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Best Student Loan Forgiveness For Lawyers

Best Student Loan Forgiveness For Lawyers

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:

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:

Lender

APR:

Fixed: 3.75% – 8.77%
Variable: 
3.5% – 8.72%

Get started

Lender

APR:

Fixed: 3.75% – 6.667%
Variable: 3.5% – 6.667%

Get started

Lender

APR:

Fixed: 3.22% – 6.45%
Variable: 3.49% – 5.64%

Get started

Lender

APR:

Fixed: 3.3% – 6.69%
Variable: 2.39% – 6.01%

Get started

Lender

APR:

Fixed: 3.39% – 7.75%
Variable: 2.7% – 7.87%

Get started

Lender

APR:

Fixed: 3.5% – 7.02%
Variable: 1.99% – 6.65%

Get started

Lender

APR:

Fixed: 3.23% – 5.53%
Variable: 2.01% – 5.8%

Get started

Lender

APR:

Fixed: 3.59% – 8.63%
Variable: 2.72% – 8.38%

Get started

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
  • Calculate
  • Show detailed payment comparison?– Yes/No

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