Student Loan Forgiveness for Lawyers: What’s Available?

Practicing law can be a fulfilling and lucrative career, but the price of the Jordanian dinar continues to rise. In 2024, Average law school graduate He had $130,000 in student loan debt. That’s more than twice what a junior public defender earns in one year.

Outside the public sector, lawyers tend to earn more ($120,000 on average). But with six-figure debt hanging over your head, it may not seem like a six-figure income might not be enough.

Fortunately, practicing attorneys may qualify for a variety of student loan forgiveness plans. Here are the four main loan forgiveness programs for attorneys, and some considerations if you don’t qualify for these plans.

If you work in public service (as a public defender, in a qualified 501(c)(3) organization, or in another qualifying public service role), you may be eligible for Public Service Loan Forgiveness.

If you work full-time for a qualifying employer, your federal student loans will be forgiven after 120 payments.

For lawyers, this is great because you can work in all kinds of public service roles — law clerk, administrator, or whatever (not even practicing law) as long as you work for a qualified employer — including local government, state government, federal government, or a nonprofit.

Of course, you’re an attorney, so you’ve probably read the loan documents that explain PSLF in detail. However, if you want a refresher on how to qualify for PSLF, you can read this ultimate guide to Public Service Loan Forgiveness.

PSLF is a great deal for lawyers because the loan is truly forgivable. The exempt amount is not subject to tax.

Any attorney working for the Department of Justice (DOJ) can apply to join the Attorney Student Loan Repayment Program (ASLRP). Under this program, the Department of Justice will pay up to $6,000 annually in educational loans on behalf of an attorney working for the Department.

Attorneys who qualify for the program will be automatically enrolled for three years, as long as they continue to work full-time as a Department of Justice attorney.

However, this is not truly a loan forgiveness program. All DOJ payments on your loans are taxable income. However, the program is worth considering, especially if your business does not allow you to qualify for another loan forgiveness program.

Want to know more? You can Learn about the program and apply it Through the Department of Justice website (which is clearly designed for lawyers because it documents federal laws and includes a discussion of their policies).

Each year, Legal Services Corporation (a nonprofit organization that funds legal aid programs) selects 80 legal aid attorneys to help with their student loans. Under this program, an attorney receives up to $5,600 annually to help repay loans. The lawyer will receive this financial assistance for up to three years.

The 80 attorneys selected are selected by lottery from among qualified applicants.

The Loan Repayment Assistance Program is designed as a forgivable loan. As such, the participating attorney does not have to pay taxes on the payments he or she receives from the program. Of course, you may want to do your own research to make sure you are complying with the law.

To be eligible for the program, you must have at least $75,000 in student loans, have a net worth of less than $35,000 (excluding the value of your home), and earn less than $62,500 (in the lower 48 states – Alaska and Hawaii have higher limits). You can Learn more about the program and apply here.

In 2018, the John R. Justice Student Loan Repayment Program awarded $1.8 million to qualifying public defenders and prosecutors who work for the state or city. In exchange for help paying off student loans, these lawyers agree to remain in public office for three years.

Technically, you can get up to $10,000 per year in repayment assistance ($60,000 total), but this program is not heavily funded. As a result, you can expect a few hundred or a few thousand dollars in assistance.

You have to work with your own City or state to apply for the reimbursement program. Funds received under this program are generally not taxable, although the IRS declines to provide specific guidance on whether they are nontaxable in all circumstances.

If you’re a lawyer with six-figure debts, figuring out how to pay them can be difficult on any paycheck. But it can be especially difficult if you’re just starting out and don’t have a high salary yet. So what’s a lawyer to do?

Your first option should be to get an income-driven repayment plan for all of your federal student loans. Payment for all income-driven repayment plans is based on your discretionary income.

We call income-driven repayment plans the “secret” student loan forgiveness program because most people don’t realize that your loans under these programs will be forgiven after 20 or 25 years. Yes, that’s a long time. But you should know that the option exists.

Income-based repayment programs include: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Income Conditional Repayment (ICR), and starting in 2026, the Repayment Assistance Plan (RAP).

Once you’re on an income-driven repayment plan, it’s time to ask the question, “Should I pay extra on my student loans?”

Even if you don’t qualify for loan forgiveness, your federal loans will be forgiven after 30 years of repayment. hunting? The canceled amount is subject to tax. This means you will have to pay a huge tax bill in the year the loans are forgiven.

Should you work to pay off that debt with extra payments, or just start saving for your tax bill? The answer depends on the ratio of the amount you owe to the amount you earn. While the exact answer depends on a variety of factors, a good rule of thumb is that if you owe more than 1.5 times what you earn, you should consider canceling the loan rather than paying off the loan.

This means that an attorney who earns $150,000 a year, but owes more than $225,000 in student loans, probably needs to start saving for a large tax bill instead of aggressively trying to pay off the loans. On the other hand, if this lawyer earning $150,000 owes the typical debt of $125,000, aggressive repayment is likely the right decision.

If you’re on the path to paying off your debt, you may want to consider refinancing your student loans into a private student loan with a lower interest rate. This is risky, because you lose the option to cancel the loan, plus you lose the flexibility of income-based repayment. However, it can save you money while you pay off larger debts. Right now, you can get prices as low as 3.99% – 11.41% APR at places like Credible. If you have Grad PLUS loans, this could be a huge saving.

You can find the best rates for refinancing student loans through Credible. Check out our complete guide on the best places to refinance student loans here.