Given a lawyer’s propensity for high salaries, student loan forgiveness for lawyers isn’t often discussed. However, lawyers do have many forgiveness options. This article will cover the numerous ways lawyers can get their loans forgiven.
Before we dig too deep into the matter, it’s worth noting that all federal direct loans and federally guaranteed loans are eligible for loan forgiveness. Federal loans include subsidized and unsubsidized Federal Stafford loans, Federal Direct Consolidation loans, Federal Perkins loans (only when part of a Federal Direct Consolidation loan), and Federal PLUS loans. However, private loans are not forgivable. Let the proceedings begin.
Income-Based Repayment (IBR)
Under this method, a lawyer is able to keep payments low until the loans are eventually forgiven. Through this program, participants generally don’t pay more than 15% of their ‘discretionary income’ towards student loan repayment. ‘Discretionary income’ is anything you earn above the national poverty level (which is currently $11,490). A person need never pay more than the 10-Year Standard Repayment Plan amount. After 25 years of payments, the outstanding balance will be forgiven. Lawyer or not, everyone should look into this program.
Federal Public Service Loan Forgiveness (PSLF)
Should you enter these types of careers, your loan may be forgiven:
- The government (military service included)
- A 501(c)(3) nonprofit
- AmeriCorps or Peace Corps position
- A private public service organization
To qualify for Federal Public Service Loan Forgiveness, loans must be in the William Ford Direct lending program. Loans under the FFEL program can be consolidated into Direct loans. With this program, a lawyer is still required to make 120 monthly payments. At which time, the remaining balances will be discharged in full. 120 payments sound terrifying but if you couple this program with income-based repayment, the dollar amount you’ll be paying is low compared to what you could be paying for these loans.
Department of Justice Attorney Student Loan Repayment Program (ASLRP)
To qualify, you must have at least $10,000 in federal student loans.
Loans which are covered 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
This is a recruitment and retention program. The DOJ conducts an ‘open season’ recruiting process each spring. Any aspiring or current employee may request consideration. The selection is competitive and even when you are accepted, reexamination of eligibility will occur each spring.
Upon acceptance, you are committed to a 3-year term with the Department of Justice. Anyone who cannot complete a 3-year term in their position (political appointees, occupying attorneys, etc.) shall not be accepted.
Federal loans will be repaid to the issuer, not the lawyer personally. Any attorney who does not complete his or her service obligation will be required to repay the loans that had been forgiven up to the point of resignation. This is a competitive program.
John R. Justice Student Loan Repayment Program
The John R. Justice Student Loan repayment program provides assistance for state and federal public defenders and state prosecutors for at least 3 years. It’s renewable after 3 years. Benefits cannot exceed $10,000 in any calendar year and cannot exceed $60,000 per attorney. Attorneys with the greatest inability to repay their loans have priority.
The program is administered by the states. Funds are given to each state based on its population.
All attorneys hoping to enter into this program must remain in practice for at least 3 years. Application deadline is in the spring. The 2015 deadline was April 13, 2015. There are many loan forgiveness programs for lawyers which come and go. I’m happy to say this program has stood the test of time. It shows no sign of slowing down or disappearing.
Law School Loan Forgiveness Programs
At New York University Law for instance, you can get ALL your federal student loans forgiven. You first need to work in an eligible public interest position. You must remain in a public interest position for 10 years. You cannot make more than $80,000 per year. While those are fairly restrictive requirements, it is pretty spectacular you can become a lawyer without needing to worry about federal student loan repayment.
These programs exist at more than 100 law schools. They are mostly to encourage lawyers to enter public service roles.
See a list of 102 schools by clicking here. Click the links within to read about each school’s loan forgiveness program. No two programs are alike.
State-Specific Loan Repayment Programs (LARPs) for Lawyers
Perhaps your school doesn’t offer a loan forgiveness program. Good news, the state your school resides in may still offer a program to you. Twenty-four states (plus the District of Columbia) offer state-specific loan repayment assistant programs. Click on each state to pull up more information. The states include:
Arizona, District of Columbia, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Vermont, and Virginia.
Note: This list is current as of 6/11/15. However, please check with your state before getting too excited about a state plan. Some states such as Kansas only offer the program if you practice in certain counties. Right now Kansas only offers the program in 50 of the state’s 105 counties. Kentucky, Nebraska, Missouri, and Washington’s programs are temporarily suspended due to lack of funding.
It’s worth noting how many loan forgiveness programs for lawyers lose their funding:
- The John R. Justice Prosecutors & Defenders Incentive Act: Unfunded
- The Legal Assistance Loan Repayment Program:Unfunded
- The Loan Forgiveness for Service in Areas of National Need:Unfunded
However, the programs listed in this article seem to be here to stay!
To close, it’s worth repeating that it wouldn’t be right if teaching was the only profession eligible for student loan forgiveness. Rightly so, savvy lawyers can get assistance as well. Bundle as many of these forgiveness programs together as possible and you’ll be doing just alright. Who says lawyers have to be burdened with massive amounts of debt?