How to Negotiate Law School Financial Aid

Trying for more aid before and after law school could save you thousands of dollars.

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Negotiating a suitable financial aid package with a law school is much different from the process you underwent when financing your undergraduate education. For undergraduates, financial aid grants may bey awarded based primarily upon your demonstrated need when entering school. This is often not the case in law school. 

In the last five to 10 years, a new trend has emerged in law school financial aid. Rather than awarding need-based grants by examining your financial need as a first year student, or 1L, law schools are doling out these awards much later, based on your financial need after you graduate.

[Read about three more emerging law school trends.]

Through increasingly popular loan forgiveness programs, law schools typically ask students with financial need to take out loans to finance most of their legal education. Law schools then look at how much money each student is making after graduation and, for those students making below certain thresholds, the schools repay part or all of their tuition debt.

So, if you are looking for significant need-based financial aid on your way into law school, you are now less likely to be successful. To earn financial aid grants and help defray the high costs of legal education today, you should instead focus on securing merit-based awards. Here are two things you can do:

1. Plan ahead: This trend means that everyone entering law school who has financial need and does not secure a merit-based award is strapped with loans. The schools facilitate federal loans like the Stafford and Perkins loans. Then, if you have need that exceeds the federal limit, you can take out private loans, either with the school's preferred lender or a lender of your choice.

[Find out why private loan borrowers might need more protection.]

If you take this route, three years later, you will graduate law school with significant debt. If you decide to take a public interest or public sector job, which traditionally come with lower salaries, your law school will likely repay at least part of your loans for the next 10 to 15 years, depending on the details of its law forgiveness program and assuming you continue to have financial need throughout the duration of the 10- or 15-year period.

On the other hand, if you start working at a top law firm in New York City, where the starting salary is currently $160,000, you will not receive help from your school in repaying your loans, even if you had significant financial need coming into law school.

As a result of this new financial aid structure, it's critically important to plan ahead and calculate what funds are available to you both before and after graduation.

2. Go for merit-based aid: While securing need-based aid at the early stages of your law school journey is now a much less viable strategy, you can still minimize the loans that you will have to pay back after graduation right now by focusing on securing merit-based aid. 

The key is to apply to law schools that have a reputation for offering significant merit-based aid (even if you are not sure you would want to attend these schools). If and when these schools offer you aid, you can parlay these offers at other schools, in order to try to convince them to offer you merit-based grants as well. I have successfully advised hundreds of clients in saving tens of thousands and even hundreds of thousands of dollars each by leveraging this strategy. (In addition to money off tuition, some schools might offer free housing and other stipends, and student recipients can save an enormous amount by not having to take loans.)

[See which public law schools award the most financial aid.] 

The process of negotiating between schools is delicate, and you must be very careful in how you communicate with law schools regarding merit-based offers. If you take the right approach, though, you can save yourself tens or hundreds of thousands of dollars in tuition and interest. Going from no aid at all to $10,000 in grants per year, or from $10,000 to $30,000 off, makes a monumental difference in your total law school cost over a 10- to 15-year repayment period.

If you are seeking guidance through the process, seasoned experts can help to ensure you do not risk offending the school in any way, which could jeopardize your admissions status.

What do you think about law schools distributing need-based aid after graduation instead of before you enter school? Let me know in the comments below, E-mail me at shawn.oconnor@stratusprep.com, or contact me via Twitter at @stratusprep.

Check back next Monday for the next installment of Law Admissions Q&A to read my advice to real applicants. For a chance to be featured, please E-mail me your profile and question.