Law school often promises a rewarding future, both monetarily and personally, which is why so many high-achieving high school and undergraduate students set off on the path to graduating with a law degree. However, along with medical school, law school is one of the most expensive post-graduate programs you can choose, and paying off your law school debt after graduation is no small feat.
According to recent figures for 2017, law school debts average around $115,876 and often climb much higher than that. If you’re going into law school or you’re already studying law, you’d be wise to consider some of the best ways to pay off law school debt.
One comfort you can take when you’re facing seemingly-insurmountable law school debt is that, after graduation, you’ll be able to slide right into a high-powered, high-paying legal job. Right? Well, not always.
Plan Ahead – Know Your Prospects
As with any degree program, one of the best things you can do is analyze your job prospects, realistically and practically, before you ever step foot on campus. If your high school or undergraduate program supports internships, that’s a great way to get your foot in the door and make connections with the people and businesses who could end up employing you or helping you along your way after you graduate.
Be Willing to Relocate
Many law school grads get out of school and expect to immediately walk into the high-paying job of their dreams. Unfortunately, today’s economy means that’s usually not the case. If you’re serious about repaying your student debt—and you should be—you’ll need to consider relocating for higher-paying work and/or lower living costs. Look for somewhere that combines the two, and you’ll be one big step closer to a debt-free life.
Pay Down The Law School Debt Aggressively
If you find yourself with the option, one of the best ways to pay off your law school debt can be to buckle down and do it as quickly as possible. This may sound easier said than done, and it is: being truly aggressive in paying off your law school debt usually means making sacrifices when it comes to other parts of your life.
Living on Less (Making a Budget)
It may seem obvious, but an important step in aggressively paying back your student loans is dedicating as much of your budget as possible towards your loan payments. Creating a fool-proof budget can go a long way in minimizing your student debt struggle after graduation.
Student loan payments can climb into the thousands-per-month, so the less you can spend in other areas, like living expenses and entertainment, the better. If you can find affordable help, an accountant or friend who’s good with numbers can help you determine exactly how much money you need to set aside every month for loan repayment.
Moving in with the Parents
Nobody wants to face the fact that their financial situation has forced them to move back in with their parents when they’re in their 20s or 30s. That being said, despite the social stigma of what’s assumed to be a step backward in the game of life, moving back in with your parents or other family members might be your smartest option when facing a mountain of debt.
Relying on the support of family can help you quickly pay back at least some of your debt, thus lowering the overall amount of interest you’ll end up paying. Even if you can technically afford to live on your own, there’s no shame in buckling down for a few months to pay down some of that debt while you have the chance.
Public Service Loan Forgiveness (PSLF)
Making practical decisions and changes in your life to adjust to your new-found debt status may be the most important step in paying back your law school loans. However, the government also offers certain special programs that may allow you to erase some of your debt if you fall into the right categories.
The Public Service Loan Forgiveness (PSLF) Program is a federal student aid program that forgives the remaining balance of government workers’ and nonprofit employees’ Direct Loans.
How Does PSLF Work?
Studentaid.gov states that the program may forgive (erase) your remaining Direct Loan debt after you’ve made 120 qualifying monthly payments, with a qualifying repayment plan, while working full-time for a qualified employer.
Do I Qualify for PSLF?
To qualify for the Public Service Loan Forgiveness Program, your loans must be Direct Loans or other federal loans which have been consolidated into a Direct Consolidation Loan. Make sure your payments are counted toward the total number of 120 qualifying payments being enrolled into an Income-Driven Repayment plan.
Loan Payments Counted Toward PSLF
- Direct Loans
- Other federal loans that have been consolidated into a Direct Consolidation Loan
Loan Payments Not Counted Toward PSLF
- FFEL Program, Federal Perkins Loan, or other loans which are not—or not yet—consolidated into a Direct Consolidation Loan
Which Jobs Qualify You for PSLF?
In addition to making the right type of loan payments, you must also be employed full-time (your employer’s definition of full-time or at least 30 hours per week, whichever is greater) by a qualifying employer to qualify for loan forgiveness under the PSLF program.
Qualified Employers for PSLF
- Government organizations
- Tax-exempt not-for-profit organizations
- Other not-for-profits that provide qualifying public services
- Emergency management
- Military service
- Public safety, or law enforcement services
- Public health services, public education or public library services
- School library and other school-based services
- Public interest law services
- Early childhood education
- Public service for individuals with disabilities and the elderly.
Another option offered by the government to help you repay law school debt is income-driven repayment (IDR). This may apply to you if your income is low compared to your student debt. There are four different type of IDR plan, each with slightly different terms. However, each plan results in your paying about 10% to 15% of your monthly income for a term of 20-25 years. If you qualify, your student loans will then be forgiven after the 20- or 25-year repayment term.
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