You have to forgive me for my ignorance because I haven't gotten into the school loan game yet.
Won't your loans still be accruing interest if you go back to school? So you'll end up owing substantially more (in interest alone) if you continue to put them off, correct? Have you done the math on your monthly payments if you start now vs. one or two years from now?
As long as you keep your GPA up and get a good LSAT, you should be fine. It seems like law schools are much more concerned with their GPA/LSAT medians these days (because they contribute to rankings) and not at all concerned with undergraduate institutions.
I think that's really a personal decision. Do you want to work in your current location? Do you want to work with your father or his friends? If so, the best location is probably one where you've already got connections.