It’s a common misconception that lawyers always make a high income. However, that’s not always the case. Even for those that are bringing in a six-figure salary, many also have significant debt to go along with it.
Some law school graduates may not even be able to find employment after law school. Of the law students who graduated in 2019 from American Bar Association-approved schools, 6.4% were unemployed and seeking employment as of April 2020.
Once graduates do find employment in the legal field, the range of salaries is vast. New graduates in 2019 hired as attorneys at legal aid organizations made an average of $54,325 while new graduates at large law firms earned an average of $190,000. Even with the disparity in income, both may be facing the average of $165,000 in student loan debt.
However, even with the student loan debt and wide range of incomes, working in the legal field can be a rewarding career that can also bring financial success. Depending on your sector of work, there may be student loan forgiveness options for lawyers to help pay off law school student loan debt. Here are some great options for law school loan forgiveness and debt assistance:
- Public Service Loan Forgiveness (PSLF) for Lawyers
- Department of Justice Attorney Student Loan Repayment Program (ASLRP)
- John R. Justice Student Loan Repayment Program
- Herbert S. Garten Loan Repayment Assistance Program
- School & State-Specific Loan Repayment Assistance Programs (LRAP)
- Air Force JAG Student Loan Repayment Program
- Student Loan Forgiveness for Attorneys With Perkins Loans
- Income-Driven Repayment Plans for Lawyers
- Student Loan Refinancing for Private Sector High Earning Lawyers
Public Service Loan Forgiveness (PSLF) for Lawyers
If you have federal student loans and work in a qualifying public service position, the Public Service Loan Forgiveness (PSLF) program is a great option to get law school loan forgiveness.
After making 120 monthly loan payments, the remaining balance of your federal student loans will be forgiven without any tax consequences. To qualify, you must be employed full-time with an eligible non-profit or government entity for the loan payment to count towards the required 120. In addition, you must have federal direct loans and be on an income-driven repayment plan.
Once you have made the required 120 payments, you can submit the PSLF application for the chance to your remaining balance forgiven. In order to ensure your employment qualifies and your payments have been accurately counted, be sure to submit the Employment Certification Form annually. This will provide you with a breakdown of the number of payments you have made and the number of payments remaining.
Department of Justice Attorney Student Loan Repayment Program (ASLRP)
The Department of Justice Attorney Student Loan Repayment Program (ASLRP) provides money for repayment assistance on student loans as an incentive for recruiting and retaining attorneys. Although it’s not technically loan forgiveness, it’s a great loan assistance option for lawyers. The program matches your loan payments and will provide up to $6,000 per year paid directly to the loan holder, with a lifetime maximum of $60,000 per attorney.
Each spring, the department opens the program to new participants. To be eligible for the program you must be employed as an attorney by the Department of Justice, have a minimum loan balance of $10,000 and have eligible loans for the program.
Eligible loans for this program include:
- Stafford Loans
- Supplemental Loans
- Federal Consolidation Loans
- Defense Loans (made before July 1, 1972)
- National Direct Student Loans (made between 7/1/72 and 7/1/87)
- William D. Ford Direct Student Loans
- Perkins Loans
- The Nursing Student Loan Program loans
- The Health Profession Student Loan Program loans
- The Health Education Assistance Loan Program loans
If you are selected for the highly-competitive program, there are some provisions to be aware of. You will be required to serve three years for the department or be forced to return and pay taxes on all the money you received.
John R. Justice Student Loan Repayment Program
If you are working as a prosecutor or public defender at the state level, you may be eligible for loan repayment assistance from the John R. Justice Grant Program.
Since 2010, this program has provided money to states to encourage qualified attorneys to apply for these positions and retain them. To apply for loan assistance through this program, you must contact your state agency that has been designated to administer the program.
Each state’s criteria may differ slightly, however, the main eligibility requirement is you must be a full-time employee with a criminal caseload. If you are awarded money, you must sign an agreement that you will continue working for three years in your position. The awarded money will be paid directly to your student lender.
Herbert S. Garten Loan Repayment Assistance Program
Are you working as an attorney helping with underserved populations at a legal aid organization? You may be eligible for law school loan forgiveness through the Herbert S. Garten Loan Repayment Assistance Program.
This program provides loans to attorneys for up to $5,600 per year for three years. These loans are to be used to pay your qualifying law school student loan debt. If all criteria are met for the program, the loans are forgiven and you have less student loan debt to pay.
To be eligible, you must be employed by one of the participating grantees and have student loan debt of at least $75,000. To apply, you can use the online application system directly on the program’s website. The application becomes available in March and is only open for a specified period of time. The selected attorneys are determined by a lottery system, and in 2019, 125 legal aid attorneys were awarded assistance for their loans.
School & State-Specific Loan Repayment Assistance Programs (LRAP)
If you work in the public interest sector or government, you may be eligible for loan repayment assistance from your law school. Programs are intended to attract lawyers to these fields by easing the burden of their student loan debt.
These programs offer student loan forgiveness for lawyers by providing loans to pay student loan debt. These loans are then forgiven once a term of service is completed. There are some income limitations to these programs. The American Bar Association LRAPs provides extensive information on law schools that have programs.
If your law school does not have an LRAP program, you may be able to find one through your state. Here are the states with current programs:
- District of Columbia: This program offers forgivable loans of up to $12,000 per year to attorneys employed with a qualifying 501(c)(3) providing civil legal services to low-income DC residents. The application deadline is typically in October with loans being awarded the following January.
- Florida: The Florida Bar Foundation provides a loan of $5,000 per calendar year that is forgiven annually if qualifications are met. The loan is expected to be used to pay down student loan debt. To qualify you must be employed at least 50% of the time with a civil legal aid organization that receives funding from the Florida Bar Foundation.
- Indiana: Applicants must be employed by a qualifying civil legal aid and earn less than $70,000. A $5,000 loan is paid directly to the participant and must be used to pay student loan debt.
- Kansas: This program provides student loan assistance of up to $15,000 over 5 years if you live in a county designated as a Rural Opportunity Zone.
- Louisiana: The Louisiana Bar Foundation provides loans of up to $5,000 per year to attorneys working at legal aid organizations supported by the Foundation. The loan is forgiven after 12 months of employment at the legal aid organization.
- Maine: The Maine Justice Foundation provides assistance to attorneys working in public service at a participating legal service provider. Check with your employer to see if they qualify for this program.
- Maryland: Maryland residents with an income of less than $60,000 that provide public service to low-income or underserved state residents can qualify for an award to help pay student loan debt. The award amount is based on the amount of your student loan debt.
- Minnesota: To be eligible, you must be employed full-time at an eligible non-profit organization as an attorney. Income and assets will be considered. The application is available in May and November and is a competitive process.
- Montana: The Montana Justice Foundation provides assistance to attorneys working at qualified legal aid organizations. Applications are accepted in the spring and fall.
- New Hampshire: The New Hampshire Bar Foundation provides law school loan assistance to qualifying attorneys working for eligible organizations. No more than $8,000 per year per applicant is awarded. The awarded loan is discharged once the recipient has completed a year of service with the qualifying organization.
- New Mexico: Available for attorneys in qualifying legal services organizations, public defender offices and district attorney offices. Salary cannot exceed $75,000, and you are required to work for 3 years in public service law.
- New York: To be eligible you must be employed as a District Attorney, Assistant District Attorney, or Indigent Legal Services Attorney. You must have been employed for at least 4 years but less than 9 years. Awards of $3,4000 per year are given with a maximum of $20,400.
- North Carolina: Loan assistance is available for public interest attorneys in Mecklenburg County. Forgivable loans are provided to attorneys with the least ability to repay their loans.
- Ohio: Loan repayment assistance is provided to attorneys employed at organizations that receive funding from the Ohio Access to Justice Foundation.
- Oregon: Provides assistance to attorneys employed at legal aid organizations or other non-profits that represent low-income individuals, public defenders and deputy district attorneys. Must have a salary of less than $70,000 with debt of more than $35,000.
- Pennsylvania: The attorney’s salary may not exceed $66,000. Loans are given to eligible attorneys and are forgiven and canceled after meeting the 12 months of employment requirement at a qualifying organization.
- Texas: Provides assistance to attorneys employed full-time at legal aid organizations with salaries of less than $80,000.
- Vermont: The Vermont Bar Foundation provides forgivable loans to attorneys employed full- or part-time at non-profit organizations serving the civil legal needs of low-income people, or to employees working for the Office of the Defender General. A recipient’s salary cannot exceed $60,000 to qualify.
Air Force JAG Student Loan Repayment Program
Serving in the military with student loan debt may make you eligible for military student loan forgiveness. If you have been employed as a JAG officer with at least one year of service, you can be eligible for the Student Loan Repayment Program, which provides up to $65,000 towards student loan debt. The award is made directly to your student loan lender over a three-year period.
Student Loan Forgiveness for Attorneys With Perkins Loans
If you have Perkins loans and are looking for public defender student loan forgiveness, you may consider Perkins loan cancellation. Qualifying loans can be canceled after five years of service at the organization if you worked full-time and began on August 14, 2008, and later. To apply for cancellation you must contact the school that provided the loan or its servicer.
Income-Driven Repayment Plans for Lawyers
Lawyers with federal student loans that don’t qualify for student loan forgiveness may still be able to find student loan assistance options. Income-Driven Repayment (IDR) plans, for example, modify your payment amount based on your earnings.
- Revised Pay As You Earn Repayment Plan (REPAYE Plan): Your payment is based on your family size and income and is generally 10% of your discretionary income. The term length is 20 years for undergraduate loans and 25 for graduate loans.
- Pay As You Earn Repayment Plan (PAYE Plan): The payment is 10% of your discretionary income but your payment cannot increase to more than the payment on the standard 10-year repayment plan. The term length is 20 years for all loans.
- Income-Based Repayment Plan (IBR Plan): The payment is 10 or 15% of your discretionary income, depending on when you borrowed the loans. Your payment will never be more than the 10-year standard repayment amount. The term length is 20 or 25 years depending on when you borrowed the loans.
- Income-Contingent Repayment Plan (ICR Plan): The payment can be up to 20% of your discretionary income and the loan term is 25 years.
Student Loan Refinancing for Private Sector High Earning Lawyers
Lawyers employed in the private sector earning higher incomes likely will not qualify for student loan forgiveness. However, student loan refinancing may be an option. By refinancing law school student loan debt, you could reduce your monthly payment and save in interest costs.
There are many benefits of student loan refinancing in addition to savings. You may be able to combine multiple loans into one, lock in a lower interest rate and even change your loan repayment term to better fit your financial goals.
If you’re considering this option, ELFI’s blog, How to Refinance Student Loans can help you to understand the first steps.
How Much Can Refinancing Save You?
Refinancing student loan debt can provide significant savings, especially if you have a large amount of student loan debt. How much refinancing could save you depends on many factors including your current interest rate, your credit score and your debt-to-income ratio.
Based on those factors you may be able to save thousands of dollars in interest costs over the life of the loan. To get an idea of how much you could save, use ELFI’s student loan refinancing calculator.*
Refinance Your Law School Student Loans With ELFI
ELFI makes it easy to get started with student loan refinancing.* When you refinance your student loans with ELFI, you can count on:
- A quick, convenient prequalification process that will not impact your credit score
- A personal loan advisor assigned to assist with your case
- Coast-to-coast service across the entire U.S. and Puerto Rico
- No application fees, origination fees, or prepayment penalties
Contact our team today to learn more about student loan refinancing with ELFI!