Stanford Law School News, Stanford Law School Pilots New Financing Model for Legal Education and Launches Significant Financial Aid Enhancements:
Stanford Law School (SLS) announced it has significantly increased its financial aid support by 10 percent and loan forgiveness funding by almost 40 percent for the ‘22-’23 school year, expanding scholarship amounts to cover all of the tuition costs for JD students (including current students) with family income below 150 percent of the poverty line and increased scholarship amounts overall for all students on need-based financial aid compared to previous years. The law school also announced it will communicate with students about a pilot program for a new model for financing legal education as part of its comprehensive financial aid strategy, which also includes need-based scholarships, a Loan Repayment Assistance Program (LRAP), and funding for public interest and service.
“We continue to seek improvements and enhancements and are proud to say that thanks to the strength of our need-based financial aid program, Stanford Law students already graduate with one of the lowest average debt loads among our peer schools,” said Jenny Martinez, Richard E. Lang Professor of Law and Dean of Stanford Law School. “Stanford Law School is committed to making a Stanford Law education accessible to its students, whatever their economic circumstances and career goals. Approximately 75-80% of our students receive financial aid overall, including scholarships and loans.”
The law school is participating in a pilot program offered by The Flywheel Fund for Career Choice, a new 501(c)(3) nonprofit organized by alumni of Harvard and Stanford Law Schools. The Flywheel Fund’s program will use philanthropic contributions to provide current Stanford Law students who need to take out loans with an alternate way to finance their legal education through an Income Share Loan (ISL). The aim of the program is to extend the law school’s LRAP by introducing an alternative financing option that allows for greater career choice while easing the burden of loan repayment.
“Improving and enhancing financial aid support as well as financial access and equity for SLS students has been one of my top priorities since becoming dean of the law school,” said Martinez. “We were the first to design and adopt an innovative loan repayment assistance program in the ‘80s that has become the standard across law schools. Our existing LRAP program pays back loans for students pursuing careers in public interest and public service, but we now want to give students even more flexibility and freedom. I’m proud of the fact that we are willing to take the lead again and offer new opportunities to benefit our students. We are grateful to the Flywheel Fund for approaching us to work with them and for providing the financial and technical support to launch this pilot program together. Piloting a potentially innovative new model for financing a legal education is part of our overall efforts to support diversity among our students and in the careers they are able to pursue.”
“The Flywheel Fund was created by law school alumni to give law graduates more power to choose career paths that inspire them — by easing the burden of costly loan repayment,” said Elliot Schrage, the Fund’s founding Chair. “We’re grateful that Stanford embraced our offer to pilot this new approach not only by providing design assistance but by also contributing financially to enhance the program’s sustainability and effectiveness. We hope that Stanford’s leadership will be matched by other law schools committed to supporting diversity of career choice.”
About the Pilot
Under the terms of the pilot, Flywheel Fellows will be eligible for ISLs of up to $170,000 from Flywheel for their law school tuition and fees. Flywheel Fellows will enter into a “Flywheel Income Share Loan”, administered by Stride Funding. The program will award up to 20 Fellowships commencing in Fall 2022 to applicants who have not committed to specific employment following graduation.
Repayment under the program is designed to provide Flywheel Fellows a more flexible way to pay law school tuition and expenses and open up career options and possibilities that might otherwise not be available to them. Repayments to the Flywheel Fund are contingent upon the Fellows’ income, with payments that will not exceed the current federal Grad PLUS loan interest rates. Under the terms of the program:
- Repayment will not begin until after employment commences.
- If Flywheel Fellows earn less than $100,000 per year, Stanford has agreed to cover all payments on their behalf as part of an expansion of its existing LRAP, and to cover partial payments on behalf of Flywheel Fellows earning between $100,000 – $115,000 per year.
- If Flywheel Fellows don’t get a job after graduation, they don’t pay anything at all during the period of unemployment.
- No Flywheel Fellow will EVER repay more than they would have if the Fellow had taken out a Grad PLUS Loan at the rate in effect at the time they enter into the ISL–currently 7.54%
The percentage of income owed by Flywheel Fellows stays the same, but actual monthly payments may increase or decrease depending on a Fellow’s income and Stanford’s contribution. If a Fellow earns a high income, a total payment cap will limit how much they are required to pay. No additional payments will be owed on income over $18,750 per month ($225,000 annually), protecting even the highest earning Fellows from unwieldy repayment sums.
“We believe this new model for financing a legal education can alleviate financial pressure, encourage students to pursue alternative careers more quickly after graduation, improve our LRAP program and have a ‘greater good effect’ in terms of helping to finance the legal education of future students at Stanford Law School,” said Frank Brucato, Senior Associate Dean for Administration and CFO at Stanford Law School.
As part of the program, Flywheel Fellows agree to participate in ongoing research about the pilot and its outcomes. The Flywheel Fund and Stanford Law School are committed to studying and reporting on the success of the program to understand the factors, including but not limited to debt burden, that shape career selection decisions by Stanford’s law school graduates. Ralph Richard Banks, the Jackson Eli Reynolds Professor of Law at Stanford Law School and co-founder and Faculty Director of the Stanford Center for Racial Justice, will serve as research advisor to the pilot project. More information about the Fund and the SLS pilot program can be found at www.flywheelfund.org.