FINANCIAL AID
Commercial Educational Loans
Many educational loan lenders offer commercial, cost-based educational loans to credit worthy applicants.
Why you might prefer a GradPLUS loan to a private, commercial loan:
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It has a fixed interest rate
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If your credit is good, fair or poor, your cost will likely be lower
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It has more extensive deferment and forbearance options
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The repayment incentives offered can bring the repayment cost to 7.35% or lower
Why you might prefer a commercial loan to a GraduatePLUS loan:
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If you have excellent credit, then your interest rate will probably be lower than that of the GradPLUS; however, if interest rates continue to climb, this benefit is diminished, or disappears altogether
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You believe it is unlikely that you will use the deferment or forbearance options
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You plan to pay off the loan in a short period of time
Commercial Educational Loan Terms at a Glance
- Provides from $1,500 to full cost of education, less other aid, per academic year. Aggregate amounts vary depending upon the lender
- Usually two disbursements per loan period
- Variable interest rate, typically determined by adding percentage points to the 91-day Treasury bill, LIBOR (London Interbank Offered Rate), or prime rate
- A guarantee fee and/or insurance fee may be charged, as well as a fee added on at the time of repayment, based on a percentage of the total amount borrowed
- Most programs allow you to defer payments of interest and principal during enrollment
- Repayment on such loans usually begins within two to nine months of your last day of half-time enrollment, at which time both interest and principal become due
- Payments may be made monthly or quarterly, with 10 to 20 years to repay. Monthly repayment schedules depend upon the amount borrowed, the time taken to repay the loan, whether repayment of interest was deferred until after graduation, and the interest rate.
Your Credit Score Matters
Lenders of commercial loans use your future salary as collateral. To help reduce their risk, they check your credit score. Any negative credit history could prevent you from receiving educational loans. Since commercial loan lenders check credit up to seven years prior to your entry into law school, any irregularity in your credit history can seriously impair your ability to borrow commercial loans, jeopardizing your chances of paying for law school. While some lenders allow you to apply with a co-signer, even a co-signer with excellent credit may not save you if your own score is not adequate in the judgment of the lender.
Aggregate Limits
Lenders of commercial loans may have aggregate limits, meaning that you cannot borrow educational loans in excess of the limit, a figure ranging currently from $102,000 to $150,000. If you have borrowed heavily in undergraduate and/or graduate school, then it is possible that after three years of law school, if you borrow $30,000 per year (as many of our students do), you may reach that limit. If you borrowed before coming to law school, you may not be able to borrow enough while you are here (assuming you receive no grants, and depend entirely on loans).
How to Apply for Variable Interest Rate Loans
1. Choose a lender and apply for the loan. You may apply using one of the Law School’s preferred lenders, or select a loan provider of your own choosing. You have the right and ability to select the education loan provider of your choice, are not required to use a lender on this list, and will suffer no penalty for choosing a lender that is not identified on this site. The lenders listed here were chosen because of their competitive interest rates, repayment benefits for students, and qualify of customer service.
The lender will record all application information and you will electronically sign a preprinted promissory note online. Should you borrow from a lender with whom the Law School does not do business electronically, you will need to submit a copy of your paper promissory note from the lender to Law Financial Aid.
2. A GW Student Financial Aid Supplement needs to be completed online.
Besides providing basic identifying information and your intended enrollment plans, this is where you tell the Law School exactly which loans you are borrowing, in what amounts, and from which lender. Without this form, Law Financial Aid does not know you have loan applications awaiting completion.
When to Apply for Commercial, Credit-Based Loans
Admitted J.D. and LL.M. students: Apply for (and other) loans after you have paid at least your first tuition deposit, and have made your decision to attend GW Law School. (Loan forms are not transferable school to school.) Allow at least 6-8 weeks for processing once all forms are received by Law Financial Aid.
Continuing J.D. and LL.M. students: You may apply in mid-spring semester for the following academic year. If you are applying for GW Need-Based aid (J.D. students only), you will need to have completed the loan application process by the time of the GW Need-Based aid deadline, usually April 15. You may apply for loans through April of the academic year for which loans are desired, but if you wish the funds to arrive in time for the start of the fall semester, you should apply as early as possible.
No application will be processed unless all required forms have been received by the Law School Financial Aid Office. We usually begin processing loans for the continuing students in late May. Processing time depends on volume. You will be notified periodically if your file is incomplete, but please feel free to contact Law Financial Aid if in any doubt.
When and How do Commercial Educational Loan Funds Arrive?
Credit-based educational loans are issued in two equal portions, divided over the fall and spring semesters of the loan period, and arriving at the beginning of each semester. Students applying for these loans for one semester only (usually due to needing only one semester of coursework prior to graduation in an academic year) may receive their funds in one disbursement at the beginning of the semester.
Electronic Funds
Loan funds from our most frequently used lenders (GW/Citibank, Access Group, Total Higher Education, and Sallie Mae) are deposited directly into your GW Student Account by electronic funds transfer (EFT) each semester. Federal regulations mandate that electronically transmitted loan funds not used within three days of disbursement be returned by the school to the lender. If you are not registered, registered but not for the appropriate number of credits, or are missing some document required for admission or certification, your loan may be delayed in paying into your GW Student Account, and subject to return to the lender until such time as all requirements for the loan have been satisfied.
Paper Check
Lenders with whom the Law School does not have an electronic set up may send their loan funds by paper check, which are payable to you and to GW University. You must sign any paper checks before the University can deposit them. Checks not deposited within ten days of issue are required to be returned to the lender.
Notification
You will be notified of the arrival of loan funds each semester. If you do not receive notification when you expect it, always contact Law Financial Aid to check your status.
Refunds
After the first day of classes and once your loan funds have been deposited into your GW student account, if a credit balance is available after tuition and fees have been fully paid for the semester, you may receive a refund check from the University. In absolutely no case are loan funds available to you prior to the first day of classes in any semester.