The average law school student leaves school owing $160,000 in student loan debt, according to EducationData.org. If you’re one of the 74% of law school students with loans, you might be thinking about how to pay off law school debt as painlessly as possible.
While paying off law school debt isn’t easy, there are strategies you can use to conquer your loans. Here are some tips for paying off your law school loans, followed by stories of three lawyers who managed to pay off their law school debt ahead of schedule:
- How to pay off law school debt: 5 helpful strategies
- How long does it take to pay off law school debt?
- How these 3 lawyers paid off their law school debt fast
From applying for income-driven repayment to refinancing your loans for lower interest rates, these five strategies will help you manage your law school debt.
1. Consolidate your federal student loans
2. Apply for income-driven repayment
3. Make extra payments on your student loans
4. Consider refinancing your student loans for better rates
5. Pursue student loan forgiveness
If you owe multiple federal student loans from your undergraduate studies and law school, it might be worth consolidating them to simplify repayment. With Direct loan consolidation, you can combine your student loans into a single monthly payment.
You can also apply for a new repayment plan if the standard 10-year plan doesn’t work for you. Income-driven plans such as Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE) and Income-Based Repayment (IBR) can be especially helpful since they offer some relief on subsidized loans.
While federal student loans are automatically placed on the standard 10-year repayment plan, they don’t have to stay there. If you need to make your payments more affordable, consider applying for an income-driven repayment plan.
Income-driven plans adjust your payments to 10% to 20% of your discretionary income while extending your loan term to 20 or 25 years. If you still have a balance after this time, the remainder will be forgiven.
The REPAYE, PAYE and IBR plans (as mentioned in the previous section) can be especially helpful for law school graduates with high debt loads since they come with an interest subsidy. If your monthly payments don’t cover all the interest that’s accruing on your loans, the government might step in to help.
Here’s how it works:
- REPAYE covers 100% of the interest on your subsidized loans for up to three consecutive years and 50% of the interest after that. It will also pay 50% of the remaining interest due on your unsubsidized loans throughout your term.
- PAYE and IBR cover 100% of the interest on your subsidized loans for up to three consecutive years. You’ll pay the interest after that. You’re also responsible for the interest that accrues on your unsubsidized loans.
Because of its more robust interest subsidy, the REPAYE plan is likely your best option. However, compare the details of all income-driven plans to find the one that’s most beneficial for your individual situation.
As your income increases, you might be able to pay more on your student loans to chip away at your debt faster. Even if you’re on an income-driven repayment plan, you can make extra payments on your student loans at any time without penalty.
Even occasional extra payments can help you cut down on interest and get out of debt ahead of schedule. Play around with our prepayment calculator to see how extra payments on your student loans would impact your repayment schedule.
For example, let’s say you owe $100,000 at a 5.0% interest rate. Over 10 years of fixed payments, you’d pay $27,279 in interest. But if you could throw an extra $200 per month at your loans, you could save $5,621 in interest and get out of debt nearly two years faster.
If you do choose to make extra payments on your loans, make sure that your loan servicer is applying them directly to your principal balance and not saving them for the following month’s payment.
One of the hardest parts of paying off student loans is keeping up with interest, especially when you’ve got a large amount of debt. As you saw in the previous example, $100,000 of debt accrues nearly $30,000 in interest over 10 years.
But if you can lower your interest rate through refinancing, you can keep more of your hard-earned money in your own pocket. Banks, credit unions and online lenders offer refinancing options to borrowers with strong credit and stable incomes.
Depending on your credit, you could qualify for a lower interest rate than you have now. Since many lenders let you prequalify for refinancing online with no impact on your credit score, it’s worth exploring your options.
Just note that refinancing federal loans turns them private, making them ineligible for federal repayment plans, such as income-driven repayment and loan forgiveness programs. Make sure you don’t need any federal benefits before refinancing your federal loans with a private lender.
You might also explore your options for student loan forgiveness for lawyers. The Public Service Loan Forgiveness program, for example, will forgive your federal years after 10 years of working in a nonprofit or other qualifying organization.
Other programs, such as the Department of Justice Attorney Student Loan Repayment Program and the John R. Justice Student Loan Repayment Program, also offer significant student loan assistance to qualifying lawyers.
You might also find a student loan repayment assistance program from your state or alma mater. It’s worth exploring your options for student loan forgiveness, especially if you owe a large amount of debt.
Note that some of these programs require you to work in the public sector, which could mean you earn a lower salary than you would in the private sector. If you’re going to pursue loan forgiveness, make sure that any requirements are in line with your own professional and financial goals.
The amount of time to pay off law school debt will vary, as it depends on factors such as your total debt balance, income and repayment method. According to EducationData.org, the average lawyer working in the public sector will take 26 years to pay off their law school debt if they use 20% of their income.
The average student borrower takes 20 years to pay off their student loans, with some taking 45 years or longer to become debt-free. However, you might be able to pay off your loans faster if you use some of the strategies discussed above.
If you can find ways to increase your income and keep your living expenses low, you could use any leftover money each month to pay off your loans faster. As mentioned, you might also get out of debt ahead of schedule if you can qualify for student loan forgiveness.
Paying off law school debt ahead of schedule isn’t just a fantasy. These three lawyers graduated with serious law school debt — but managed to beat it back.
Each had their own method, from leveraging a well-timed investment to using strategic repayment tactics. They’re lawyers just like you who turned an expensive education into one that paid for itself through work they feel passionate about. Here’s how they did it:
- $125,000 paid off in 8 years (Joshua Berman)
- $120,000 paid off in 3 years (Evan Walker)
- $70,000 paid off in 8 years (Kyle Dickmann)
Joshua Berman’s law school debt repayment was untraditional. But so was his foray into the field of law.
In 2009, Berman graduated into one of the worst legal job markets in history and had a $100,000 job offer rescinded because of the market. He ended up in a paralegal position earning $50,000 per year, and even that job was difficult to get given the number of lawyers looking for work.
Still, Berman paid off his $125,000 of student loan debt in only eight years. And it was all because he bought a home that turned into a great investment.
“I bought a house in an area I thought would have great potential for growth,” he explains. “A year and a half later, my home’s value skyrocketed. I refinanced the mortgage, cashed out the equity and paid off the loan.”
Although this payoff method might be untraditional, Berman has no regrets. His student loan interest rate was 7.785% — much higher than his new mortgage rate of 3.50%.
That fact speaks to the important question of whether you should pay off your student loans or invest your money. Many times, the answer reveals itself in the interest rates.
Of course, it’s not easy to buy a home when you’re deep in debt. For Berman, several things helped.
He and his wife chose to buy a foreclosure from a contractor, who then renovated the home. They also designed a basement apartment for his brother to live in for one year, which he was willing to pay for in advance so they’d have enough cash to close on the home.
Between those factors and the gift money he and his wife received from their wedding, they were able to purchase the house that would eventually enable them to pay off his law school debt. And Berman kept his wife in mind the whole time.
“I wanted to get rid of the loan as quickly as possible because I felt it was holding me and my wife back,” he says. “She married into my loan, but I wanted it to be as little of a burden as possible for as short of a time as possible.”
Berman’s story highlights the changing tides of luck — and the importance of making the most of every opportunity you have.
Here’s Berman’s advice to young lawyers in debt: “When I graduated law school, I truly felt like I would never pay off my loan. Every month I made a payment, it seemed like I would never be done. But the best thing I think you can do is focus on developing as a professional, and the opportunity to pay off the loan will follow.”
Evan W. Walker graduated with $120,000 in law school debt.
But with the help of the debt avalanche method, he paid it all off.
“I paid down the loans with the highest interest rate first,” he explains. “I took the smallest of those and paid it off first. Then, I moved on to the second-highest, etc., until I paid off all of those loans. Then, I started paying the smallest of the lower-interest-rate loans and set a weekly limit of money I was willing to spend.”
Even with a strategy in hand, it wasn’t always easy. During that intense three-year repayment period, Walker drove an old beater car, and his wife covered the rent, utilities and groceries — without having anything extra to save.
That’s a large reason Walker credits not only discipline but also a supportive spouse with the success.
“My wife is a generous and kind woman,” he says. “We both knew it was best for us both that my loans were paid off as soon as possible. I was determined to see it done.”
Now that he’s debt-free, Walker has the future in mind. He plans to “run a successful solo practice, support [his] family and give.”
Kyle Dickmann, founder of Dickmann Tax Group in Denver, graduated with a student loan balance of $120,000.
But since his graduation in 2009, he’s paid off more than $70,000. Here’s how:
- He chose a 30-year student loan repayment plan rather than a 20-year plan, lowering his monthly payments and making them more manageable.
- Whenever he had extra money, he paid an individual loan in full rather than applying it toward his total debt. That strategy aligns with a method called the debt snowball.
- He tried to think of his law school loans as a “mortgage” for his career, which inspired him to keep current on his loans.
Because the interest rate on his loans is relatively high, he isn’t tempted to use his funds for investment instead of repayment.
“My average [interest rate] exceeds 7.00%,” he explains, “so there really isn’t a better ‘investment’ tool to use than the repayment of my student loans.”
Dickmann also finds motivation in his work, especially because his firm helps people settle their tax debt. He helps others experience the same relief he feels when he pays off more of his law school debt.
“Most of our clients are struggling financially, and we end up being their last option before bankruptcy,” he says. “Hearing the appreciation in their voice after the debt has been settled never gets old.”
But that doesn’t mean staying the course on debt payoff is easy, even for Dickmann. He and his wife love to travel — but his debt means taking more quick road trips rather than grand world tours.
Although Dickmann and his wife have made this and other lifestyle sacrifices, he sees it as a reasonable trade-off for having gone to law school. And as frustrating as debt can be, it has helped Dickmann create the life of his dreams.
“I would certainly do this all over again,” he says, “but I’m kind of lucky in that I’ve been able to start a company (which is something that I’ve always wanted to do). And so far it’s gone well enough that I’ve been able to pay my debt off faster than I would have expected going into it.”
There’s a light at the end of the tunnel for law school debt
Graduating with six figures of debt isn’t easy. But as these stories illustrate, there is a light at the end of the tunnel.
If you need some tools to help you along the way, consider refinancing your student loans at a lower interest rate (although you should weigh the pros and cons before refinancing federal loans with a private lender). You also could consider an income-driven repayment plan to ease your monthly burden, perhaps with the plan of increasing your payments once you’re making more money.
You survived four years of undergrad study, three years of law school, high-intensity internships and the bar exam. If you can do all that and come out the other side, what could student loan debt possibly have on you?
If you’re feeling motivated to conquer your debt as quickly as possible, check out these additional strategies for paying off student loans fast.
Interested in refinancing student loans?Here are the top 9 lenders of 2022!
|Lender||Variable APR||Eligible Degrees|
|1.74% – 8.70%1||Undergrad & Graduate|
|1.74% – 7.99%2||Undergrad & Graduate|
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|1.89% – 5.90%4||Undergrad & Graduate|
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
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2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 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%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.
3 Important Disclosures for SoFi.
Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for Navient.
6 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.
7 Important Disclosures for PenFed.
Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
8 Important Disclosures for CitizensBank.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed interest rates range from 2.99%-8.63% (2.99%-8.63% APR).
IS Variable Rate Disclosure: Variable Rates advertised are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.