Welcome to the University of Detroit Mercy School of Law Financial Aid Office! We are here to help you focus on your classes by making your education affordable now and by giving you the knowledge to help you plan for a healthy financial future. The information below explains the financial aid process, as well as available scholarships, work-study, and loans. It is designed to answer frequently asked questions and provide helpful information.
CONTACT US ▼
General phone number: (313) 596-0213
Fax: (313) 596-0280
University of Detroit Mercy School of Law
Financial Aid Office
651 E. Jefferson
Detroit, MI 48226
FINANCIAL AID COORDINATOR
Responsibilites: Dual JD Program and international students
Returning students with last names beginning H-Z
Financial planning and literacy/exit interviews/problem resolution
FINANCIAL AID OFFICER
Responsibilites: Prospective and First Year (L1) student financial aid advising
Law School Student Employment Program
Returning students with last names beginning A-G
WHAT IS FINANCIAL AID? ▼
Financial aid may come in many forms, including, but not limited to, scholarships, fellowships, assistantships, grants, student employment, tuition remissions, third-party payments from outside agencies, government and private loans, lines of credit, and in Canada, bursaries. On the graduate level, the bulk of financial aid comes from federal student loans, as neither the U.S. Department of Education nor the State of Michigan provides grant funds for graduate or professional students. While most aid comes from the federal government, students may apply for institutional and private scholarships as well as funding from private lenders and government- or institutionally-funded work programs. The University also certifies enrollment for the VA, Vocational Rehabilitation and other governmental, quasi-governmental and private funding agencies.
Note that financial aid is limited to costs for the student to attend school. Federal aid does not include funds for purchasing assets like a car or paying off consumer debt; neither does it pay for living or educational expenses for people other than the student, nor is it to be used to pay court-ordered payments such as child support, alimony, restitution, etc. It may be used for direct costs, such as tuition, fees, books, supplies, etc. and for basic living costs such as the student’s part of monthly payments for rent or mortgage (low to moderate standard of living) and utilities; food; health care; transportation (bus fare or standard mileage allowance) and other necessities. Federal financial aid cannot be used for expenses for things like bar review courses, but on an individual basis, students in their senior year may request consideration for costs of taking the bar exam, such as the bar exam fees, required police reports, fingerprinting, etc., as long as they can provide documentation of these. In addition, there are private bar loans to cover bar review costs.
Students may request special consideration for additional funds for dependent care expenses for the time the student is in classes and class-related activities, such as attending court proceedings, law school presentations and functions; study group meetings and similar activities, but not to be able to work or to perform family duties, etc. (Please note that per IRS regulations, a dependent care tax credit is available only for a parent to work or look for work; therefore, any part of financial aid funds used to pay child care is not eligible for the child care tax credit.)
Students who have a disability for which they need special equipment or other accommodations (for example, a note taker; a reader for the blind; special software for a blind student to be able to use a computer with spoken words rather than typing; a signer for the deaf; etc.) or whose unreimbursed medical costs are excessive may also petition for an increase in their aid package. Of course, any unusual conditions must be documented. Students should contact the Financial Aid Office for more information if they believe they may have a condition that qualifies for reconsideration.
SOURCES AND TYPES OF AID ▼
Federal Direct Stafford Loans
Federal Direct Stafford Loans are available to qualifying U.S. citizens, permanent residents and students with other acceptable citizenship or immigrant status (such as refugee status). Students must complete a Free Application for Federal Student Aid (FAFSA) for each academic year for which they wish to receive a Stafford Loan. Although no "credit check" is required to qualify for a Stafford loan, you must not be in default on any Federal loan programs, nor owe funds back to any Federal grant programs.
Graduate and professional students, including law students, may be considered for the Direct unsubsidized Stafford loan. The maximum annual borrowing amount allowed for the unsubsidized loan is $20,500 and the maximum cumulative (combined) Stafford loan amount is $138,500 (undergraduate and graduate), with no more than $65,500 of that attributable to subsidized loans. The interest rate is determined by the Federal government every summer, but will not change once the loan is disbursed. Unlike the subsidized Stafford loan available to some undergrauates, the interest on the unsubsidized Stafford loan accrues immediately upon the first disbusement. For the most current interest rate, visit the U.S. Department of Education website. Stafford loans are also subject to an orgination fee of around 1% (visit the site above for the current fee charges). This means the amount of loan funds applied to your student account will be slightly less than the amount you borrowed.
Stafford loans need not be repaid while the student is attending school at least half time. However, once a student graduates or drops to less than half time or withdraws from school, the grace period starts running. The grace period is a six-month period of time which gives the student time to find a job and being working before payments are due. For subsidized Stafford loans, the government continues to pay the student's interest during those six months. At the end of the grace period, the student's repayment period begins. However, students who are not able to begin making payments at that time may qualify for a deferment or forbearance to temporarily eliminate or, in the case of a forbearance, reduce or eliminate payments for a set period of time. Deferments for Stafford loans include in-school deferments for students returning to school at least half time in an eligible program; unemployment deferments for students who are unable to secure a full-time (30 or more hours) job; economic hardship deferments for students who are working but whose income is too low in relationship to their student loan debt to be able to make payments, and others. Deferments are related to when the student borrowed the loan, as loan deferment requirements have changed over the years, so students should check the terms of their Stafford Loan Promissory Note(s) or with their lender, servicer or the federal government to find out what deferments may be available to them.
While a deferment is a right for students who meet the qualifications and apply for the deferment in a timely manner, a forbearance can be at the lender or servicer's discretion. However, any time a borrower in repayment knows that s/he will not be able to make a scheduled payment, s/he should contact the loan servicer immediately to apply for a forbearance so as not to miss scheduled payments and negatively impact the borrower's credit. Staying in touch with the lender or servicer is the best thing to do! See below for links to available repayment programs.
Federal Direct Graduate PLUS Loans
The Federal Direct Graduate PLUS Loan was designed by the federal government to fill the gap between graduate and professional students' cost of attendance and the amount available through Stafford Loan sources. As undergraduate students, through their parents, had access to loans to meet up to the full cost of attendance but graduate students did not, the federal government extended the same type of loan program to graduate and professional students as it had to the parents of undergraduate students.
The Graduate PLUS program is set up with the same basic terms as the PLUS (Parent Loan for Undergraduate Students). These include:
- credit check required
- an interest rate 1% higher than the unsubsidized Stafford loan's rate (for the current rate visit the U.S. Department of Education website)
- loan fees approximately 4-5% higher than the unsubsidised Stafford loan's fee (see link about for current fees)
- no cumulative borrowing limit
- annual borrowing limit is cost of attendance minus other aid
- no grace period, but loan is deferred while enrolled at least half time
- eligible for deferments, forbearances, and all federal repayment programs
Unlike bank loans, the credit check on the Graduate PLUS loan does not use the student's credit score or a specified debt/income ratio. The credit check focuses on two particular categories: 1) the student's current credit situation and 2) any major past credit problems. With regard to the first item, the federal requirements state that a student may not be 90 days or more past due on any credit item. The second covers serious debt problems in the past five years, including bankruptcies, repossessions/foreclosures, judgments against the student, etc. And no student may receive federal aid of any kind if s/he has a defaulted student loan or if s/he owes a repayment on a federal grant and has not made satisfactory payment arrangement on these.
Students who are denied the loan for credit may appeal after reviewing their credit and paying off past due balances, or may obtain the loan using a co-signer who meets federal credit standards.
As there is no grace period on a Graduate PLUS loan, repayment will begin shortly after a student graduates or drops to less than half time. However, like the Stafford Loans, Graduate PLUS loans are eligible for deferments for unemployment, returning to school at least half time, economic hardship, and other conditions. Graduate PLUS loans are also eligible for income-based repayment and certain loan forgiveness programs.
More information on the Federal Stafford and Federal Graduate PLUS loans is available from the U.S. Department of Education. Students should download the Entrance Counseling Guide for Direct Loan Borrower for more details about applying for and receiving federal direct loans, as well as repayment, consolidation, and loan forgiveness programs. Please note that the information about loan fee rebates is effective only until June 30, 2016.
Federal Perkins Loans
Federal Perkins Loans are federal loans that are part of the federal campus-based financial aid program. Campus-based means that the funds are handled at the school, which originates, monitors and collects the student loan in compliance with federal regulations. The Federal Perkins loan is no longer available to any graduate or professional (law) students who have not already recieved it for their current program of study under current regulations. This program will cease to be available at all after the 2016-17 aid year.
Perkins Loans still require a master promissory note similar to those used for the Direct Stafford and Direct Graduate PLUS Loan programs, but there is no origination fee, no credit check and just a 5% interest rate. The Federal Perkins Loan program accrues no interest while the student attends school at least half time or during the first nine months after graduating, withdrawing or beginning less than half time attendance. Unlike the Subsidized Federal Direct Stafford Loans, which accrue interest which is paid by the government during the time the student is in school, in the grace period, or in deferment, the Perkins Loan does not accrue interest during these periods. However, if a student pays off the Perkins Loan with a consolidation loan, the student loses this interest benefit. The Perkins loan also has other benefits, including loan forgiveness for teachers, early childhood educators, nurses, law enforcement personnel (including prosecutors), public defenders, etc., which are lost if the student consolidates the Perkins loan. Thus it is important to know the details of your loan programs before accepting any loans.
More information on repaying the Perkins, Direct Stafford and other federal loans is available from the U.S. Department of Education (downloadable document). All Federal loan programs require entrance counseling and a promissory note prior to disbursement of the loan and an exit counseling session at the time the student leaves school. More information about all federal financial aid programs is available online at studentaid.ed.gov.
Private Alternative Loans
Private Education Loans, also known as Alternative Education Loans, help bridge the gap between the actual cost of your education and the limited amount the government allows you to borrow in its programs. Private loans are offered by private lenders and there are no federal forms to complete. Eligibility for private student loans often depends on your credit score.
Some students turn to private education loans when the student doesn't qualify for federal loans either because of credit issues or lack of U.S. citizenship, permanent residency or other eligible non-citizen status. (Currently, students who do not have acceptable citizenship status need a co-signer or sponsor with eligible citizenship status to borrow.) Other students utilize private alternative loans to cover things like bar preparation course fees and living expenses between graduation and taking the bar exam.
Private education loans tend to cost more than the education loans offered by the federal government, but are less expensive than credit card debt. The federal education loans offer fixed interest rates that are lower than the variable rates offered by most private student loans. Federal education loans also offer better repayment and forgiveness options. Since federal education loans are less expensive and offer better terms than private student loans, student should exhaust their eligibility for federal student loans before resorting to private student loans.
Private student loans typically have variable interest rates, with the interest rate pegged to an index, such as LIBOR or Prime, plus a margin. The LIBOR index is the London Interbank Offered Rate and represents what it costs a lender to borrow money. The Prime Lending Rate is the interest rate lenders offer to their most creditworthy customers. At this writing, in June of 2016, both LIBOR and Prime rates are near or at historic lows. Thus, the margins tend to be significantly higher than in the past when the base rates were higher. As there are generally no interest rate caps on variable rate private loans, if LIBOR and Prime go up significantly, students may see a jump of somewhere between 4% and 8% in their interest rates. Prime historically tends to be higher than LIBOR, so if a student has a choice between LIBOR and Prime plus the same margin, the loan with the LIBOR rate will probably save them money over the life of the loan. Some private educational lenders offer fixed rate loans, though they will be higher than the variable rate loans.
The interest rates and fees paid on a private student loan are based on the student's credit score and the credit score of the cosigner, if any. Generally, with a credit score of less than 650 to 700, a student is unlikely to be approved for a private student loan without a co-signer.
It is sometimes better to apply for a private student loan with a cosigner even if a student could qualify for the loan. Applying with a co-signer usually results in a slightly lower rate as such loans are not as risky for the lender. Moreover, the interest rates and fees are usually based on the higher of the two credit scores. If the co-signer has a much better credit score than the student, it could result in a much lower interest rate. Some lenders also allow the co-signer to be released from the loan contract after the student has made timely payments for two or more years and met additional credit requirements, such as working full time and keeping a good credit score and debt-to-income ratio.
UDM students who intend to borrow a private loan must complete a private loan application with the lender of their choice. Most lenders have online applications available. Once the student completes the application, if the lender approves the student to borrow the loan, the lender will forward the loan application to UDM for certification. In addition, borrowers requesting loans for in-school expenses (rather than Bar expenses) must complete a Private Education Loan Applicant Self-Certification Form for the lender.
Of course, Law students are encouraged to consider their borrowing options through the Graduate PLUS loan program before borrowing a private loan. Students may request consideration for expenses directly related to the Bar Exam (registration fees, fingerprinting, police reports, etc. but not bar review courses or living expenses) through the federal Stafford or Graduate PLUS loan program. It is strongly recommended that all students borrow conservatively, both for federal loans and private loans.
Students have the right to select any lender they wish for an alternative loan. Most lenders list loan terms and conditions on the internet. As always, UDM recommends that students review all options and make educated borrowing decisions.
UDM has partnered with ELMResources to assist with the lender selection process. ELMResources maintains a comprehensive although not exhaustive list of lenders offering private loans. Students may wish to use ELMSelect to begin the search for private loans. If a student selects a lender on the ELMResources list, the student can complete the application on ELMSelect. UDM will be notified of the request and will complete the school certification. Students who select a lender not on the ELMResources list should bring their application to the Financial Aid Office for manual certification.
Canadian Student Loans
Canadian citizens and other qualified residents, such as “landed immigrants,” may be able to obtain a Canadian student loan to attend UDM. Each province has its own requirements. Depending upon the province’s own resources, a student may receive just the federal portion of their student loan eligibility or that portion supplemented by funds from the province itself. Students applying for Canadian student loans should apply through the province in which they have established residency.
Joint JD/JD program students generally receive more funds if they apply through the University of Windsor for their Canadian student loans, particularly if their province does not provide funds for students to study outside of the province or country. Most of the Canadian students attending Detroit Mercy Law are residents of Ontario, and OSAP (Ontario Student Aid Programs) often provides additional resources to Canadian students attending an Ontario school.
Canadian students wishing to have their loan applications and related materials certified should bring their application forms to the Financial Aid Office in the Student Service Center for completion. The Financial Aid staff will complete and mail the applications as well as fax them to any offices that accept faxed documents.
Scholarships are funds that are awarded to a student and are generally based on merit, talent or service rather than on financial need. Scholarships may be available both from University and outside sources. Scholarships must be considered part of a student's total financial aid package as they are resources to be used for the student's educational costs. Students are responsible to notify the Financial Aid Office of any outside scholarships or other resources they receive so that their awards can be adjusted to accommodate the outside funding.
Law School Scholarships
The Law School awards a variety of scholarships to students each year. Some of these are based on academic excellence, others on service in leadership roles in certain student organizations. In addition, there may be competitions for scholarship funds from endowed scholarship programs which have specific qualifications for an award.
First-year (Law Dean's) scholarships are generally based upon a student's application data, including grade point average from the student's transcripts, LSAT scores and more. These may be for a specific amount or a percentage of tuition up to a cumulative maximum, and may or may not be renewable. Renewable scholarships generally require a student to earn a competitive grade point average for renewal.
Upper-class scholarships are non-renewable and are based either upon academic excellence, leadership or service. A student may earn a Law Dean's academic scholarship for the second year based upon first-year grades, or for the third year based upon second-year grades. Receipt of a second-year academic scholarship is not a guarantee of a third-year scholarship. Each year is considered separately.
Students in the extended programs may not be eligible for consideration for a second-year scholarship until after they have completed their first-year coursework.
Private scholarships are external to the University and require a student to apply directly to the scholarship organization. When a scholarship announcement is received via e-mail, it is forwarded to the Detroit Mercy e-mail address to the law student body. It is also added to the list below. Many of the scholarship competitions are annual events, so if a student misses the current year's deadline, s/he should make a copy of the scholarship listing to remember to apply on time during the subsequent year. Closed scholarship competition information is periodically removed from the website for clarity.
Students seeking scholarship funds should also contact employers or unions, religious groups, ethnic-based cultural and educational organizations; fraternities, sororities and community organizations; professional associations in the student's area of interest, etc. There are also several excellent scholarship search services available online, such as www.fastweb.com. Many students find scholarship awards for which they may qualify, but relatively few actually apply. Taking the extra time to complete a scholarship application or tweak a paper to fit a writing competition may well be worth it!
Student Employment Programs
Students who demonstrate financial need may be employed through the Federal Work Study program for a maximum of 15 to 20 hours per week during the regular academic year. Students desiring a work study award are encouraged to submit their FAFSA before March 1 each year as funds are extremely limited. Law students who qualify for work study funds may find positions at the School of Law or in law-related jobs with nonprofit agencies.
The University also offers a small number of part-time, non-work-study jobs for students who have no financial need or whose need is met through other sources. Full-time international students may work in one of these non-work-study positions only. All of these jobs are on campus.
Jobs are mainly of two types: clerical and research assistants. Clerical positions may start in the $10-$12 hourly range; most research assistantships start at $12 per hour.
Please see the Student Employment Information Sheet showing the documents students need to work during the 2015-16 academic year.
For more information on veterans benefits at Detroit Mercy Law please visit the University of Detroit Mercy website. This site lists both the numerous programs UDM participates in and the process for securing VA educational benefits. The homepage for benefits, including education and training, at the US Department of Veterans Affairs is: http://www.benefits.va.gov/benefits/.
Vocational Rehabilitation Programs
Students needing training as part of vocational rehabilitation should begin by contacting Michigan Rehabilitation Services, a part of the Michigan Department of Health and Human Services. They offer an introduction to their process and services in this downloadable brochure.
THE FINANCIAL AID PROCESS ▼
How and When do I Apply for Financial Aid?
Complete the Free Application for Federal Student Aid (FAFSA).
For most students, the first step to receiving financial aid is to complete the Free Application for Federal Student Aid, or FAFSA. This is the basic data-collection form that the federal government has designed for U.S. citizens, permanent residents and other eligible non-citizens.
The FAFSA can be completed on line at www.fafsa.ed.gov or, if the student prefers, s/he can obtain a paper application by calling the federal financial aid information number, 1-800-4-FED-AID (1-800-433-3243). The on-line FAFSA allows student information to be processed quickly, and reduces errors due to incomplete applications and illegible handwriting.
The on-line application must be signed, either with a Federal Student Aid ID (FSA ID), which can be obtained from the federal FSA ID website, www.fsaid.ed.gov, or from the FAFSA website above; or a student may complete the form on-line and then print, sign and mail the signature page to the federal processor’s address on the form.
When filing your FAFSA, be sure to include the Detroit Mercy School of Law Title IV institution code, E00392. If you are a Dual JD Program student and wish to receive aid at both Detroit Mercy and University of Windsor, include both the Detroit Mercy code and the UW code: G06689.
Students must apply for financial aid for each year for which they wish to receive funds. The on-line FAFSA becomes available by January 2 each year for the fall of the same year. Under new Federal regulations, the 20017-18 FAFSA will become available online in October 2016 and you may use 2015 income and tax year information to complete it. This will allow students to use the 2015 IRS retrival tool to populate their FAFSA income information.
New and prospective students should not wait to be admitted to apply for aid.
Detroit Mercy’s priority deadline date is April 1 each year; however, students who wish to participate in the Federal Work Study Program should have their application completed and returned by the end of February to have the best chance of receiving a Work Study award.
After the FAFSA is Processed
You will receive a notice emailed from the U.S. Department of Education with instructions on how to view your Student Aid Report (SAR). You will receive a paper SAR in the mail if you did not provide an e-mail address or if you did not sign your FAFSA.
Expect to receive your award notification by e-mail when your file becomes complete. The e-mails will be sent to official Detroit Mercy student email accounts. Students will use TitanConnect to access student account information, including financial aid awards.
Determine how much financial aid you will need by using the budget information found in TitanConnect or by reviewing our Estimated Costs of Attendance. Confirm the award in TitanConnect by "Accepting", "Declining" or reducing the aid offered. It's that simple!
The University of Detroit Mercy will process Federal Student Loans, including Stafford and Grad PLUS through the Federal Direct Loan Program. ALL new borrowers to the Direct Loan Program will be required to complete a new Master Promissory Note (MPN). Students borrowing for the first time will also be required to complete an Entrance Interview as well. The Entrance Interview is an on-line tutorial about the loan programs. When completing your loan requirements do not be alarmed where there is not an option to specify the Law School as the school you are attending; simply choose the University of Detroit Mercy.
ALL AWARDS ARE SUBJECT TO AN ADJUSTMENT if any of the following take place:
Your enrollment status changes
Your living arrangements change
You receive aid not listed on the original award statement
Your employer or another source contributes to your education
Your FAFSA information changes after verification
The granting authority (state or federal government, private agency, etc.) revises its award
If your award changes, you will receive a notification of a change to your award with instructions about reviewing the current award in TitanConnect. If you know that a change is necessary, please complete and submit a Request for Re-Evaluation Form.
Request for Additional Information:
Some applications require that additional information be submitted and reviewed before it is complete. Please respond promptly to all requests and include your student number on each document.
COSTS OF ATTENDANCE ▼
SUMMER STUDY AND STUDY ABROAD ▼
Students interested in receiving financial aid for the summer period may apply for summer financial aid beginning February 15 each year. Summer applications will be available both from the Financial Aid Office in the Student Service Center and on our website. Applications are due April 1.
To receive student loans, a student must be enrolled at least half time in the summer, which is two credit hours. The student also needs to have a current FAFSA on file. Students desiring to receive loans from the federal government for summer of 2016 must have completed a 2015-16 Free Application for Federal Student Aid (FAFSA). Students who have not completed the 2015-16 FAFSA may do so at www.fafsa.ed.gov.
Students must indicate on their summer applications the number of credits and the period(s) they will attend. Applications are processed once the student is registered for the number of credits they indicated on the financial aid application.
Student loans are available both for study at Detroit Mercy or at host schools and study abroad programs.
Study abroad or at another institution
Students attending classes at another institution or in another institution's study abroad program must meet with Associate Dean Jennings to have their program of study approved before they may apply for financial aid to attend that program. Students should e-mail Dean Jennings for an appointment.
If permission is granted, the student must apply to and be accepted at the school at which the student's program of study is offered. Students must complete the Summer Financial Aid Application if the program will take place in the summer or the Financial Aid Office if the program is during the regular academic year.
Students will need to provide the contact information for the program or financial aid office at the host school which they will attend. In addition, the student is responsible to make sure that the Financial Aid Office gets a copy of the permission letter from Assistant Dean Jennings and the letter of good standing from Dean Lewins-Peck. Aid will be processed only for programs approved by Dean Jennings.
Once the Financial Aid Office receives the student's application information and letters, the host school will be contacted to request financial information on a consortium agreement. The host school must be willing to participate in a consortium arrangement in order for Detroit Mercy to process any federal financial aid for the program. Loans will be certified in the lower amount of the amount the student requests or the cost of attendance amount reported by the host school on the consortium agreement, plus origination fees if applicable.
As federal regulations state that the school may release funds to the student no more than 10 days before classes begin, the Financial Aid Office will request funds to be released by the Student Accounting Office on the first available date including or subsequent to the tenth day before the student's classes begin at the host school. If the student is enrolled both at Detroit Mercy and a host school during the same period, the disbursement date(s) will be calculated based on the starting dates for each program.
INTERNATIONAL STUDENTS ▼
Students who are citizens of countries other than the U.S. and who are attending the University of Detroit Mercy School of Law may apply for different types of aid (see below) to help meet their educational costs. Students who have dual citizenship (U.S. and another country), U.S. Permanent Residency or other qualifying U.S. status (but not a student or employment visa status) may apply for U.S. federal aid.
Private Alternative Loans
There are private loans through U.S. banks, and require a demonstration of creditworthiness and a U.S. co-signer or sponsor (someone who borrows for you). Lenders vary in their participation, interest rate structure, and requirements. Co-signers must meet credit standards set by the banks, and be U.S. citizens or Permanent Residents living in the U.S. with a U.S. credit history. For more information, please see the Private Alternative Loans webpage.
International students may be eligible for on-campus student employment. Students on an F-1 visa must bring in their photo ID (driver's license or recent passport) and I-20 papers to pick up student employment forms. Students who do not have a U.S. Social Security Number will need to apply for one and receive it before they may be paid. Information is included in the Student Employment Packet available from the Financial Aid Office in the Student Service Center.
All students should regularly check their TitanConnect e-mail for scholarship opportunities as they arrive. There are also resources available on the Internet. Check out the international student page at www.edupass.org for more information and links to scholarship search services, including www.fastweb.com and www.finaid.org for Canadian students.
Canadian students may qualify for Canadian Student Loans through their province to attend Detroit Mercy. Some provinces process just the federal portion of the student loan, while others add provincial funds. Students in the Dual JD degree program with Windsor are encouraged to apply for their Canadian Student Loan through the University of Windsor in order to receive the maximum loan amount plus a possible bursary. All Canadian students may qualify for a line of credit through a Canadian bank or one of the local banks.
BAR STUDY LOANS ▼
Bar study loans are private alternative loans through a bank or other lending agency. These loans are designed to assist students to cover costs of bar exam fees, bar review courses, travel to the location of the bar exam, and living expenses while studying for the bar exam.
Being private loans, each bar loan will have its own terms. Lenders will evaluate a student’s application based on the student’s credit rating and other criteria. Some of these loans may have a variable interest rate, with or without a cap. Bar loans may also have an origination fee which is deducted from the proceeds when a student receives a disbursement and/or a fee that is added to the loan balance at repayment. Bar loans are not federal loans nor are they federally guaranteed, which means that there are no special programs like income-based repayment or loan forgiveness, and few if any options for consolidation or interest-rate reductions. It is strongly recommended that students read all of the terms and conditions of each bank's loan program as they will differ and these differences may significantly affect costs, flexibility and repayment terms.
Most lenders require a credit score of at least 650 to 700 to approve a student’s bar loan application. Lenders are generally more concerned about a student’s payment history than debt-to-income ratio as lenders are aware that most students are not working full time while in school. However, there are lenders that will not lend to students with total debt over certain limits.
Students who do not qualify for a bar loan on their own may be able to apply for funds with a co-signer. This will usually result in the student being charged the highest interest rate and fees at which the lender will still fund loans. Students who do qualify on their own might want to ask the lender if they could receive better terms (interest rates and fees) with a creditworthy co-signer.
Bar loans generally have a lifetime maximum limit of $10,000 to $15,000. Most lenders will not accept an application from a student who has already obtained a bar loan from another lender.
Some lenders will allow a student to borrow a loan but receive funds in up to four disbursements in order to meet the student’s needs without accruing interest on the undisbursed amounts of the loan. This saves the student money and gives the student the opportunity to delay, reduce or cancel later disbursements without penalty if those funds are not needed.
Students who need assistance with the costs of registering for the bar exam would be better to request a re-evaluation of their federal loans once they have documented the cost and the registration. Federal loans may be awarded for the first bar exam fees only. Generally the loan that the student receives is the Federal Graduate PLUS loan.
Detroit Mercy Law does not have a preferred lender list for Bar Loan lenders so students may want to do an internet search of banks and other lenders that provide these loans.