Stanford Law School pilots new financing model

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

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Stanford Law to offer ‘income share’ financing as law school costs soar

Stanford University’s campus is seen from atop Hoover Tower in Stanford, California May 9, 2014. REUTERS/Beck Diefenbach

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  • Law students will pay 10% of future income in exchange for $170.00 upfront for tuition
  • Pilot program could open new era for law school financing, proponents say

Sept 15 – Stanford Law School has teamed with a new non-profit to offer what are known as “income share agreements” to law students, a move officials said will lower the cost of a JD for many and make it easier for law graduates to purse lower-paying public interest positions.

Under a pilot program announced Thursday, participating first- and second-year Stanford law students will receive up to $170,000 upfront to pay for their degrees through the Flywheel Fund for Career Choice, which has been seeded with more than $2.5 million in donations. Upon graduation, participants will pay 10% of their income for 12 years to Flywheel.

The school said Flywheel will use those funds to offer new income share agreements to future law students. The program is open to graduates pursing any career path, which sets it apart from existing law school loan repayment programs that are available only to graduates working in public interest jobs.

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The plan was designed to ensure that participants do not end up paying more than if they had taken out federal graduate loans to pay for law school, said David Kafafian, chief operating officer of Stride Funding, which is administering the program for Flywheel. But they will not be eligible to participate in the federal government’s Public Service Loan Forgiveness, which erases the debt of borrowers who stay in public service positions for 10 years.

Stanford Law’s chief financial officer Frank

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