Stanford Law School is piloting a new income-share financing model for up to 20 students in the school’s classes of 2024 and 2025, the school announced in September.
The students will pay 10% of their future income for 12 years in exchange for $170,000 upfront for their degrees, with the University subsidizing or fully covering repayment for graduates earning $115,000 or less, according to the release.
The school is offering the program in partnership with The Flywheel Fund for Career Choice with the goal of financing law students’ education and decreasing the burden of law school debt. The school’s chief financial officer Frank Brucato called the pilot program “a game changer” and predicted it could establish a new model for financing law school, the release said.
The model will target students who are specifically seeking careers in public interest law or other pathways where income may limit their ability to repay student loans, a law school spokesperson said, adding that Stanford is the only top law school offering an income share program.
The Flywheel Fund for Career Choice is a 501(c)(3) nonprofit created by alumni of Harvard and Stanford’s law schools. The organization’s mission is to support law school students who may be discouraged from pursuing careers in law because of the resulting debt.
Lawyers from the Flywheel Fund approached the law school last fall to discuss the potential impact of law school debt on graduates’ careers, wrote law school spokesperson Stephanie Ashe in an email.
Ashe wrote that the lawyers at the Flywheel Fund proposed a financing model that would allow students to pursue a variety of careers in the legal field by alleviating the pressure of paying off student loans.
According to Ashe, the Flywheel Fellowship pilot program is an extension of the Loan Repayment Assistance Program (LRAP). SLS was one of the first law schools to introduce LRAP, which provides loan relief for graduates who accept jobs in the public interest sector.
Earlier this year, the law school also announced its intent to increase financial aid by 10% and loan forgiveness by almost 40%. The school additionally committed to expanding scholarships for juris doctoral students with family income below the 150% poverty threshold this academic year.
“If successful, the program will help us understand and explore new opportunities to serve including how we might further enhance our LRAP program,” wrote Ashe. “The pilot will be extended, expanded and improved based on student feedback, economic conditions and donor support.”
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