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Published: October 1, 2020

Prelaw students needing to borrow money to attend law school traditionally consider three types of loans: Direct Loans, Direct PLUS loans, and private loans. These loans differ on a number of terms.

Federal Student Loans

Direct Lloans are fixed-rate loans provided by the federal government to students attending graduate school at least half-time. Currently, only unsubsidized Direct Loans are available for graduate students, who may borrow up to $20,500 a year at a rate equal to the 10-year Treasury yield plus 3.6% (capped at 9.5%). Interest accrues from the time the loan is disbursed until the time the loan is repaid in full, but no payments are required until six months after graduation. There are no interest subsidies. Additional details available on the Education Department's website.

Direct PLUS Loans are fixed-rate loans provided by the federal government to students attending graduate school at least half-time. Unlike Direct Loans, these loans have no limits and students may borrow up to the full cost of attendance (as defined by each school), less any other financial aid they have secured at a rate equal to the 10-year Treasury yield plus 4.6% (capped at 10.5%). Interest accrues from the time the loan is disbursed until the time the loan is repaid in full, but no payments are required until six months after graduation. There are no interest subsidies. Additional details available on the Education Department's website.

Private Student Loans

Private loans are generally inadvisable because they usually have less flexible payment plans and forbearance periods than federal government loans. Private loans can be obtained at either fixed or flexible interest rates that vary according to your personal credit score. The amount you may borrow will be up to each lender.