The average law school graduate finishes school with $145,500 in student loan debt, according to the National Center for Education Statistics.
And while a career in law can be incredibly lucrative, beginning one with six-figures of student debt can still be daunting.
Fortunately, there are solutions to get help with paying off your law school debt — and even opportunities for law school loan forgiveness. Here’s what you need to know about your options.
How to get law school student loan forgiveness
If you have federal student loans, there are a few ways you can get help paying off your debt. The first two options could be considered law school loan forgiveness, while the third is technically a repayment assistance program.
Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) program is offered by the U.S. Department of Education, which issued your federal loans. The program provides complete forgiveness of your remaining balance after you’ve made 120 qualifying payments.
To qualify for this law school student loan forgiveness program, you need to work full-time for a government agency or eligible not-for-profit organization while making your 120 qualifying payments. Other requirements include:
- You must have Direct Loans. If your federal loans are through a different program, though, you can consolidate them with a Direct Consolidation Loan.
- You’ll need to make your payments on an income-driven repayment plan.
- You must recertify your employment every year.
Once you’ve met all these requirements, your remaining balance will be forgiven without any tax implications.
Income-driven repayment plans
Even if you’re not working toward PSLF, you can apply for an income-driven repayment (IDR) plan. These plans reduce your monthly payment to a small percentage of your discretionary income and also extend your 10-year repayment plan to 20 or 25 years, depending on the plan.
Once you’ve completed your repayment term under your plan, the remainder of your student loan debt (if any) will be forgiven. The only catch is that this type of law school loan forgiveness is taxable, so you’ll need to prepare for a potentially large tax bill.
Two of the four IDR plans require you to show financial need, but the other two do not. Also, keep in mind that some federal loans don’t have access to certain IDR plans, and you may need to consolidate your loans before you can qualify.
Read More: Pros and Cons of Income-Driven Repayment Plans
Student loan repayment assistance programs
There are a couple of loan repayment assistance programs (LRAPs) designed to help law school graduates. Instead of providing forgiveness, which only the issuer of the loan can do, these programs help you make payments.
There are several different types of LRAPs out there, including:
- Law school-based programs
- State programs
- Federal programs
- Non-profit employee programs
Learn more about these programs on the American Bar Association website to see if you qualify and how much you can get.
What if you don’t qualify for law school student loan forgiveness?
Getting assistance through a forgiveness program or LRAP can make a big difference for your career and financial situation, but it’s possible you’re not eligible for any of them.
If you have private student loans, don’t meet other requirements for forgiveness and repayment assistance, or you simply don’t want to wait to eliminate your debt, refinancing your loans could help you achieve your goal of paying down your balances faster.
Student loan refinancing involves replacing one or more of your current student loans with a new loan offered by a private lender. Refinancing your debt typically requires a relatively high income, which is possible with a career in law, and a solid credit history.
Read More: How to Refinance Law School Loans
If you don’t meet all the eligibility requirements on your own, however, you can get someone to co-sign your loan to help improve your approval odds.
There are three primary ways refinancing can help you:
- Lower interest rate: Depending on your creditworthiness, you may be able to get a lower interest rate than you’re currently paying — even if your current loans are through the federal government. When your interest rate drops by even a small percentage, it can make a huge difference on a six-figure balance.
- Repayment flexibility: Private lenders typically offer repayment terms ranging from five to 20 years, giving you some flexibility with how long it takes to repay your debt. If you have the budget and want to eliminate your balance sooner than later, you can choose a shorter repayment term. But if you want to lower your monthly payment, you can opt for a longer term — the choice is yours.
- Choose your lender: If you have federal loans, you didn’t get to choose your loan servicer, which may make you feel stuck. With refinancing, you can take the time to research different lenders and choose the one with the features and customer service ratings that work best for you.
Compare student loan refinancing rates before you apply
The best way to maximize your savings when refinancing your law school loans is to shop around and compare rates and other features with several lenders. Private refinance lenders typically allow you to get prequalified before you officially apply, so you can get an idea of whether you’re eligible and what your rate would look like for you alone or with a co-signer.
To cut back on your research time, use Purefy’s Compare Rates tool. With just a little information about you and your student loans, Purefy can provide rate quotes from multiple lenders in one place, making it easier to compare your options.
As you shop around, make sure you’re comparing the same type of interest rate. Variable rates, for instance, typically start lower than fixed rates, but they can fluctuate over time — potentially costing you more money if you have a long repayment term. On the flip side, you may want a variable rate if you’re planning to make quick work of your debt.
Fixed interest rates start off higher, but they remain the same throughout the life of your loan, making them a better option for longer repayment terms.
Whatever you do, take time to consider your situation and your financial needs, then make a decision based on what’s best for your own student loan payoff goals.
