Stanford Law to offer ‘revenue sharing’ funding as law school costs soar – Bollyinside

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  • Law students will pay 10% of future earnings in exchange for $170.00 tuition advance
  • Pilot program could usher in new era in law school funding, say supporters

(Reuters) – Stanford Law School has partnered with a new nonprofit to offer law students so-called “revenue-sharing agreements”, which officials say will lower the cost of JD for a lot and will make it easier for law graduates to earn. paid positions in the public interest.

Under the pilot program announced Thursday, participating first- and second-year Stanford law students will receive up to $170,000 in advance to pay for their degrees through the Flywheel for Career Choice Fund, which has received more than 2 .5 million dollars in donations. Upon graduation, participants will donate 10% of their earnings for 12 years to Flywheel.

The school said Flywheel will use the funds to offer new revenue-sharing deals to prospective law students. The program is open to graduates from any career path, which sets it apart from existing legal loan repayment programs that are only available to graduates in public office.

The plan was designed so that participants would pay no more than if they had taken out federal graduate loans to pay for their law school education, said David Kafian, chief operating officer of Stride Funding, which runs the Flywheel program. . However, they will not be eligible to participate in the Federal Government’s Civil Service Loan Forgiveness Program, which waives debt for borrowers who remain in the civil service for 10 years.

Stanford Law Chief Financial Officer Frank Brucato called the pilot a “game changer,” anticipating it could establish a new national law school funding model.

The school has set $170,000 as the median amount that current and prospective students should lend, Brucato said. Annual tuition for the three-year JD Stanford Law program is now $66,924

Growing law student debt is a growing problem in the legal profession. According to the US Department of Education, nearly 71% of law students leave campus on student loans, and their average debt is around $138,500 — more than any other field outside of medicine.

A 2021 study by the American Bar Association of law graduates in their first decade of learning found that 80% said their debt had affected their job or career choice, and 67% said feeling “high or overwhelming financial stress”. at all”.

Stanford’s law will fully pay Flywheel riders earning less than $100,000 and subsidize payments to those earning between $100,000 and $115,000, with an estimated annual school cost of $2.5-3 million, a said Brucato.

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

Establishing simple terms in advance will provide law students with clear information about their finances after graduation and facilitate the transition from public service employment to a private placement, as their credit status is unrelated to their type of employment, said Flywheel President Elliot Schrage.

That could be a relief for many students and alumni who would otherwise have six-figure law school debt, said Ralph Richard Banks, a Stanford law professor.

“It could potentially go way beyond Stanford,” Banks said. “There is great potential here.”

Read more:

Embarrassed. accentuated. desperate. How long is the burden of young lawyers

‘Debt changed my life’: Lawyers involved in student loan forgiveness

Source: Reuters Trust Principles.

Karen Sloane

Thomson Reuters

Karen Sloan reports on law firms, law schools and legal affairs. Contact her at karen.sloan@thomsonreuters.com

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