Becoming a lawyer can be a strong first step on a lucrative and prestigious career path. According to the Bureau of Labor Statistics, the median annual wage for lawyers was $119,250 in May 2017. However, it might cost you quite a bit before you can even take your state’s bar exam.
The average tuition at a private law school in the 2017-2018 academic year was $47,112, compared to $26,864 at a private law school. That doesn’t even account for how much you spent on your undergraduate degree before attending law school.
Another important point to keep in mind is that there is a huge range in pay for lawyers. You might not make six figures for a while, or at all depending on your selected specialty, employer size, demand, location, etc.
If you are looking for support paying back your education debt, the following programs might be worth looking into if you are interested in practicing in the public sector.
What is loan forgiveness?
Student loan forgiveness basically has to do with leaving the amount left on the student’s loan of people who undertake qualified jobs, such as teaching in a high-need area who has repaid the loan for a specific length of time.
Loan discharge is rare but can be granted to borrowers who can’t repay the loan for a variety of reasons such as death, disability, fraud, identity theft, and in very scarce circumstances, bankruptcy or closure of the school where the loan was taken.
It is necessary you know the things that should be in your budget as a student
Does student loans forgiveness cover all student loans?
Yes, loan forgiveness covers all federal loans. But, here is an exception;
Forgiveness isn’t an option for defaulted loans. If you have defaulted in loan repayment, you are not eligible for loan forgiveness but for discharge programs. In addition, you will need to use consolidation or rehabilitation to get defaulted federal student loans in good standing before they’re eligible for forgiveness programs.
Loan Forgiveness is not for private loans. Only federal loans can be forgiven.
What is Law school loan forgiveness?
Law school loan forgiveness is typically only for those in the public sector. But the best law school loan repayment program for you will depend not only on where you practice but also on your financial situation and what types of student loans you have.
If you have a low salary
Income-driven repayment plans base federal student loan borrowers’ payments on their earnings and family size. Most private lenders do not offer income-driven repayment, which is one reason federal student loans are often the best law school loans.
Income-driven plans are available whether you practice in the private or public sector. After 20 or 25 years of payments, your remaining balance is forgiven, but that amount is taxable. Public interest lawyers may qualify for faster or tax-free forgiveness through other programs.
If you’re a public interest lawyer
Public service lawyers generally receive lower wages than private-sector workers. The comparison is that college law loan forgiveness programs are generally only available to public interest lawyers:
Public Service Loan Forgiveness (PSLF)
This program isn’t specific to lawyers in the public sector, it could be another option for those seeking loan forgiveness. While the timeline for forgiveness is longer than other federal options, your total balance could be forgiven, making it a compelling option to consider.
Who is Eligible for the Public Service Loan Forgiveness Program?
Borrowers eligible for PSLF need to make 120 qualifying payments while working full-time for a qualifying employer. Only Federal Direct Loans are eligible for PSLF.
The Federal Student Aid website includes complete descriptions of what a qualified payment, qualified employer, and full-time employment mean for PSLF applicants. However, the only way to be positive that you qualify for Public Service Loan Forgiveness now or in the future is to complete and submit the Employment Certification form as soon as possible.
How to Apply for the Public Service Loan Forgiveness Program
After 120 qualifying payments (over at least 10 years), borrowers can apply for PSLF. The payments don’t need to be consecutive to apply. You will not automatically receive PSLF after 120 qualifying payments, you can then fill out and submit a PSLF application to receive loan forgiveness.
Department of Justice Attorney Student Loan Repayment Program (ASLRP)
For each year that you work for the Department of Justice, ASLRP participants could earn up to $6,000 in loan assistance, with a lifetime maximum of $60,000.
It is important to note that lawyers are still expected to make personal payments toward their federal student loans while participating in the program, and failure to do so may result in disqualification. According to the ASLRP website, “the Department will match the annual amount that the recipient pays on his or her qualifying Federal student loans (up to the maximum of $6,000 per calendar year).” However, “there is an exception for recipients whose annual base salaries are less than $84,000 – those individuals will automatically receive the annual maximum repayment amount.”
Who is Eligible for the Attorney Student Loan Repayment Program?
To be eligible, employees of the Department of Justice must have at least $10,000 in eligible federal student loans. In order to accept the award, candidates need to commit to a three-year service with the Department of Justice.
How to Apply for the Attorney Student Loan Repayment Program
Check out the ASLRP website and key dates page to learn more about this option and important deadlines for applicants. It can be a competitive program, so keep that in mind when applying.
John R. Justice (JRJ) Student Loan Repayment Program
If you’re a public defender, you can apply for the JRJ Student Loan Repayment program and earn up to $10,000 annually for a maximum of $60,000. Part of accepting the award is accepting a three-year service agreement and continuing to act as a public defender.
The award is given to each state with different requirements for each state. The first consideration is given to applicants who have the least ability to repay their loans and those who received JRJ benefits in the previous year.
Who is Eligible for the John R. Justice Student Loan Repayment Program?
Candidates must be employed as public defenders at an agency chosen by the state to which they are applying. Other requirements vary from state to state, so it is important to know the state’s requirements before applying.
How to Apply for the John R. Justice Student Loan Repayment Program
Each state provides its own funding for this particular program, so you’ll need to contact the state agencies designated by the governor to learn about additional requirements for applicants and how to apply within your specific state. Deadlines and application dates may vary by state.
Herbert S. Garten Loan Repayment Assistance Program
This program was created in 2005 for legal aid attorneys with large outstanding loans from the Law School and uses the lottery system to select approximately 70 attorneys per year. Selected individuals can earn up to $5,600 a year for three years of qualified employment and participation in the program.
The number of selected winners may change based on each year, depending on funding levels. According to the program’s website, “In 2018, they gave 80 legal aid attorneys a total of $1 million to help them pay off student debts.”
Who is Eligible for the Herbert S. Garten Loan Repayment Assistance Program?
To be eligible to enter this lottery, you must be an attorney working for one of the program’s beneficiaries, with a student loan debt of at least $75,000. Participating attorneys must use program funds to pay off qualifying law school loans and accrued interest.
How to Apply for the Herbert S. Garten Loan Repayment Assistance Program
Instructions for completing the application and renewing the applications are available on the program website, along with the cut-off and distribution dates.
Law school loan forgiveness programs are not mutually exclusive; you can use each you qualify for.
If you have Perkins loans
Perkins loans are federal low-interest student loans that have not been issued since 2017. If you borrow Perkins loans before then, you can pay off your balance in full in five years.
The Perkins Loan forgiveness is only available to lawyers who practice full time for a federal public or community defender organization. To be eligible, you must also have implemented these services as of August 14, 2008.
If you’re a high-earning lawyer in the private sector
Refinancing your loans can make sense if you have a good salary and will not be eligible for any loan forgiveness program. High-income, good credit and low debt/income ratio lawyers can save money by refinancing student loans.
Refinancing can change the terms of the loan, which generally allows you to lower the interest rate. But borrowers who refinance federal loans lose benefits like income-based repayment. Refinance law school loans only if you are sure you don’t need those options.
If you already have private law school loans and can qualify for a lower interest rate, it is generally not logical to refinance.
How much would refinancing save you?
Step 1: Know what you owe.
Enter details of your existing loan. More than one? Calculate your weighted average interest rate first.
- Loan balance ($)(required)
- Interest rate (%)(required)
- Remaining term (years)(required)
- Estimated monthly payment
Step 2: Check your rates.
The better your credit, the lower the rate you’ll likely get. Here’s what some top lenders offer:
Fixed: 3.75% – 8.77%
Variable: 3.5% – 8.72%
Fixed: 3.75% – 6.667%
Variable: 3.5% – 6.667%
Fixed: 3.22% – 6.45%
Variable: 3.49% – 5.64%
Fixed: 3.3% – 6.69%
Variable: 2.39% – 6.01%
Fixed: 3.39% – 7.75%
Variable: 2.7% – 7.87%
Fixed: 3.5% – 7.02%
Variable: 1.99% – 6.65%
Fixed: 3.23% – 5.53%
Variable: 2.01% – 5.8%
Fixed: 3.59% – 8.63%
Variable: 2.72% – 8.38%
Step 3: Run the numbers.
Enter details about your hypothetical new refinance loan to see what you could save. Use 5% if you’re unsure what rate you’ll qualify for.
- Loan amount ($)– $0
- New interest rate (%)– 5%
- New term (years)– 10
- Show detailed payment comparison?– Yes/No