Law School Student Loans: How to Consolidate & Refinance
Kevin is a former fintech coach and financial services professional. When not on the golf course, he can be found traveling with his wife or spending time with their eight wonderful grandchildren and two cats.Read full bio
At a Glance
Law school is expensive. According to Student Loan Hero by LendingTree, the average student loan debt for individuals who completed law school in 2016 increased by 90% from what it would have cost them back in 2000. The average law school debt today is over $185,000. That’s in addition to the $35,000 or so that new lawyers still owe for their undergrad degree.
That’s a lot of debt to carry into a new career, particularly when it may take years to work your way up the ladder to make a decent salary. 50% of new lawyers are paid between $40,000 and $65,000 per year. Only 20%, the top of the class, are offered over $150,000 when they get out of school. Those on the bottom end of that scale need to do some creative financing.
Federal Student Loans Offer Better Repayment Options
Before opting for student loan debt consolidation, it’s important to review all the benefits you receive from keeping a federal student loan. If you’re a good lawyer, you can count on your salary going up in the future, so all you need to do is get through those early years. Federal student loans offer you the following to help you along:
- Income Driven Repayment: This is a program unique to the federal lending system. If you don’t make enough to pay your current loan payments, you can apply for an income-driven repayment plan. It will scale along with your salary.
- Forbearance: Students from prior years just received almost two years of forbearance from loan and interest payments. The loans didn’t go away, but they also didn’t need to worry about them during the pandemic or the economic crisis that followed.
- Deferment: Some private lenders offer this also, but not all. If you get stuck and can’t make a payment, federal lenders allow you to defer it to the end of the loan.
- Loan Forgiveness: This is a hot button political issue right now. Will Biden forgive student loans? If he does, it will only be federal loans that the forgiveness applies to. Those who refinance through private lenders won’t receive this benefit.
Personal Loans to Consolidate Student Loan Debt
For those with private student loans or students who want to consolidate their federal student loans, taking out a personal loan to pay student loans is your best available option. This should be a decision based on repayment terms and interest rates. You’ll want more reasonable terms, but lower monthly payments usually mean you’ll pay more in interest over the life of the loan.
There are dozens of online lenders, traditional banks, and credit unions where you can get a consolidation loan for student debt. Research them thoroughly, choose the right loan for your payoff goals, and remember that you’ll lose federal loan benefits after you do this. There’s no student loan debt forgiveness with private lenders.
Frequently Asked Questions
How can I get rid of my law school loans?
If your law school loans are federal student loans, you may be able to apply for an income-driven repayment plan or take advantage of loan forgiveness programs if they’re offered. With private student loans, your best option is a debt consolidation loan to reduce interest rates and negotiate more reasonable payment terms.