Stanford Law School

Stanford Law Announces ‘Income Share’ Financing to Combat High J.D. Costs

In an effort to lower the cost of a J.D. education, Stanford Law School has teamed with a new non-profit to offer ‘income share’ financing to law students.

The new pilot program, which was reported by Reuters, will provide participating first- and second-year Stanford Law students up to $170,000 upfront for tuition, with the exception that they pay 10% of their future income over 12 years in exchange.

The program is unique in that it’s open to graduates pursuing any career path. At other law schools, loan repayment programs typically are only available to graduates working in public interest jobs. The non-profit, Flywheel Fund for Career Choice, has received seeding funds of more than $2.5 million in donations to fund the program.

STUDENT DEBT IS A GROWING CONCERN

Rising law student debt has been a growing issue within the legal industry. In fact, according to the U.S. Department of Education, nearly 71% of law students leave law school with student loans, with the average debt around $138,500.

Experts say Stanford’s new program could provide relief for many students who, without the support, might have six figures in traditional law school debt.

“One of the innovative aspects of this collaboration is that Stanford Law will fully cover repayment for Flywheel pilot participants earning less than $100,000 and subsidize payments for those earning between $100,000 and $115,000,” Linda Abraham, founder of Accepted, says in a LinkedIn post.

The program will initially be limited to 20 students, with an income cap of $225,000, meaning monthly payments cannot exceed $1,875 for even the highest paid graduates.

“This could ultimately extend far beyond Stanford,” Stanford law professor Ralph Richard Banks says. “There is great potential here.”

Sources: Reuters, LinkedIn, Reuters