For aspiring lawyers, there’s only one way to pursue your passion: by attending law school. Even if you make a high salary after graduating, you’re stuck with repaying high education costs. The average law student loan debt is about $140,000.
That’s the situation Deborah Sweeney, CEO of MyCorporation, found herself in after graduating from Pepperdine University’s joint JD/MBA program with $80,000 in debt.
“I was lucky enough that my parents paid for my undergraduate degree,” she says. “But my law and business school cost me about $30,000 a year plus living expenses, which I had to pay on my own using a combination of federal and private student loans.”
Despite having an advanced degree, Sweeney was confused and overwhelmed and didn’t know how to pay off her mountain of debt. So she took time after the bar exam to hammer out an aggressive repayment plan. Her dedication yielded results — by age 28, just over five years after graduating from law school, Sweeney was debt-free.
4 tips for getting out of law school debt quickly
Here are Sweeney’s tactics for loan payoff that you can use to tackle your law school debt fast.
1. Work while you’re in school
Law school is demanding, but taking on a side hustle or part-time job can make a huge dent in your student loans. Sweeney taught aerobics, did paid internships, and worked for professors.
“You won’t necessarily pay off the debt with the amount you make,” she says. “But you can minimize the amount you take in loans by earning money while in your studies.”
You can look for teaching assistant positions for graduate students, search for firms that offer paid internships, or make use of the booming sharing economy to take on a side hustle — which you can continue after finishing school.
That’s what Kevin Han does. He works for Airbnb, Rover, Wag, Postmates, DoorDash, and more to make extra cash while working full time as a lawyer.
Every dollar you set aside from your earnings can go toward your student loan payments, and you can start paying down the debt while you’re in school. If you want to save the money for now, you can use it to make a big payment once you graduate.
Remember, you’ll spend months studying for the bar exam before your paychecks start rolling in. A side hustle can help cover that gap.
2. Don’t spend more than you need
Budgeting 101 says you should buy only what you need. Being especially frugal in the short term can help you pay off debt in the long run.
“I maintained a tight budget for my living expenses while in school and after I graduated,” Sweeney says. “Even though I made a good salary as a lawyer, I kept my spending in check and still do. I never have outstanding credit card debt. And about every three months, I adjust how much more my husband and I can afford to pay off so that we can pay off our home mortgage sooner.”
As you make more money, your goal should be to save more rather than spend more. This will help you not only pay off student debt but also establish good habits for other major purchases in the future, such as a car or a home.
Check on your needs before buying. Do you need a three-bedroom apartment with a wraparound terrace, or could you settle for a two-bedroom home? The money you save could make a big difference in accomplishing your financial goals.
3. Consider student loan refinancing
When Sweeney graduated, she was confused by her loans and knew she had to devise a simple plan to pay them off.
“Before I got my bar results, my loan payments started, and I was so confused because there were federal loans and private student loans,” she says. “It was all over the place. I recall that the loans kept getting moved around to different companies, which only added to the confusion.”
So the new grad worked hard to understand her payments and refinance her student loans at a lower interest rate with a single monthly payment.
Refinancing could help you get a lower interest rate and allow you to make just one payment per month rather than multiple payments on different loans. This can make it easier to track your money and increase your savings because you pay less in interest over time.
“Consolidating helped me gain perspective,” says Sweeney. “Once I had that information, I created a schedule for myself to pay more when I could afford to ($1,100 a month instead of the $700 I owed) in an attempt to pay down the loans quickly.”
Here’s a caveat: If you refinance your federal student loans, you could lose access to benefits such as income-driven repayment, deferment and forbearance, and loan forgiveness.
4. Use any extra money to pay down your debt
Bonuses are common for some lawyers, and you might be tempted to splurge with the extra cash. But you shouldn’t give in.
“When I started practicing law, I would get year-end bonuses,” Sweeney says. “I put every penny into paying off my loan. I always figured that if I kept earning and growing at this pace, eventually I’d have the loan completely gone. It worked!”
Even if you’re not getting big bonuses at work, you could use your tax refund or the cash your grandma gave for your birthday to pay down your debt. You should be living on a set budget, so any unexpected money shouldn’t affect your daily spending.
Sweeney is a good example of how simple budgeting habits can make a huge difference in paying down your student loan debt faster. The bonus of being a lawyer is that you might be able to command a higher salary and put more toward your debt repayment.
It all comes down to having a plan and budget you can stick to. That might take some effort upfront, but once you’ve established a routine, the debt will melt away.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.47% – 6.71%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|