Stanford Law School recently announced it would begin piloting a new tuition financing method for law school students in partnership with a 501(c)(3) nonprofit called The Flywheel Fund for Career Choice. In an effort to alleviate student debt concerns and allow for students to have greater choice in seeking out legal careers, the Flywheel fund has created safeguards around repayments for both lower and higher-income earners.
The pilot program, set to commence this fall, will include up to 20 Fellows who are current students at Stanford Law and have not yet committed to employment post-graduation. The Fellows will receive up to $170,000 up-front to pay for law school tuition and fees, which will be funded by philanthropic donations to the organization. Repayment will begin when the Fellows start their chosen employment post-graduation.
The terms of the pilot program include the following:
A 12-year payment term, with a maximum of 18 years.
Fellows will not pay anything until they have started employment (no payments will be requested during any period of unemployment post-graduation).
Repayment is tied to income, with special consideration given to both low and high-income earners. For Fellows earning less than $100,000 per year, Stanford has agreed to cover all payments. For those earning between $100,000 and $115,000, Stanford will cover partial payments. A cap is also in place for those who opt to take high-income positions, ensuring that payments are never out-sized. The cap is placed at $225,000 per year/$18,750 per month, and Fellows will not be asked to pay a percentage of their income beyond that level.
Fellows will never need to 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 entered into the pilot program.
Fellows will also take part in ongoing research on the various factors, including debt, that go into shaping their career selection decisions.
“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 [Loan Repayment Assistance Program] 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 the CFO at Stanford Law School.