7 Ways Lawyers Can Get Their Student Loans Forgiven

Today’s post comes from Andrew Josuweit. Andrew is the CEO of Student Loan Hero, a website with educational content and tools geared toward helping borrowers manage their student loans.

While earning a law degree is definitely a huge accomplishment, it isn’t exactly the golden ticket it once was.

According to the Bureau of Labor Statistics, more law students graduate each year than the number of open jobs. Recent stats also show that law students in particular may be racking up well over six figures in debt – an average of $140,000 in 2012 – by the time they leave school.

Fortunately, there are quite a few student loan forgiveness programs for those who are struggling to find a job or keep up with their loan payments.

If you’re a law student crushing under the weight of your own debt, here are seven sources of loan forgiveness for lawyers you should look into right away:

1. Federal Public Service Loan Forgiveness for Lawyers

Federal Public Service Loan Forgiveness (PSLF) isn’t just for low-paying professions. This program is available for lawyers, too, although you’ll have to work for a qualified employer – typically for the government or nonprofit sector – for a period of 10 years to be eligible. After making 120 consecutive payments, any remaining balances on your student loans will be forgiven.

2. Federal Perkins Loan Cancellation

Federal Perkins Loan Cancellation may be available to lawyers who work in public interest, either as a public defender or prosecutor, or as an attorney representing children. Typically, up to 100 percent forgiveness of Federal Perkins Loans is offered after five years of qualified employment.

3. John R. Justice Student Loan Repayment Program

The John R. Justice Student Loan Repayment Program offers special terms and loan forgiveness to lawyers working as public defenders. Under this program, candidates may receive up to $10,000 per year with a maximum award of $60,000.

State requirements vary, however, which is why all potential candidates should contact their state’s designated agency to inquire.

4. Herbert S. Garten Loan Repayment Assistance Program

The Herbert S. Garten Loan Repayment Assistance Program was created for legal aid attorneys with large, outstanding student loans. Qualifying for this program requires employment by one of the program’s grantees, plus outstanding student loans of $75,000 or more. Participants can receive up to $5,600 per year for three years of qualified employment and program participation.

5. School-Based Loan Repayment Assistance Programs (LRAPs)

Law students needing to repay massive student loans may shy away from low-paying jobs within the public sector, which is why some law schools have created programs that offer financial assistance and student loan forgiveness.

These programs often come with stipulations, including salary caps. This page offers the most up-to-date information on school-based LRAPs, plus how you can qualify.

6. Income-Based Repayment Options

If you have federal loans and don’t want to be tied down by a particular career path, consider one of these income-driven options:

• Income-Based Repayment (IBR): Payments are capped at 10 to 15 percent of your discretionary income over 20-25 years, depending on the specific program. After that, any remaining balances will be forgiven.
• Revised Pay As You Earn (REPAYE): The new REPAYE program caps monthly payments at 10 percent of your income for a period of 20 years. Loan amounts left over after this period will be forgiven.
• Income-Contingent Repayment Plan: Monthly payments are capped at the lesser of 20 percent of your discretionary income or whatever your payment would be on a fixed, 12-year payment plan. Balances are forgiven after 25 years of steady payments.

It’s important to note that forgiven balances are usually subject to taxes. However, it’s often still worth it for borrowers who racked up giant loan balances.

7. State-Based Loan Repayment Assistance Programs (LRAPs)

Many states also offer their own loan forgiveness and assistance programs specifically for lawyers. Most programs require you to be practicing law within the state in order to qualify.

The Bottom Line

Pursuing a law degree is incredibly expensive, but no one should have to give up on their career goals because of the outrageous cost of an education. Spend time investigating which federal and state-level forgiveness programs you qualify for so you can start living a debt-free life as soon as possible.