Blog · Student Loans
Student Loan Repayment Guide for Young Lawyers
L.J. Jones, CPA & CFP® · March 14, 2022
Student loan repayment is a daunting task for young lawyers. It is expensive and there are a lot of options to consider. This guide covers each repayment plan available to young lawyers, including pros, cons, and additional considerations to understand before choosing.
An average lawyer graduates owing over $160,000 in student loan debt, with monthly payments that can exceed $1,600. Choosing how to repay largely comes down to two factors: monthly payment amount and length of repayment.
Standard Repayment Plans
The 10-year standard plan is the federal default and usually has the highest monthly payment but the lowest total cost. Graduated plans start lower and increase every two years. Extended plans stretch payments over 25 years for a lower monthly amount, at a higher total cost.
Income-Driven Repayment Plans (IDR)
IDR plans base payments on a percentage of discretionary income, recalculated annually, with any remaining balance forgiven at the end of the plan. Options include REPAYE, PAYE, IBR, and ICR, each with different payment percentages, forgiveness timelines (20-25 years), and eligibility rules.
Key considerations: forgiven balances are generally taxable (though a temporary exemption applies through 2025), you must recertify income annually, not all loans are IDR-eligible without consolidation, and married borrowers may reduce payments by filing taxes separately — though this can raise other taxes, so consult a tax professional first.
Public Service Loan Forgiveness (PSLF)
Lawyers in public service or nonprofit roles can pair an IDR plan with PSLF to receive tax-free forgiveness after 120 qualifying monthly payments while working full-time for a qualifying employer.
Privately Refinancing
A private lender pays off your federal loans and issues a new loan, often at a lower rate. The tradeoff: you permanently give up access to federal protections like income-driven plans, payment pauses, and potential future forgiveness.
Final Takeaways
There's no single best option — the right plan depends on your income, career path, and risk tolerance. The 10-year standard plan suits those who want to pay off debt quickly while preserving federal flexibility; PAYE suits many young lawyers pursuing IDR; PSLF is ideal for public-service careers; and private refinancing suits lawyers confident in a stable, high income who want the lowest possible rate.
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