Loan Assistance

Federal Loans

Stafford Loans

The Federal interest rate for Stafford Loans for the 2008-09 year is 6.8%; effective July 1, 2008 through June 30, 2009.

The subsidized Stafford Loan is the second most attractive type of loan for law students because the federal government pays the interest on the loan while a student is in school and because the interest rate is capped at 6.8% for the life of the loan. The maximum annual amount of the subsidized Stafford Loan is $8,500. Results of the FAFSA determine whether a student qualifies for this full amount or only a portion of the maximum.

The unsubsidized Stafford Loan also is available to law students, though the federal government does not pay the interest (6.8%) on this loan while a student is enrolled in school. The maximum annual unsubsidized Stafford Loan is $20,500 (less whatever amount a student receives in the form of a subsidized Stafford Loan).

Graduate PLUS Loan

The Federal Direct Graduate PLUS Loan is a federal loan available to graduate and professional students. The Grad PLUS loan is based on educational costs and not on financial need. This loan, in combination with other aid, cannot exceed educational costs as determined by Ohio State. Borrowers must be U.S. citizens or eligible non-citizens enrolled at least half-time. To receive this loan, students must complete the Graduate PLUS form and pass a mandatory credit check by the Department of Education. The current fixed interest rate is 7.9%.

FAFSA Form

Ohio State is a participant in the federal direct-lending program. Consequently, the FAFSA form serves as the loan application for the the Stafford and Graduate PLUS Loans.

The FAFSA should be filed as early as possible after the FAFSA form becomes available in early January. At the very latest, the FAFSA should be completed by March 1. (NOTE: completion of the FAFSA relies upon tax information for the year just ended; hence, borrowers are encouraged to have their taxes filed before completing the FAFSA. The FAFSA may be completed using estimated income for the year; however, this may result in the individual being selected for verification.)

The Impact of Significant Debt

The issue of loan indebtedness is extremely important since the repayment of student loans may significantly impact the career options that a student or graduate may consider. Law students are encouraged to consider the consequences of borrowing by projecting the percentage of expected income that will be devoted to loan repayments. Generally speaking, loan repayments should not exceed 15 percent of net income.

Law students who rely on loans are strongly encouraged to calculate the monthly repayment of loans, given the amount borrowed, the interest rate, and the period of repayment.