Law school loan forgiveness and repayment options

1
New Africa/Shutterstock
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

Becoming a lawyer requires an extended commitment — potentially even seven years of full-time study beyond high school. As a result, the cost of choosing this career can be sky high, with the National Center for Education Statistics (NCES) putting the average law school debt at $145,500.

While lawyers do have the potential for a high salary, the cost of paying off student loans could be too much to handle. This guide covers the top programs for law school forgiveness, how they work and what to consider before you move forward.

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 potentially even private student loans. Law school forgiveness programs are programs that will erase some of your debt after the fact, although 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 requirements are met, and others may only forgive part of your debt. You will usually have to continue making payments on your loans while you work toward forgiveness.

6 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 options, it’s smart to research loan forgiveness programs for lawyers ahead of time. Here are the main law loan forgiveness and repayment programs you should know about, some details on how they work and an explanation of who they’re best for.

Public Service Loan Forgiveness (PSLF)

Public Service Loan Forgiveness (PSLF) aims to forgive eligible federal student loans after participants make 120 on-time payments while on the program. To qualify, you have to repay your loans on an income-driven repayment plan, and you have to work full time for an eligible employer, which could be a federal, state, local, or tribal government or a nonprofit organization.

You also have to have Direct Loans to qualify for PSLF. If you have other federal loans, they must be consolidated with a Direct Consolidation Loan before your monthly payments will count.

Best for: Public Service Loan Forgiveness (PSLF) is best for lawyers who plan to work for the government or in the nonprofit sector. Since this plan forgives all of your remaining debt once you make 120 payments and meet all other requirements, it’s also a good option for lawyers who have a high level of debt.

Income-driven repayment plans

With income-driven repayment plans, lawyers and others can pay a percentage of their discretionary income for 20 to 25 years before having their remaining loan balances forgiven. Plans that fall into this category include 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 provided they have eligible federal loans. You’ll pay 10 to 20 percent of your discretionary income while on these plans, though note that forgiven debts are considered taxable income in the year they’re forgiven.

Best for: If your income is low enough, your monthly payment could be as low as $0 on an income-driven repayment plan. For that reason, this option is best for lawyers with especially low incomes.

State Loan Repayment Assistance Programs (LRAPs)

Some states also offer their own Loan Repayment Assistance Programs (LRAPs) for lawyers, although relief options vary widely. States with their own LRAP program include Florida, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska (two programs), New Hampshire, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Vermont, Virginia and Washington, D.C. Kansas also has a LRAP program that is available in almost half of its 105 counties.

The amount of forgiveness you can qualify for depends on the state where you live and other factors. In the state of Minnesota, for example, the range of forgiven amounts is $1,077 to $5,742. In the state of Virginia, on the other hand, all participants get $5,000 in forgiveness.

Best for: Since state-based LRAPs can be used on top of other forgiveness programs you qualify for, they’re a good option for anyone who can meet their state’s requirements.

Law School-Based Loan Repayment Assistance Programs (LRAPs)

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.

At Boston College Law School, for example, annual awards for recipients have ranged from $500 all the way up to $7,000 in recent years. First-time applicants who attended the school in the last five years must earn less than $57,500 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 $65,000.

Best for: These programs are ideal for anyone who attended a law school that offers a LRAP, although you may not qualify unless you work in a lower-paying field.

Department of Justice Attorney Student Loan Repayment Program

Department of Justice employees can apply for this forgiveness program provided 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 benefit of $60,000 in forgiveness.

Best for: This program is available to lawyers with at least $10,000 in federal loan debt who work for the Department of Justice.

John R. Justice Student Loan Repayment Program

This loan forgiveness program applies to lawyers who have eligible federal student loans. You must also work full time in an eligible position to qualify, which typically includes working for a nonprofit organization or as a public defender. Qualified applicants can receive up to $4,000 in loan forgiveness per year, with a maximum benefit of $60,000 in debt relief.

Best for: This loan forgiveness program is geared toward lawyers who want to work as public defenders.

How to apply

Applying for a loan forgiveness program will look different for each program you’re considering. With that in mind, you’ll want to read through the terms and conditions of your program from start to finish, taking the time to read every word of fine print.

Generally speaking, you’ll need to work in a public interest position to qualify — potentially even for several years to a decade or more. You will likely need to have specific types of federal student loans as well, and you may not qualify at all if you have the wrong type of loans.

Applying for loan forgiveness requires you to fill out an application and submit proof that you’re met all of the program requirements. This could include proof of employment, proof of income, student loan statements and more.

Next steps

If you’re struggling with law school debt and not sure where to turn, any of the forgiveness programs outlined here could help. Just make sure you read the fine print so you know what you’re getting into and that you have the right type of student loans and career to qualify.

If you mostly have private student loan debt, then 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. Depending on your income and other factors, may even be able to qualify if you have bad credit or no credit history.

Learn more:

Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson began her career working in the funeral industry, which may make you wonder why she works in personal finance now. Yet, the funeral industry taught the author everything she needs to know about the value of one's money and time. Johnson left the mortuary business a decade ago in order to explore her passion for personal finance and travel the world, and since then, she and her husband have built a debt-free lifestyle that has them on the path to retire very wealthy in their 40s. Holly's love of budgeting also led to the creation of her debt payoff book, “Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love."
Edited by
Student loans editor