NEW YORK (MainStreet) — Law students come out first in the line of college graduates with the highest loan debt, yet they also have ways to save on loans that other graduates may not.
According to the nonprofit education group American Student Assistance, law school graduates face an average of about $80,000 of debt from their degrees, not including undergraduate debt. That’s more than twice the amount the average MBA grad owes ($32,000), and more than the average Ph.D. graduate as well ($45,000).
Given an economy where even law firms are cutting back, if you owe tons of cash on your law school diploma, you may need to get creative to get on top of it. Here are some tips:
Look for state aid. If you’re really strapped, check out any one of the 24 statewide law degree student aid programs from the American Bar Association. By and large, to earn any state assistance, you’ll need to be practicing law within that state.
Consider public service. For decades, law school grads had little recourse when looking for ways to reduce their student loan burden. But in 2007 the terrain shifted, with the passage of the College Cost Reduction and Access Act, or CCRAA. Through that legislation, law grads can qualify for the following two programs, including one that leverages public service:
Income-based repayment. According to the CCRAA, the IBR is a repayment plan that can substantially reduce the monthly student loan payments on federal loans by capping your payments at a percentage of your take-home pay.
Public service loan forgiveness. The PSLF provides complete forgiveness of any remaining federal direct loans after an individual has made 120 qualifying monthly loan payments while working in a qualifying public service position.
See if your law school offers an assistance program. Many law schools participate in an industry-wide program to help young law professionals ease their debt. Loan repayment assistance programs are offered at about 100 U.S. law schools.
Law school graduates can also save money on the back end of their loans by paying more than the minimum amount every month. That can save big money in interest payments.
If you’re struggling with multiple student loans, also look into consolidating them into one, more easily manageable loan with lower monthly payments. The government’s Federal Student Aid website can get you started.
Facing $80,000 or more in student loan debt isn’t an insurmountable mountain to climb, but that doesn’t mean you won’t need outside help to get on top of it.
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