

Thus $10,000 is given to you, $11,000 is a subsidized loan with no interest while you are in school, and the last $12,000 will accumulate interest at 6.80% starting immediately.

1. Decide how much of the Optional Loans you want to borrow. You may not want to accept the full loans offered by the school if you think your cost of living isn’t as high as their estimates. 2. Pick between going with GradPlus Loans or Private Loans. (Discussed in C.) 3. Apply for your chosen loan. (Discussed in C.)

This choice is usually the best option for many people, but is not always the cheapest option. GradPLUS is often chosen because of the built in benefits and the reduced risk from a fixed interest rate.

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Stafford Loan- $12,000 Optional Loans- $30,000

Here I will walk through the Pros and Cons of either program and help people decide if they definitely should choose GradPLUS or perhaps consider private loans.

The GradPLUS loan has built in deferment, forbearance, and cancellation due to permanent disability or death due to laws governing the Federal programs. Lees verder →