Law school loan forgiveness and repayment options
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Becoming a lawyer requires an extended commitment — usually three extra years of full-time study after getting an undergraduate degree. Choosing to be a lawyer can be an expensive decision, with the average lawyer graduating with more than $145,000 in student loans.
While many lawyers earn high salaries, the burden of paying off student loans is often hard to handle. Thankfully, there are several options to modify student loan repayment or even get those loans forgiven.
What is law school loan forgiveness and repayment?
Unless you have the money to finance your law school education with cash, you’ll likely take out federal student loans and perhaps even private student loans. Law school forgiveness programs can erase some of your debt, but you’ll have to meet specific requirements to qualify.
While law school loan forgiveness programs vary in scope, they usually require you to work for a government or nonprofit organization. Some law school forgiveness programs can forgive all of your debt once the requirements are met, while others may forgive only part of it. You will usually have to continue making payments on your loans while you work toward forgiveness.
5 law school loan forgiveness and repayment programs
Whether you owe a considerable amount in law school debt already or you’re considering a career in law and wondering about your forgiveness options, it’s smart to research loan forgiveness programs ahead of time.
Here are the main law loan forgiveness and repayment programs, how they work and who they’re best for.
Public Service Loan Forgiveness (PSLF)
Best for: Lawyers who plan to work for the government or in the nonprofit sector.
Public Service Loan Forgiveness (PSLF) will forgive eligible federal student loans after borrowers make 120 on-time monthly payments in the program. To qualify, you must be on an income-driven repayment plan and work full time for an eligible employer, which could be a federal, state, local or tribal government or a nonprofit organization.
You also need to have Direct Loans to qualify for PSLF. If you have other types of federal loans, they must be consolidated with a Direct Consolidation Loan before your monthly payments will count.
Income-driven repayment plans
Best for: Lawyers with low incomes.
With income-driven repayment plans, lawyers pay a percentage of their discretionary income for 20 to 25 years before having their remaining loan balance forgiven. The eligible repayment plans are Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR).
Income-driven repayment plans are not specific to the law field, so anyone can qualify if they have eligible federal loans. You’ll pay 10 to 20 percent of your discretionary income while on these plans, which might be a problem for lawyers with a very high income — payments could exceed what you’d pay on the standard plan. Use a loan simulation calculator to see if an IDR plan makes sense for you.
State Loan Repayment Assistance Programs (LRAPs)
Best for: Lawyers who qualify for their state’s program.
Some states also offer their own Loan Repayment Assistance Programs (LRAPs) for lawyers, although relief options vary widely. The amount of forgiveness you can qualify for depends on the state where you live and other factors.
States with their own LRAP program include:
- New Hampshire.
- New Mexico.
- New York.
- North Carolina.
- Washington, D.C.
Law School-Based Loan Repayment Assistance Programs (LRAPs)
Best for: Lawyers with low incomes or those who work in high-need areas.
More than 100 different law schools also offer their own LRAPs. Generally speaking, these programs are available to lawyers based on income, with preference given to those who work in lower-paying law professions in the public interest.
For example, at Boston College Law School, the annual awards have ranged from $500 up to $6,000 in recent years. First-time applicants who attended the school in the last five years must earn less than $75,000 and work in a public-interest career to be eligible. Applicants can continue receiving an award in subsequent years, but only until their incomes reach $100,000.
Department of Justice Attorney Student Loan Repayment Program
Best for: Lawyers who work for the Department of Justice.
Department of Justice employees can apply for this forgiveness program as long as they have at least $10,000 in federal student loans and meet other criteria. Most federal student loans qualify, and you can apply for up to $6,000 in forgiveness per calendar year, with a lifetime maximum of $60,000.
Should you refinance law school loans?
If you have student loans that aren’t eligible for loan forgiveness or repayment programs, you may want to consider refinancing. Borrowers with a good credit score and a solid income may be eligible for a lower interest rate than what they’re currently paying, which could save hundreds or thousands of dollars in total interest. It could also make monthly payments more affordable.
However, before you refinance federal student loans, consider what federal benefits you may want to take advantage of in the future. Refinancing turns federal loans into private loans, meaning you’ll lose the option to switch to an income-driven repayment plan, pursue loan forgiveness or access one of the many generous deferment or forbearance programs that the government offers.
If you’re struggling with law school debt and not sure where to turn, forgiveness programs can help. Just make sure to read the fine print so you know what you’re getting into and whether you truly qualify.
If you mostly have private student loan debt, you may not be eligible for many traditional loan forgiveness programs. In that case, you may also want to explore the option of refinancing your student loans in order to secure a lower interest rate, a lower monthly payment or both.