All federal education loans are administered through the William D. Ford Direct Loan (DL) program. Under the DL program, the government or U.S. Department of Education serves as the students’ lender/owner for the life of their loans. All students who borrow through the DL program must complete the online ‘Entrance Loan Counseling’ when applying for the first loan at Whittier Law School. The DL program offers two types of loans: (1) Unsubsidized and (2) Graduate PLUS.
All loans are education loans that must be repaid. The DL Unsubsidized loan is not need-based and students are responsible for paying any interest that accrues while in school. Students have the option of allowing the interest to capitalize during enrollment, grace, and deferment periods. Students may borrow up to a total of $20,500 of Unsubsidized loan for each academic year. Students may borrow no more than $138,500 of combined Subsidized & Unsubsidized loans. Students may also make interest payments while in school.
The annual interest rate of the DL Unsubsidized loan is fixed at 5.84%. Regulations mandate a charge of 1.073% origination/default fee. The standard repayment schedule is 10 years; though, longer repayment schedules are available.
This loan is a credit-based federal loan program extended to graduate/professional students. Annual eligibility for the Grad-PLUS loan is limited to the total cost of attendance minus the sum of all other financial aid awards. Likewise, there is a deduction of 4.292% origination/default. The interest rate is fixed at 6.84% and there is no grace period before repayment. This means repayment term begins 60 days after the loan is fully disbursed. However, the option in-school deferment will automatically be granted to all students/borrowers during enrollment periods.
In general, the credit requirements for Grad-PLUS loans are minimal. However, the credit criterion does not allow adverse credit upon approval. This means a student/borrower must not have any debt more than 90 or more days past due, default determination, unpaid collection accounts, unsatisfied judgments, or any evidence within the past five years of bankruptcy, default or discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV student loan debt. There are no collateral requirements or income limitations on the Grad-PLUS loans.
Alternative or private loans are credit-based loans made available to students who are unable to finance their cost of education with the federal student loan programs. Alternative/private loans can be expensive due to the fluctuating interest rates and fees applied on the loan amount. Depending on the student/borrower’s credit score and borrowing history, most lenders charge a quarterly variable interest rate plus a supplemental loan fee at repayment. Although these loans are not based on a student’s need, other financial resources are always considered when determining the eligible amount for the loan. No combination of any financial assistance may exceed the total cost of attendance for each academic year.
Bar examination loans are offered to graduate candidates only. These are credit-based loans made available through various lenders to cover expenses for living and bar review courses following graduation. Certain restrictions apply, including the processing time before and after graduation, loan limits, and other credit criteria. All disbursements for the Bar loan are sent directly to the borrower.
For the purpose of debt management, the Law School restricts the certification of the Bar examination loan. Graduates may have multiple lenders for their Bar loans; however, the total of the multiple loans may not exceed the highest loan amount offered in the market. Before applying for a Bar loan, graduates are encouraged to meet with the Office of Financial Aid for advice on the terms and restrictions of the Bar loan.
Through the William C. and Selma B. Harris Memorial Fund, Whittier Law School is able to provide emergency short-term loans to students with immediate need. The loan can be accepted for up to $500, depending on the availability of funds, for a maximum 60-day term and bear no interest unless it is not paid by the due date. The loan is limited to one per student per academic year. Students must complete an application for the loan when applying. The emergency loan funds are available within 72 hours after the loan application is fully approved by all required parties and has been received by the Business Office.
Repayment of the emergency loan must be made to the Business Office. The maximum repayment period is 60 days after the application date, but cannot in any event exceed the student’s graduation date. In all cases, however, when the Business Office receives any other fund sources for a student who has the emergency loan outstanding, such funds will be applied first to the repayment of the loan.
Students must be currently enrolled at Whittier Law School to qualify for the Harris Memorial emergency loan fund. No emergency loans can be made before the first day of classes or after the last day of classes for any enrollment period. Funds in the emergency loan account are limited and in the event the loan funds are depleted, no loan can be made until funds are available.
The loan certification process at the Law School is in accordance with the Department of Education (ED) standards. It is a goal of the Office of Financial Aid to ensure students take advantage of all available federal loan benefits prior to obtaining an alternative/private loan. Thus, the federal Unsubsidized and Grad-PLUS loans will automatically be awarded in a student’s financial aid packet. Those who want private/alternative loans and/or do not qualify for federal loans must first meet with a Financial Aid Counselor for advice on alternative/private loans.
By regulations, loan funds are disbursed in two payments for the fall and spring semesters. Typically, financial aid loan funds will occur within 10 days prior to the first day of the semester or the enrolled program. The Office of Financial Aid will notify students of the arrival of their loan proceeds. There is a need of three (3) business days for the posting of loan funds onto a student’s account at the Law School. All loan funds will then be handled by the Business Office (BO) for tuition payments and refunds of loan aid for cost of living (if applicable). Students will receive refund checks the week school begins. Students will need to see the BO to sign off on their checks. Students must bring in identification before a check can be released. Except for the process of determining eligibility and certifying loan funds, the Office of Financial Aid is prohibited from conducting any cash transaction on a student’s account. Therefore, students must contact the BO with any information or inquiries related to tuition due, fees charged, and/or refunds of their loan funds.
To make public interest law careers more financially feasible for Whittier Law graduates, the Whittier Law School Public Interest Law Foundation (WPILF) and the Law School administration established a Loan Repayment Assistance Program (LRAP) in 2002, with the first grants awarded in May 2003 and July 2003. The 2002 feasibility study indicated that LRAP was a necessary institutional commitment to support the work of the Center for Children’s Rights (CCR), the WPILF Summer Grant Program, the Externship Program, and a Whittier curriculum emphasizing the legal needs of the under-represented.
Each grant recipient will receive two checks, disbursed in March and September yearly. Each check will be made payable to both the graduate and the lender. At the discretion of the recipient, funds may be applied to either principal or interest.
The College Cost Reduction and Access Act of 2007 (CCRAA) offers federal student loan borrowers with high debt relative to income an opportunity to choose lower monthly payments through a repayment option entitled Income-Based Repayment (IBR). It also offers loan forgiveness after 10 years of public service employment.
Q&A with Alison Lynch
Labor & Employment Law
Marissa Buck, Student Extern