How to Pay Off Your Law School Loans


Back when I was graduating college, I had a lot of ideas about what I would do to earn money, all of which involved going back to school. My real dream was to become a college professor, but the idea of not knowing where I might end up living someday scared me off a bit (a lot). Then I thought about going to law school. My love of To Kill A Mockingbird notwithstanding, I never had any dreams of becoming Atticus Finch. Rather, going to law school just seemed like the logical thing for someone with a degree in the humanities to do. Sure, I had my time in the sun studying English literature, but that wasn’t going to put food on my plate.

My first hesitation was when I got spooked by the cost of three more years of schooling. But, if I’m being honest, it wasn’t just the price that scared me. I wasn’t passionate about studying law, period. If I had been, I would probably be working as a lawyer now, regardless of the cost of law school. I wanted to be a writer and, frankly, there’s no need for a graduate degree to make that happen. Writers just have to write, write, and write some more until it works out.

But what about those of you who did follow your dreams into the field of law? Especially those of you who are saddled with probably more debt than you even bargained for? You’ve probably been told not to complain, that the money you’re earning is more than you’d make otherwise. Or that you knew it was coming so it might be time to just get on with it. I’m not here to tell you that. I’m here to talk about what you can do, in addition to using ReadyForZero, to strategize a way to get out from underneath those law school loans and pave the path to financial freedom.

Explore Public Service Options

The first thing you should do as a new lawyer is to determine what kind of work you want to do. And if you have any interest at all in the public sector, don’t be scared off by the lower pay. Public sector jobs could make you eligible for Public Service Loan Forgiveness, meaning your loans could be forgiven after 120 consecutive payments on eligible loans. In other words, you don’t have to take that firm job just because it pays more.

Look Into Fellowships

Aside from working for already existing public jobs, another option is to apply for a fellowship. For example, Equal Justice Works provides fellowships for lawyers looking to make a positive change in their communities. This could make you eligible for student loan forgiveness or temporary payment relief while allowing you to use your law degree specifically to help a cause that you hold near and dear to your heart. Of course, these fellowships aren’t easy to come by. And they’re not for everyone. But if you have a cause you care deeply about and a plan of action that you could pursue if given the resources to do so, this may be an option for you.

Get Strategic About Repayment

If working at a firm or hanging your own shingle is more your style, you still have options to help. For lawyers starting their own practice, you can see if you’re eligible for deferment or forbearance while you’re still getting your income in order. Once you do so, or if you’re at a firm, then it’s time to start getting strategic about repayment. (Remember, while deferment and forbearance are helpful, unsubsidized loans may still accumulate interest during this time frame.)

One way to pay your loans off faster without having to use all of your extra income to do so is by making biweekly payments. Biweekly payments means you would split your monthly minimum in half and pay that amount every other week. This equals one extra payment per year and can have a huge impact on your overall debt payoff – shortening the time spent on repayment and increasing the amount of interest saved.

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Use Taxes to Your Advantage

If you are working at a firm and earning higher income, then getting placed into a higher tax bracket will certainly eat into your pay. However, the interest you’re paying on your student loans is tax deductible, so don’t forget to include that in your yearly taxes. (The same goes for anyone with federal student loans.) And no matter how much you’re earning, when you do get that refund, consider putting it right back onto your debt. While it’s not the most fun option for a windfall, placing a large amount of extra onto your debt (especially when it goes straight to principle) will significantly reduce your repayment term and amount of interest paid.

Keep It Simple

Lawyers work a lot. That means it can be challenging to stay frugal by doing things such as packing lunches and cooking dinner. Make the time to do so. By avoiding ordering meals out, you can save hundreds of dollars a month and keep your health in check no matter how insane your schedule gets. Another great way to save money so more can be applied to your loans is to continue living like a law student for as long as possible.

Sure, three years of living like a law student was probably enough. And continuing this trend is difficult when you work in an environment in which you’re expected to dress to perfection every day. However, that doesn’t mean you can’t continue living with roommates and even socializing in the same places you did as a law student. If you spend a few years keeping it simple like this (and applying the money saved to your loans), then you can reach debt freedom faster and upgrade your lifestyle accordingly. Adding a mortgage and credit card debt to student loans just doesn’t seem worth the early upgrade.

Paying off law school debt isn’t a short game. But it takes an incredible amount of perseverance and tenacity to get through law school in the first place (and also to work in the field of law). Use that determination to your advantage and you can face a lifetime of work you love without the lifetime of student loan stress.

Image Credit: Steve Calott

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  • ValleyForSanity


    • It’s certainly not an easy path, but for some people it’s exactly the right path. Is your opinion based on your own experience?

      • ValleyForSanity

        This article assumes that people have the option of public service jobs, and also the option of law firm jobs, but take firm jobs for the money. In my experience, and based on statistics, law school grads have mountains of debt and zero job options.

        • Shannon_ReadyForZero

          I was writing on the assumption that graduates would pursue either public service, firm, or creating their own practices. However, you are correct that options are becoming more limited as the economy is slow to grow and due to the competition among law graduates for the jobs that exist.

      • ValleyForSanity

        You can only deduct $2500 in student loan interest, which starts to phase out at $65k and ends at $80k (income). So that’s not helpful to folks working at firms.

  • Jay Dee

    I have to agree with ValleyForSanity that law school is a bad option for many. I’ve worked at a law school (and am a law school grad myself) and cannot tell you how many INCOMING law students don’t want to be lawyers or don’t know what they want to be but will fork out 125k+ for a degree that isn’t versatile (no matter what nonlawyers keep telling you)

    • Shannon_ReadyForZero

      I think it has long been thought that a law degree is a great “in” for a career – even a career outside of law. Now, with the cost of law school and the heavy competition for jobs after, law school should definitely only be pursued if it’s an absolute passion.

    • Jay Dee

      Also, I would add that this particular article is way too generic. For law school grads, I would also recommend seeing if their law school has a public interest loan protection program . . .that is if they can get a public interest job.

  • Dee

    You can take an interest deduction on your student loans if you make over a certain amount.

  • Dee