In fact, recent policy changes have made it much easier to find a lawyer to help with your student loan issues.

The Historic Difficulty of Finding a Student Loan Lawyer

Until this year, finding a student loan attorney was often a massive struggle.

A primary reason for this problem is the fact that “student loan law” isn’t a discrete area of practice like criminal law or estate law.

Your student loan issue might require the services of a contract law specialist. You may need someone with expertise in consumer law. In the majority of cases, a bankruptcy attorney is needed.

Sadly, most bankruptcy attorneys refused to help with student loans. Between the way the law was written and the way the courts interpreted the law, a bankruptcy discharge was nearly impossible. Many attorneys considered pursuing this route a waste of their time and the client’s money.

Further Reading: Bankruptcy law with student loans moved slowly, but until last year, there was a cruel history that consistently made things worse for borrowers.

A Seismic Shift for Lawyers and Borrowers

In late 2023, the Department of Justice revised the internal policy for managing student loans in bankruptcy.

As a result of these significant changes, federal student loan borrowers have a much better shot of getting their student loans discharged in bankruptcy.

Bankruptcy attorneys have taken note, and now a far greater percentage are willing to take on student loan cases.

Critically, it means that if you call an attorney asking for student loan help, you are less likely to be shown the door. That attorney may take your case, or they may refer you to another attorney who can help.

Understanding Your Student Loan Issue

You don’t need a law degree to find the right lawyer. It is ok to call someone and learn that you called the wrong person.

Many lawyers are highly specialized, so it’s not unusual to call a handful before you find the right fit.

That said, a few different student loan circumstances may make one type of attorney a better starting point.

If a friend or family member isn’t holding up their end of things? Is your ex supposed to make student loan payments on a shared loan? Is your child not making payments on a loan you cosigned for?

These situations often require the help of a local attorney with a specialty in family law or contracts.

Did a bank or lender mislead you or lie? If you suspect fraud or illegal activity, an attorney specializing in consumer law is probably the best bet.

Is your loan unaffordable? If you are bombarded with collection calls or your wages are garnished, a bankruptcy attorney is probably the best bet. They can help you get your finances under control, sometimes without even filing for bankruptcy.

How to Find the Right Attorney

Some student loan issues deal with federal law. However, state laws often enter the equation.

For this reason, it is critical that you find someone local. Not only will it make communicating and meeting easier, but a local attorney should also have the state law expertise you need.

You can start by running a simple Google search for bankruptcy attorneys in your area or your state. Call or email them and explain that you need help with your student loans. If they can’t help, ask for a referral.

Sherpa Tip: If you have called local bankruptcy attorneys in the past and been rejected, don’t be afraid to call again.

The DOJ policy changes have caused a lot of bankruptcy attorneys to start helping student loan borrowers.

Getting Help with Your Search

In many states, the local or state bar association has a free attorney referral service. People who need legal representation can call the number.

The American Bar Association has a detailed directory of attorney referral services.

Because things are changing quickly with bankruptcy attorneys, it’s possible that you still might struggle to find someone able to help in your area. If that happens, feel free to send me an email. I may be able to direct you to someone in your state who handles student loans in bankruptcy.

The post How to Find a Student Loan Attorney or Bankruptcy Lawyer appeared first on The Student Loan Sherpa.

Some lawyers earn an excellent living and benefit greatly from attending law school. Others struggle.

Because there is a wide variety of potential outcomes for law school graduates, prospective students must consider many factors before making any borrowing decision.

Undergraduate Student Loans

Undergraduate debt is a significant factor in determining how much you can afford to borrow for law school.

If you have over $100,000 in undergraduate student loans, you might see law school as the only path to ever paying off your loans. This is a dangerous attitude.

Prospective law students with substantial undergraduate debt should be cautious in selecting a law school. Staying in-state or attending a school offering scholarship could be the best route.

The Law School You Want to Attend

Many law school applicants obsess about the US News Law School Rankings. Others think law school rankings are a dumb exercise and ignore them completely.

The best practice is a middle-ground approach. Very little separates the school ranked 42 compared to a school ranked 35. However, there is a vast difference between the top schools and the bottom tiers.

The issue here isn’t prestige. It is a question of statistics. What is the bar passage rate at your school? How many students have jobs at graduation? What is the average salary? What percentage of students are in jobs that require a law degree?

Not sure if your law school is worth the price of admission? Talk to some current students and recent graduates. Find out how things went for them. Ask how helpful the school was in finding a job.

Your Desire to be a Lawyer and Career Plans

Some people attend law school because they dream of being a lawyer and changing the world. Others attend law school because they are struggling to find a job, and law school seems like a reasonable next step.

Many current lawyers hate being lawyers.

Among the high-paid lawyers working at a large firm, only 44% are satisfied with their careers. In the public sector, the satisfaction numbers are a bit higher, but the salaries are usually much lower.

Breaking the bank to enter a field that you might hate is a risky venture. If you borrow so much money that a six-figure salary is a necessity just to keep up with your student loans, things could get especially ugly.

Figure out if you really want to become an attorney. The best time to figure out whether or not you want to become a lawyer is before law school. Think about the sort of legal job you want. Ask someone in that position to shadow them for a few weeks so that you can get a feel for what the work is really like.

Part of being a lawyer is networking with other attorneys. Finding someone to shadow is good practice for an essential skill.

Federal vs. Private Loans

The loans you plan on borrowing have a significant influence on how much debt is reasonable.

If you are considering private loans to pay for law school, you are choosing a risky approach. Private loans are far more restrictive than federal loans and can present enormous challenges after graduation.

Federal loans are a much better option for the vast majority of law students. Income-driven repayment plans and Public Service Loan Forgiveness help many lawyers afford their law school debt on smaller salaries.

Even with the borrower protections available, a massive amount of federal debt still presents a major risk. However, it is less risky than private loans.

Planning for Setbacks

If you are considering law school, you probably have a long history of being an academic over-achiever.

Law schools are filled with bright students, hard workers, and great test-takers. Don’t assume you will graduate at the top of your class.

In fact, given the amount of debt that might be required to pay for law school, you should consider the many ways in which it might go wrong.

• You might not graduate. Graduates rates vary widely from one school to the next, but a shocking number of law students don’t finish school.
• You might not pass the bar. At some schools only about half the students pass the bar. Each year, students from Harvard and Yale fail the bar. The bar is incredibly difficult and stressful, and anyone considering law school should also consider what they will do if they can’t pass the bar.
• You might not find a job. There are great opportunities available for lawyers. However, US law schools produce more lawyers than what the economy needs. According to the US Bureau of Labor Statistics, competition for jobs over the next 10 years is expected to be strong because more students graduate from law school each year than there are jobs available.

Is Borrowing Money to Attend Law School a Mistake?

Maybe.

(Side note for those who eventually attend law school: maybe is the answer to pretty much every exam question you will see.)

Even in the best of circumstances, law school is an investment that comes with risks. That doesn’t mean that attending law school is necessarily a bad idea. It does mean that there are no easy answers to this question.

So How Much Can I Safely Borrow for Law School?

There isn’t a magic number for law school borrowing.

If you are going to a top law school, have a great scholarship, are passionate about becoming a lawyer, and don’t have any debt from undergrad, it is probably safe to borrow some money to pay for school.

For the rest of us, it is a risk-reward question.

The most important thing for anyone considering law school is to do your homework. Learn about the law schools you are considering. Learn about your options if things go south. Learn about yourself and what you really want.

The post How Much Student Debt is Reasonable for Law School? appeared first on The Student Loan Sherpa.

Those who choose to refinance their federal student loans into a private loan may save a bundle on interest, but they sacrifice significant federal perks and valuable flexibility.

Because there is no way to “undo” a student loan refinance, attorneys carefully consider the following red flags.

BigLaw Salaries Are Not Guaranteed

If you are working for a large law firm right out of law school earning a market salary, you already have a track record of defying the odds and exceeding expectations.

However, it is no secret that the vast majority of first-year associates don’t make it to partner. BigLaw burnout is real, and the attrition rate is high.

Don’t assume you will be at the same firm several years from now. Don’t assume that you will always pull in a large salary.

If you refinance your student loans, make sure you can handle monthly payments if your income takes a big dip.

The Appeal of Government Work Makes Refinance a Risk

Working for the government has significant advantages for many lawyers. The hours can be better, and the work may be more fulfilling.

The added job satisfaction often means reduced salary.

However, there is a substantial financial advantage to government work: Public Service Loan Forgiveness (PLSF). Those who qualify for PSLF can have their entire federal student loan balance forgiven after ten years. PLSF can make taking a government job more feasible.

If there is a chance that you may become a government lawyer, you should not refinance your federal loans unless you have a small federal balance.

Massive Debts and Forgiveness

The stakes of the refinance decision are incredibly high for many law school graduates. Federal debts of 200k or more are common.

Lowering the interest rate on such a large amount of debt can save a fortune. Dropping from Graduate PLUS interest rates to the low rates offered by some refi lenders may be worth more than $10,000 in interest savings per year.

However, this means passing up many forgiveness options. In addition to the previously discussed PSLF program, there are many other forms of federal student loan forgiveness.

I know many lawyers hate math, but a quick calculation can be really insightful. Think of the forgiveness programs as an insurance policy. Now calculate how much you would save on interest each year if you refinance with a private lender. The higher yearly interest cost on federal loans is the cost of the insurance policy. If the interest policy is cheap, or you might need the coverage, don’t refinance.

Lawyer Fatigue and Less Lucrative Work

This article is written by a former homicide prosecutor who now blogs about student loans for a living.

Being a badass trial lawyer was a dream of mine. I loved my job. Early in my career, I thought for sure that I would be a practicing attorney for life.

I’ll skip over the personal story and jump to the bottom line: many lawyers do not stay in the profession long-term. The work is stressful. The hours are long. Life happens, and priorities change.

When planning your finances, don’t assume that what is working now will continue to work indefinitely. Have a backup plan or three. Know that new and exciting opportunities may come along. Sometimes these jobs don’t pay as well.

If refinancing only makes sense at your current high salary, it could be a huge mistake.

The Need for Income-Driven Repayment

One of the biggest advantages of federal student loans is Income-Driven Repayment (IDR). Put simply, lawyers should not refinance their student loans if they need access to IDR plans.

In addition to qualifying for forgiveness programs, IDR also ensures that monthly payments are manageable. Rather than making payments based upon what you owe, IDR payments are based upon what you can afford.

The value of IDR may appeal to attorneys in several different ways:

• An extended job hunt – If you are out of work, IDR payments can be lowered to $0 per month. This protection is especially valuable if the job market gets ugly.
• Starting a new firm – If you decide to go out on your own, the first few years may be lean. If you are investing most of your revenue back into your firm, money will be tight. Having IDR payments ensures student loans won’t get in the way of starting your own practice.
• Inconsistent income – If you work on contingency or have considerable fluctuations in income, IDR is excellent. IDR payments are usually calculated based upon your most recent tax return. If you are in a down period, you can have your payments immediately recalculated.

Private Student Loan Refinance Risks

The danger is refinancing private student loans is significantly reduced. Many lawyers who should not refinance their federal student loans may still benefit from refinancing their private loans.

The biggest concern with private refinance may be the possibility of higher monthly payments. For example, the lowest refinance rates currently available are in the 5-year variable-rate category. If you have a loan that is currently on a longer repayment plan, lowering repayment length to five years will result in higher monthly payments, even if you lower the interest rate considerably.

However, this issue can be mitigated by refinancing on a longer loan at a slightly higher interest rate. At present, the spread between short-term loans and long-term loans is minimal.

These lenders currently offer the lowest 5-year loans:

Rank	Lender	Lowest Rate	Sherpa Review
T-1		4.86%	ELFI Review
T-1		4.86%*	Splash Financial Review
3		5.29%	Laurel Road Review

By stretching repayment out over 20 years, borrowers can secure a fixed-rate loan at these rates.

Rank	Lender	Lowest Rate	Sherpa Review
1		6.08%*	Splash Financial Review
2		6.53%	ELFI Review
3		6.55%	Laurel Road Review

Finally, it is worth noting that borrowers can always pay extra to eliminate their loans faster. A borrower may choose to refinance on a 20-year loan but pay extra to eliminate the debt in 10 years. This borrower would have a slightly higher interest rate, but they would also have much more flexibility if their finances worsen.

The post Six Reasons Lawyers Should Not Refinance Their Student Loans appeared first on The Student Loan Sherpa.

Most attorneys will find that federal direct consolidation is the preferred route for government loans while refinancing with a private lender is the ideal path for private student loans. However, expected salary, total borrowing, and loan terms can impact the best option determination.

One of the biggest factors in determining the strategy for loan management is the nature of employment. The options and resources available to a big law attorney with a larger salary are significantly different than what it is for a government employee.

Large Firms Employees

If you are enjoying the golden handcuffs of the large firm lifestyle, there are several excellent student loan refinance options to consider. Many of the private companies use the terms refinance and consolidation interchangeably. While both refinance and consolidation involve older loans being paid back in full and replaced with a new loan, there are some significant differences.

When the government consolidates loans, it is usually done to help borrowers qualify for desired repayment plans or forgiveness programs. When a private lender refinances loans, it is to help borrowers get a lower interest rate or monthly payment on their debt. Private lenders and private loan refinancing is the more typical path for large firm employees.

Many of the top private lenders cater to young professionals with six-figure incomes and high credit scores. Even if you are on track to pay off your debt relatively quickly, locking in a lower interest rate can make a huge difference on any budget. If you have 200k in law school debt and reduce your 8% rate loans to a 4% rate loan, it means you will be saving nearly $700 per month.

Partnership track and other high earners looking to eliminate debt quickly will want to focus on getting the lowest possible interest rate. At present, the following lenders offer the lowest refinance rates:

Rank	Lender	Lowest Rate	Sherpa Review
T-1		4.86%	ELFI Review
T-1		4.86%*	Splash Financial Review
3		5.29%	Laurel Road Review

However, before any refinancing takes place, all private-sector attorneys should first map out a comprehensive plan to eliminate their student debt.

Government and Non-Profit Employees

If you are working as a government attorney or for a non-profit, your student loan repayment route will likely be different. Private refinance of federal loans is almost certainly a mistake.

One of the best options for repayment is to seek out employers eligible for Public Service Student Loan Forgiveness (PSLF). After ten years of payments based upon your income, the remainder of your debt can be forgiven tax-free.

The issue with PSLF is that only certain federal student loans are eligible. Lawyers who attended law school in 2010 or earlier may have FFEL loans. The FFEL loans do not qualify for PSLF, but they can become eligible through federal direction consolidation. One of the dangers to federal direct consolidation is that the forgiveness clock is potentially restarted.

Tips for borrowers considering federal consolidation

• There is only one place to consolidate your federal loans. Outside services charging money for federal consolidation or student loan forgiveness services are likely a scam.
• Federal consolidation can be a bit tricky, and there is no way to undo a consolidation, so be sure to do lots of research before jumping into this route.
• A good starting point in consolidation research is the Department of Education page on Federal Student Loan Consolidation.
• This site has also created a comprehensive guide to Federal Student Loan Consolidation.

When Private Refinance Enters the Equation

Unfortunately, not all loans are federal, meaning forgiveness isn’t ever going to happen for some law school debts. For these loans, refinancing with a private company is a great way to lower your rates. Even on a more modest government or 501(c)(3) salary, there are options. One of the best choices may be LendKey.  This company will match you with a not-for-profit local credit union. The rates they offer aren’t quite as low as some other companies mentioned, but loans starting at less than 3% are worth investigating.

Selecting a 20-year repayment plan is often the optimal route. Borrowers can always pay extra to eliminate their loans quicker, but the lower monthly payments provide flexibility if the budget gets tight.

At present, the lenders offering the best 20-year, fixed-rate loans are the following:

Rank	Lender	Lowest Rate	Sherpa Review
1		6.08%*	Splash Financial Review
2		6.53%	ELFI Review
3		6.55%	Laurel Road Review

Government and non-profit employees should carefully consider their future employment plans and create a strategy to eliminate all of their student loans as quickly and efficiently as possible.

Student Loan Refinance and Consolidation Options for Young Attorneys

Regardless of where you find yourself on the lawyer income spectrum, there are options for putting a huge dent in your monthly student loan interest. Student loan consolidation and refinancing are no magic fixes, but they can make your massive student loan headache into a slightly less massive student loan headache.

The post Best Student Loan Consolidation and Refinancing Options for Lawyers appeared first on The Student Loan Sherpa.

Bar study loans are not student loans. They are private loans.

As a result, borrowers need to apply a different strategy for bar study loan elimination. Even though traditional tactics may not work, there are options unique to bar study loans.

Why are bar study loans different than other student loans?

It seems silly that someone borrowing money to study for the bar exam gets interest rates well above 10%, while an average first-year college student can easily find a student loan with an interest rate of under 5%.

The difference goes back to bankruptcy law. Congress passed special provisions that make student loans nearly impossible to discharge in bankruptcy. This is the reason that so many lenders are eager to offer student loans at low interest rates. There is less risk to the lender.

A bar study loan is different. Even though it was used to study, the lenders have much less protection. Because there is more risk associated with the loan, the interest rate is higher. Loaning money to jobless, unlicensed attorneys is risky, so lenders increase the rates to ensure profits.

Rather than treating your bar study loan as a student loan, view it as a personal loan. Even though it cannot be consolidated or refinanced like other student loans, there are other ways to lower the interest rate.

Find a better personal loan

Perhaps the best method of refinancing a bar study loan is to get another loan and use the funds to pay off the old loan.

Peer-to-peer lenders such as Lending Club and Prosper are common choices. The downside with these options is that the interest rates can vary greatly. At the low end of the spectrum, some of the rates are reasonable. However, the rates on these loans can often exceed those offered by some credit card lenders. The other downside is that there is an origination fee.

For most, working with a local bank and inquiring about a personal loan might be the best option.

Occasionally, student loan consolidation companies like SoFi also offer personal loans. These loans typically have shorter repayment terms than most student loan refinancing. With interest rates starting in the 5 to 7% range, they can considerably improve the bar study loan interest rate. They also are free of origination fees, which should always be avoided.

Lender	Interest Rates	Loan Amounts
	7.99% – 22.73%	$5,000 – $100,000
	Sherpa Thoughts: The SoFi Personal Loan has interest rates very competitive with the bar study loan lenders. SoFi is one of many lenders offering personal loans, but the SoFi interest rates are among the very best, which is why they were included here.
	5.99% – 24.99%	$2,500 – $35,000
	Sherpa Thoughts: Looking at the Discover personal loan compared to their bar study loan a couple things stick out. First, the interest rates are pretty close on the low end, but can get much higher for the bar study loan. Second, bar study borrowers have a longer period of time to repay their loans.

Borrowers with a good job may even wish to consider a credit card with a 0% interest introductory rate. The savings may be substantial if you will be able to pay off all of the debt before the credit card rate kicks in. However, this is a risky option as the full credit card interest rate may exceed the bar study loan rate.

Playing hardball with your lender

Some attorneys don’t pass the bar on the first try. Others struggle to find a job.

While federal loans have great protections like income-driven repayment and student loan forgiveness, bar study loans are less generous.

Bar study borrowers can use the viability of bankruptcy to their advantage. Some lenders have temporary rate reduction programs to help struggling borrowers. Though bar study loans are not student loans, they are excellent candidates for temporary relief.

Most lenders are large bureaucracies, and customer service representatives rarely have authority to make interest rate changes. However, a savvy law school grad may be able to track down a person who can help and persuade them that rate assistance is better than bankruptcy.

Refinance and Consolidation Options for Bar Study Loans

The key here is to understand what you are shopping for.

Student loan consolidation and refinancing is not an option for debt that isn’t actually a student loan. Once you target personal loans instead of student loans, you might find better options.

Even in the best of circumstances, the interest rates on these loans will still be higher than what you can find for student loans. For this reason, even if you can lower the interest rate slightly, this will still probably be the loan you want to pay off first.

Due to the high interest rates of personal loans and bar study loans, borrowers should prioritize eliminating this debt first.

Next Steps

• Find the lowest possible monthly payments and interest rates on your student loans.
• Attempt refinancing or consolidation or negotiating rates as described above.
• Repay the bar study loan as fast as possible.

The post Bar Study Loan Consolidation and Refinancing Options appeared first on The Student Loan Sherpa.

Many face six-figure mountains of debt. Some may find high-paying jobs, while others struggle. As time passes, the attorneys who experienced early success may find hardships and the ones who faced initial difficulties may find lucrative work.

Unlike the medical field, where many doctors see steady income growth, young lawyer salaries can vary significantly from one year to the next. In the face of this uncertainty, formulating a student loan plan that is flexible is critical to adapt to the changes of the future.

Big Law and Corporate Attorneys

The lawyers who find high-paying jobs right out of law school face some serious financial temptation.

Unfortunately, not all first-year associates work their way to becoming partners. Some find the work unbearable and take less lucrative but more personally satisfying work.

There are three paths that well paid young attorneys typically follow:

#1: Take no special action – Where others might struggle to handle the large bills of the standard repayment plan, large firm attorneys can keep pace with the high bills. This approach might work for some, but it lacks the efficiency of option number two and the flexibility of option number three.

#2: The aggressive plan – Borrowers going this route put the nice apartment and fancy car on hold. Instead, the big paychecks are used to eliminate as much student debt as quickly as possible. Going with the aggressive repayment route will save a fortune in interest. The lawyers that end up making less money at their next job will be glad they paid off their student loans as quickly as possible. The risk with this approach is that the lower salary might come sooner than expected. If that happens, borrowers might have less debt but regret not saving that money for future basic needs.

#3: The saver plan – The idea behind this approach is that you don’t know what your future needs and expenses will be, so the best thing to do is to put the money in savings. Lawyers who see their $190,000 salary become a $65,000 will be glad they saved what they could. The big risk with this approach is the spending on interest. Money in a savings account is lucky to earn 2%, while student loan interest usually charges between 6-8%. The extra spending on interest is the cost of flexibility.

The ideal path could be a mix of strategies. A young attorney might be conservative with their planning and start with the saver plan. Once it becomes apparent that the aggressive plan can be used to eliminate all the debt, the borrower switches strategies.

Tips for the Well Paid Attorneys

Spending some time putting together a comprehensive student loan plan is essential. An attorney with $200,000 in law school debt at an interest rate of 6% is being charged $1,000 per month on interest alone. The numbers are large enough that a minor tweak in strategy can save thousands of dollars.

Refinance carefully – Lenders like SoFi and CollegeAve love young attorneys. Your high salary and large debt mean you are a very lucrative customer. Unfortunately, refinancing isn’t the best move for everyone. Generally speaking, refinancing private loans to a lower interest rate is a smart move. Making the same move with federal loans is riskier. The benefit is lower interest rates, but the downside is that the refinanced loan is no longer eligible for income-driven repayment plans and student loan forgiveness. I usually advise people to avoid refinancing federal loans until they are confident they won’t need federal protections.

Consider the Graduated and Extended Repayment Plans – These older repayment plans are a lousy option for most borrowers. They are not eligible for any of the loan forgiveness programs, and most borrowers find the income-driven repayment plans result in the lowest monthly payments. Well paid attorneys can be the exception and may find that the graduated extended repayment plan offers the lowest possible monthly payment. By getting a lower monthly payment on federal student loans, a borrower can focus on eliminating higher-interest private loans or save the money towards other financial goals. The federal government has a calculator that can help borrowers compare monthly payments on various plans.

Don’t forget other goals – Student loans are not the only financial priority. Because a pension plan is pretty much extinct in the private sector, it is essential to start saving for retirement early. Retirement planning should be done side-by-side with student loan repayment planning. Most borrowers will find that there are ways to save for retirement and pay down student loans at the same time.

Small Practice and Solo Practitioners

Student loan repayment for most attorneys in the private sector can be a tricky endeavor. The big challenge for private sector attorneys is that there can be really good years and really bad years. Coming up with a plan that works during the up years and the down years is tricky.

Student loan refinancing should be utilized for private student loans. Eliminating private student loans is almost always goal number one. Quickly paying off private loans is important because these loans have very few options for borrowers who are struggling. One possible exception to the rule on private student loans would be for borrowers who have very low interest rates on their loans. It could make sense to pay the minimum on a loan at 2-4% interest and put additional funds towards retirement. If your investments are generating interest faster than your debt, you come out ahead by investing.

For the lawyer in private practice, the big perk to federal student loans is the Income-Driven Repayment (IDR) plans. If business slows down, borrowers can have their monthly payments immediately recalculated to reflect the change in income. This protection can be incredibly valuable in lean years. For this reason, borrowers should avoid the temptation of a private refinance for their federal loans unless they are sure that they no longer need IDR flexibility.

Borrowers on Income-Driven Repayment plans may also want to consider upping their pre-tax retirement contributions. This move can lower monthly IDR payments and increase retirement savings.

Ultimately, borrowers will need to find a balance between saving for the future and eliminating student loan debt. The more financial security you have, the more aggressive you can be paying down the debt. Those with more murky outlooks will want to make sure they have built up a significant emergency fund in preparation for what might come.

Is a shift to government work possible?

It is somewhat common for attorneys to bounce back and forth between the private sector and government work. For this reason, it is a good idea for all attorneys to understand the terms and conditions of the Public Service Loan Forgiveness (PSLF) program.

One key detail of the program is that the 120 required months towards PSLF do not have to be consecutive. Lawyers who start their careers in a clerkship should sign up for an IDR plan and certify their employment, even if the next position is with a firm. If they end up working for the government again, it could mean student loan forgiveness a year or two sooner.

The massive amount of debt that can be forgiven under PSLF can also shift the math on a decision between a government position and a private practice job. PSLF was created so that student debt doesn’t prevent people from pursuing public interest work. For many attorneys, it can be a difference-maker.

Final Thoughts

Being a lawyer can be financially rewarding, but many will struggle.

All attorneys paying down their student debt should consider ways to take advantage of the financially rewarding times. They should also have a plan in place to deal with any struggles.

There isn’t a one size fits all approach for lawyers in repayment. The key is to ask many “what ifs?” and to be ready for as many as possible.

The post Student Loan Repayment Strategy for Private Practice Attorneys appeared first on The Student Loan Sherpa.

The law school graduates who find a job that is mentally and financially satisfying will say law school was worth it. Those that struggle to find work or dislike their jobs will say law school was a bad idea. The trick is figuring out what category you will fall in before you go to law school.

Evaluating the decision to attend law school requires an objective analysis of any potential schools as well as the methods to pay for school. It also requires an honest self-assessment. The key to preventing law school regrets is to ask the important questions before heading off to school.

How do I know if law school is worth it?

I am a lawyer. There are many lawyers in my family. And yes, many of my friends are also lawyers.

I’ve also worked with many lawyers struggling with their student debt.

Over the years, I’ve seen some very happy lawyers and some miserable lawyers. Most fall somewhere in the middle.

Based upon my personal and professional experience with attorneys, two major factors separate the happy lawyers from the unhappy lawyers:

Capability – This might sound harsh, but not everyone has what it takes to become an attorney. Strong verbal and written communication skills are essential. High-level critical thinking is a necessity. Though flawed, the LSAT is designed to test the skills that are necessary to do well in law school. Passion can undoubtedly help overcome some challenges, but in a crowded job market, not everyone will succeed.

Desire – Very few lawyers work a traditional 40 hour week. Many put in late nights and weekends. Sustaining a schedule of this nature for years at a time requires someone with a passion for the work they do. The long hours combined with the inherent stress of the job create a miserable environment for those that don’t want to be there.

The good news for prospective law students is that it is possible to investigate your desire and capability before ever stepping foot in a classroom. Many attorneys and firms routinely hire recent college graduates. Those considering law school can learn a lot about themselves working as a law clerk, paralegal, or legal secretary. If you can find job satisfaction in these positions, becoming a lawyer might be a good fit.

Bad Reasons to go to Law School

Anyone considering law school should think about the reasons they want to go. Attending law school for the wrong reasons can lead to unsatisfying employment and lots of student debt.

Do any of these motivations sound familiar?

Large Income – Some lawyers make massive amounts of money. It is no secret that a highly successful lawyer can become very wealthy. Many people go to law school less motivated to join the practice of law and more motivated to get rich. The problem with this motivation is that many lawyers don’t find financial success, and doing the work just for the money can be soul-crushing.

Prestige – Lawyers wear fancy suits, do important work, and have respect in the community. Lawyers may be the but of many jokes, but to most, becoming an attorney is a respectable profession. The problem with this motivation lies in the inherent danger of making important career decisions based upon how you want others to perceive you. Entering the profession to please others is a recipe for self-disappointment.

The Next Step – Some people find that they are excellent students. After high school, they go to college. After undergrad, they go off to grad school. Many students may feel that graduate school, specifically law school, is the next logical step in their journey. Don’t go to law school because it seems like a logical choice. The only time law school works is if it is precisely where you want to be.

Good Reasons to go to Law School

Attending law school for the right reasons is an excellent way to help ensure success as a student and increase the likelihood of a fulfilling career.

If any of the following are driving factors, it might be a sign that law school is a good idea:

The Desire to Help Others – At its best, the legal profession is a community of individuals dedicated to helping people navigate serious and complicated situations. Lawyers have the opportunity to make significant contributions to the lives of others through their work. Being driven by a genuine drive to help others can make legal work far more fulfilling.

Seeking Out Challenging Work – The practice of law requires a diverse set of skills and can be challenging in many different ways. The people who thrive under pressure and even enjoy the stress may find that being a lawyer is an ideal job.

No Other Choice – A strong reason to attend law school is that you cannot see yourself doing anything else. If you have spent some time in a law office and decide that there is no other profession for you, it is a more informed decision. Watching an episode of Law and Order and thinking that you must become a lawyer doesn’t count.

Unfortunately, those who attend law school with the best of intentions sometimes live to regret their decision. Often this regret can be traced back to unwise financial choices.

Paying for Law School

Law school is pricey, and many current attorneys find themselves frustrated by the debt they racked up as law students.

Scholarships and grants are the best way to pay for school, but most students will require additional funding.

Working and saving some money before attending law school can be a wise decision for multiple reasons. The ideal route is to work as a law clerk or paralegal for a couple of years.

Opting to get some legal experience before law school can provide numerous advantages:

1. Help with law school admissions,
2. A head start networking,
3. Time to evaluate the decision to become a lawyer, and
4. Money to help pay tuition.

Similarly, some law schools allow students to attend school part-time while keeping a full-time job. In theory, part-time students can get a legal education without losing out on valuable working years. As a part-time student, I found this route wasn’t the financial boon that I had hoped for, but it was still worthwhile.

Finally, many law students will turn to student loans to help cover the cost of school. Finding the right student loan is relatively easy because the best option is to borrow federal loans exclusively. As graduate students, there is no yearly borrowing limit.

Many private student loan companies offer loans designed specifically for law students. While the private interest rates may be better than the Graduate PLUS loans, the federal perks make the Graduate PLUS loans the better choice. Like all other federal loans, Grad PLUS borrowers can opt for income-driven repayment plans and qualify for forgiveness programs such as Public Service Loan Forgiveness. These protections make choosing federal loans an easy decision.

Why is law school so expensive?

The cost of college has skyrocketed, and law schools are no exception. Many top law schools now charge over $60,000 per year for tuition alone.

In 1985 the average private law school tuition was just $7,526 per year. According to statistics from the American Bar Association, after adjusting for inflation, law school in 2018 cost 2.73 times more than it did in 1985.

Public colleges, once an excellent source for a reasonably priced education, have seen prices grow even faster. The same ABA statistics show that public law school is now 5.82 times more expensive than it was in 1985.

A 2013 study from the ABA identified three key reasons that law school has become so expensive:

1.) Discriminatory Pricing – Many law schools offer considerable scholarships to attract top students. The rest of the class has to pay more so that the superstars can attend on a scholarship.

2.) Other Expensive Services – Some law schools spend a lot of money on career development offices to help students find jobs. Additionally, many students want real-world legal experience, and providing these opportunities can be expensive.

3.) Cost doesn’t reflect value – Schools now set the price of education based upon the cost of delivery minus any available state subsidies. The ABA argues that cost should be based upon what students can afford and the actual value of the degree.

The easy access to student loans has made the third issue particularly severe. There is no limit on graduate school borrowing from the federal government so that students can pay increasingly absurd tuition prices. The ability and willingness of students to pay any price for law school has allowed the cost of a legal education to spiral out of control.

Scholarships for Law School

Many schools now offer full-scholarships to attract top students.

These scholarships can make law school much more affordable, but they may also put students in a difficult position.

Attending a more highly regarded law school could be far more expensive, but it can also lead to better career prospects. The school offering a scholarship is less risky from a financial standpoint, but the job outlook could be limited.

Students with scholarships should also pay close attention to the requirements to maintain the award. Some schools impose high GPA requirements that may cause many to lose their funding.

Ultimately, qualifying for a scholarship introduces another variable to consider when selecting a law school…

Picking the Right Law School

The law school attended can make a big difference for many lawyers. It might also be insignificant in the long run.

Law school rankings are the source of much debate within the legal community. While no list can definitively compare two schools, it is worthwhile to understand why some schools are more highly regarded than others.

When researching law schools, it is important to consider many different factors:

Bar Passage Rates – If the students who attend a school are not passing the bar at a high rate, it should be a major red flag. The students who graduate and cannot pass the bar will have to pay back their law school debt without a license to practice law. Avoid schools where this is a major risk.

Employment Statistics – What percentage of students have jobs that require a law degree at graduation? How many find jobs within a year? What percentage of students find jobs with the help of the school’s career development office? Career resources and placement can be a difference-maker when it comes to deciding whether or not law school is worth it.

Career Goals – If you want to clerk for the Supreme Court, attending Harvard or Yale becomes important. Some schools are known for preparing graduates for specific practice areas. Think about the job or jobs that you want. Talk to people in those positions. What schools do they recommend?

Location – Some schools may not have a national reputation, but they may be highly regarded in specific cities. If you know where you want to live, find out what schools do best in that particular job market.

Making a Smart Law School Decision

Don’t be afraid to reach out to lawyers to ask for advice on picking a school. Many attorneys have very strong opinions on attending law school.

If there is a job you want, talk to the people who have walked the path you are considering. It is hard to overstate the value of personal advice and first-hand experience.

Law school is a massive investment of time and money. Before making any decision, make sure to do your due diligence. Law school choices are too important to cut corners.

The post Should I go to Law School? appeared first on The Student Loan Sherpa.

I say this both as a former bar study loan borrower and as someone who closely watches the student lending marketplace.

The big problem with bar study loans is that interest rates normally range from average at best to terrible. Many students end up with interest rates of over 10%.

Despite the shortcomings, many borrowers choose to get a bar study loan each year. Today we will cover the lenders offering bar study loans and look at some alternatives to a bar study loan.

Bar Study Loan Lenders

At present, four national lenders are offering bar study loans.

Lender	Interest Rates	Loan Amounts
	2.39% – 11.29%	Max $15,000
	Sherpa Review: Of the major bar study loan lenders, PNC is probably the best bet. PNC offers fixed-rate and variable-rate loans, has a variety of repayment lengths, and has the lowest advertised interest rate. However, the lender that actually offers the best rate may not be PNC. This is why all borrowers should shop around. Read the full review on PNC.
	4.39% – 14.03%	$1,000 – $15,000
	Sherpa Review: Sallie Mae is still a huge name in the bar study loan business. The interest rates offered by Sallie Mae on the low end are competitive with other lenders, but many borrowers end up with double-digit interest rates... even those with co-signers. Read the full review on Sallie Mae.
	4.99% – 13.99%	$1,000 – $16,000
	Sherpa Review: Discover has a reputation for excellent customer service, and that service definitely applies to their bar study loans. The zero fee offer, which includes zero late fees, is very customer friendly. Though Discover doesn't advertise the lowest possible interest rates, checking rates with Discover may still be time well spent. Read the full review on Discover.

The Bar Study Loan Issues

Despite being a rather sophisticated demographic, law students who are about to sit for the bar are not the best consumers.

After borrowing massive sums of debt to pay for law school, one last student loan — even with a lousy interest rate — doesn’t seem like a big deal.

Enter the bar study loan companies. Not many lenders offer bar study loans (four by my count), so there isn’t much competition. The bar study loan is presented as one final student loan and a useful tool to help ensure bar passage. Law students apply for one loan, get approved, and move on to more pressing concerns.

Many law students don’t realize that a bar study loan is not a student loan at all. In reality, it is just a fancy-dressed personal loan.

Because a bar study loan is just a personal loan, prospective borrowers shouldn’t limit themselves to loans labeled as bar study loans. A personal loan can be a credit card payoff tool, a home construction loan, or a loan for paying for bar expenses.

A quick look at a couple of personal loans shows that they may be a reasonable alternative:

Lender	Interest Rates	Loan Amounts
	7.99% – 22.73%	$5,000 – $100,000
	Sherpa Thoughts: The SoFi Personal Loan has interest rates very competitive with the bar study loan lenders. SoFi is one of many lenders offering personal loans, but the SoFi interest rates are among the very best, which is why they were included here.
	5.99% – 24.99%	$2,500 – $35,000
	Sherpa Thoughts: Looking at the Discover personal loan compared to their bar study loan a couple things stick out. First, the interest rates are pretty close on the low end, but can get much higher for the bar study loan. Second, bar study borrowers have a longer period of time to repay their loans.

Bar Study Loans vs. Personal Loans

The biggest difference between a bar study loan and a traditional personal loan seems to be the repayment length. Personal loan lenders are often able to offer interest rates as low or lower than a bar study loan, but these loans have to be paid off in a much shorter period. The downside is larger monthly payments; the upside is significantly less spending on interest over the life of the loan.

When comparing the four bar study loan lenders against a couple of personal loans, it becomes apparent that bar study loans are not the only reasonable option to get through the bar exam.

Law students looking for funds to get through the bar examination process would be wise to consider both bar study loans and personal loans.

Looking Outside the Box

Those looking for a very short-term loan to cover bar exam and class costs may also want to consider a credit card with a 0% introductory interest rate. A quick google search will show up to date promotions and offers.

This strategy is dangerous because the interest rates jump to high levels after the introductory period.

This route comes with high risk, but the reward is 0% interest, which is significantly better than bar study loans and traditional personal loans.

Final Thought: Consider All Options

No lender or loan type sticks out as an ideal option for bar study.

This means that potential borrowers need to consider all of their options and way the pros and cons carefully.

Borrowing during bar study is expensive, but with some planning and research, money can be saved.

The post Bar Study Loan Options and Alternatives appeared first on The Student Loan Sherpa.

The Big Perk: Public Service Loan Forgiveness

Under Public Service Loan forgiveness, a borrower can get all of their federal student loan debt forgiven after ten years of public service. The technical requirement is that borrowers have 120 certified payments.

To reach the 120 certified payments, there are three main requirements:

1. Eligible student loans – Many federal student loans are not eligible, such as FFEL, Stafford, and Perkins. However, federal direct student loan consolidation cures this eligibility issue.
2. Eligible repayment plan – The main repayment plans that qualify for PSLF are the income-driven repayment plans (ICR, IBR, PAYE, and REPAYE). Notable plans that are not eligible include the graduated and extended repayment plans.
3. Eligible employer – If you are not working full-time or your employer isn’t technically eligible for the program, none of your time will count.

The best way to verify that you are on your way to PSLF is to submit an employer certification form. Sending in this form is the best way to make sure you have met the requirements and are on the right track. For more about the Public Service Loan Forgiveness Program, be sure to check out our article on the Basics and the Fine Print of PSLF.

Borrowers who fall short of qualifying for PSLF may be eligible for other forms of student loan forgiveness. In fact, some of the forgiveness programs are designed for attorneys.

Should I worry about the elimination of Public Service Loan Forgiveness?

Many government attorneys have more than six figures of student loan debt. The elimination of PSLF would be devastating.

The good news is that there are several hurdles in place that prevent the government from eliminating the program:

• Political – Eliminating this program would likely be an extremely unpopular move.
• Legislative – PSLF is currently the law.  It will take an act of Congress to change it.
• Contractual – Many Master Promissory Notes (federal student loan contracts) include the PSLF language.

Due to these limitations, proposed changes to the PSLF program almost always apply only to new student loan borrowers.

However, if you are still concerned about the possibility of PSLF elimination, you can always start setting aside extra money in a Plan B account. If PSLF ends up not working out, you have a chunk of money ready to attack your debt. If PSLF comes through, you have a nest egg for retirement or the next phase of your life.

Picking the Best Repayment Plan

With four different income-driven plans available, selecting the best plan may not always be an obvious choice. Several considerations might make one plan better than another.

These considerations include:

• Marital Status
• Whether or not your spouse has student loans
• When you took out your first student loan
• The types of student loans that you have
• Your loan balance relative to your current income

Ideally, you can pick the federal repayment plan that results in minimal spending each month. The less you spend on your student loans during repayment, the more forgiven at the end.

To find the best repayment plan for your particular situation, we recommend checking out the Federal Student Loan Repayment Estimator. This tool will help you compare your expected monthly payment based upon your income, marital status, family size, and state of residence. The repayment estimator also will tell you how much debt will be forgiven at the time PSLF kicks in. However, please note that the repayment estimator assumes 5% raises each year. This assumption may not be valid for many government positions.

Another tool that may be useful for picking out a repayment plan is our article on deciding between IBR, PAYE, and SAVE.

Private Student Loan Repayment Strategy for Government Attorneys

The perks for private student loans are far more limited. Private student loans do not offer loan forgiveness or repayment plans based upon your income. There is also little reason for hope coming in the form of government assistance.

The reality is that borrowers must pay these loans in full. The most efficient way to eliminate this debt is to pay the minimum on all student loans except the loan with the highest interest. This high loan gets paid off with every extra penny you can spare. Once the highest interest loan is paid, you can move on to the next highest interest loan for aggressive repayment. As loans disappear, you will free up more money each month to attack the remaining debt.

Another tool to attack private student loans is to refinance with a private lender. A refinance takes place when a private lender pays off the student loans you specify, and you repay the lender, at hopefully a much lower interest rate. This has become a very quickly growing and competitive industry over the past 5 to 10 years, with well over a dozen lenders offering private consolidation. The idea behind the process is that the graduated and employed version of you is much less of a credit risk than the unemployed student version who first applied for your student loans. The lender gets a safe investment, and you get a lower interest rate. Just be careful not to include your federal student loans in this process, as it would mean they were no longer eligible for PSLF or income-driven repayment plans.

Managing Bar Study Loans

If you have a bar study loan, you will likely want to get rid of it as soon as possible. We have found the interest rates on these loans to typically be outrageous, in some cases higher than credit card interest rates.

Unfortunately, these loans are not technically student loans, so most student loan refinancing options are not available. The best option from a lower interest rate perspective is usually to refinance using a personal loan. If you shop around for personal loans, you are likely to find a lower interest rate than most bar study loans.

Other tools to aid in repayment

LRAP from your law school – Many law schools offer loan repayment assistance programs (LRAPs) for their graduates who work in public service. The quality of these programs varies greatly from school to school, but it is worth investigating. The ABA has a comprehensive list of school-based loan assistance programs.

LRAP from your state – In addition to school-based loan repayment assistance programs, 26 states offer some sort of LRAP. The quality of the programs varies greatly from state to state. The American Bar Association has a comprehensive list of all these state-based programs.

Student Loan Assistance Programs from your employer – Many employers offer a student loan perk as a tool to recruit and retain employees. Some employers do better jobs than others when it comes to getting their people enrolled. Here again, the quality varies from one place to the next, but it is worth investigating.

Federal Student Loan Database – The Department of Education keeps a detailed database of all federal loans. The National Student Loan Database is a great way to learn exactly how much you owe on your federal loans, the loan types you have, and who services your loans.

Retirement Programs – Contributions to retirement plans such as 457s and 401(k)s reduce your AGI on your taxes. This also will reduce your monthly payment on your student loans. These programs are a great way to start building your retirement and keep your monthly student loan payments low.

Things to keep in mind

Taxes on Forgiveness – One key benefit of PSLF is that the forgiven debt is not taxed. This is an exception to the typical IRS rule. If you end up leaving public service and plan on getting your loan balance forgiven after the standard forgiveness that comes after 20 to 25 years on an income-driven repayment plan, know that the forgiven debt is taxed. That means if you have $50,000 forgiven, the IRS will treat it as though you had an additional $50,000 of income the year your lender forgave your debt.

Be sure to submit your Employer Certification Form – Even though this form is not technically required, borrowers shouldn’t skip it. If you get in the habit of doing this each year, you can save yourself further headaches, especially if you change employers.

Watch out for Capitalized Interest – If your monthly payment is smaller than the monthly interest that your debt generates, that interest is not immediately added to your principal balance. This is good because it means your servicer won’t charge interest on that interest. However, certain events cause that interest to be added to your principal balance. This process is called interest capitalization. Some are unavoidable, such as consolidating your federal student loans or changing repayment plans. Other times, the interest capitalization is avoidable, such as missing your yearly income certification.

Be careful consolidating your loans – For many, consolidation is an essential step because it is necessary to get certain federal loans eligible for PSLF. Be sure that you are consolidating your loans with the federal government and not a private lender. Additionally, federal consolidation is a free service offered directly by the Department of Education. There is no credit check or income requirement. Private consolidation (also called refinancing) is an entirely different process. It may get you a lower rate, but you lose out on PSLF and income-driven repayment plans. Be sure to talk with your loan servicer about all the implications of consolidating your federal student loans.

Bottom Line

There isn’t a one size fits all strategy for government attorneys to repay their student loans. The good news is that many programs can make government work a viable option for attorneys with student debt.

The post Student Loan Repayment Strategy for Government Lawyers appeared first on The Student Loan Sherpa.