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Large Numbers of Law - Cost of Unsubsidized Loans

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You know all that budget reduction stuff Republicans (and many Democrats) are talking about? Well, it's screwing law students pretty bad. Tuitions continue to grow, and schools are pushing costs of attendance up well over $200,000.

So of course, your loving government voted to kick you while you were down, though you maybe missed it. The Budget Control Act of 2011 eliminated subsidized loans for graduate students, now only unsubsidized are available. No big deal though, right? It's just interest accrued during law school, and that's a small fraction of the time you're going to be carrying your loans for.

Not so fast, bucko! Today we're taking a quick look at just how much government belt tightening will hurt the typical law student.

Previously, graduate students could borrow up to $8,500 a year in subsidized loans.

The interest on unsubsidized loans is 6.8%.

By the time payments become due (when the subsidization would have run out), you'll have your 1L loans for 3 years, your 2L loans for 2 years, and your 3L loans for 1 year. Pretty simple, but we'll do the math for you.

Your 1L loans now accrue an extra $1,734 $1854.58 in interest.

Your 2L loans accrue an extra $1,156 $1,195.30.

Your 3L loans accrue an extra $578.

About 90% of law students take out loans, and subsidized loans would be the first ones you'd get. So, that little bit of Budget Control tacks on an extra $3,468 $3,627.88 to the bill for the vast majority of law students.

Correction: Your interest accrued during law school is capitalized and begins earning interest. This capitalization results in another $159.88 being tacked on to your bill when you graduate (not to mention that interest accruing more interest until you've paid off the total balance).

[More Large Numbers of Law]

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