If you are a lawyer looking to have your loans forgiven, you have come to the right place. There are many federal, state, and local programs that provide loan repayment assistance and/ or forgiveness for lawyers in exchange for service.
Let's take a quick look at the programs available to you:
Program | Award Amount |
|---|---|
Income Driven Repayment Plans | 100% of Remaining Balance |
Public Service Loan Forgiveness Program | 100% of Remaining Balance |
Department of Justice Attorney LRP | up to $6,000 / year (Max: $60k) |
John R. Justice Student LRP | varies by state (Max: $60k) |
Herbert S. Garten LRAP | up to $5,600/year (for 3 years) |
Air Force JAG Student LRP | up to $65,000 |
Perkins Loan Cancellation | up to 100% of Perkins Loans |
State Sponsored Programs | varies by state |
Let's delve deeper into these programs and figure out which loans qualify and the requirements necessary to receive the awards.
Income Driven Repayment Plans
If you find yourself drowning in student loan debt repayment, then these income based repayment plans might be the solution you are looking for. They are made for people with high monthly payments in comparison to their income.
With this program, you choose from 4 different repayment plans that are based on your income and family size. As a result, your payments should become more manageable. If your income increases (or decreases) or your family size increases, your payments would change accordingly.
After 20 or 25 years (depending on the plan) of on-time monthly payments, you would be eligible to have your remaining loan balance paid off. Be aware though that any amount paid off is taxed as income.
These repayment plans are open to any one with student loan debt. However, not all loans are eligible to be forgiven.
Overall
This program may not be the best option for you, as it would mean 20 or 25 years before your loans would actually be eligible to be forgiven. There are other loan repayment and forgiveness options out there for lawyers with more benefits. But I say keep this in your back pocket, just in case.
See Income Driven Repayment Plans above for more detailed information.
Public Service Loan Forgiveness (PSLF) Program
The Public Service Loan Forgiveness program is one of the best programs out there. It offers forgiveness on any remaining student loans after making 10 years (or 120) qualified monthly payments. Your payments don't have to be consecutive but you must enroll in a income based repayment plan.
This program is unique in that your eligibility is dependent on your employer and not your job title. The best part is the amount that is forgiven is tax-free under this program. So you won't have to pay taxes on it!
See Public Service Loan Forgiveness Program for a more detailed explanation.
Department of Justice Attorney Student Loan Repayment Program (LRP)
This program is for lawyers who commit to working at least 3 years with the Department of Justice. You must have at least $10,000 in federal student loan debt to be eligible.
The catch is you must be selected to participate in this program. You can request consideration for the loan program though. First, complete an Eligibility Worksheet to determine if you meet the minimum requirements. After that, fill out the Initial Request for Consideration Form. Both are available online.
For every year that you are with the program, you will receive up to $6,000 towards your loan repayment. However, you must continue making your own payments towards your loans otherwise you may be disqualified from the program.
Whatever payment you make towards your loans, the department will match. However, if you make less than $84k/year, the department will automatically give you $6,000. There is a lifetime maximum of $60,000.
Eligible Loans
Under this program, a range of loan types are acceptable including Perkins, Stafford, Direct, Consolidated, and even public health service loans such as Nursing, Health Professions, and Health Education loans. Private loans and parent PLUS loans, however, are not eligible.
To Apply:
Go to the Attorney Student LRP website to submit an application. Be aware that there are different deadlines for renewing your application each year and for people who are new and want to join the program.
You will need to attach all the necessary documentation such as statements from lenders, loan date, service agreements etc. All submissions must be complete and accurate and submitted no later than the deadline.
John R. Justice Student Loan Repayment Program
This award program is operated and funded on a state by state basis so eligibility requirements and award amounts will vary. It is open to local, state, and federal public defenders and local and state prosecutors.
If you sign up for the program and are selected, you are making a 3-year service commitment. Priority is given to people deemed least able to pay back their loans as well as anyone who has previously gotten the award.
Funding for this program changes on a state by state basis. The states with a higher population will receive a larger percent of the funding. Therefore, you should check with your state agency if you want to know the annual award amount. The lifetime maximum appears to be $60k.
Loan eligibility may vary by state as well. In most cases, Federal Direct Loans and Federal Family Education Loans (FFEL) are eligible. Some states also allow Federal Perkins Loans and Consolidated Loans. While private loans, Parent PLUS Loans, and alternative loans, are usually, not eligible.
To Apply:
Contact your local state agency for their specific procedures and requirements for applying. You will probably need to fill out on application, submit all loan documentation, and verify your employment.
Herbert S. Garten Loan Repayment Assistance Program (LRAP)
To be eligible for this program you must be an attorney with at least $75,000 in student loan debt and be employed by a grantee of the program. This means you must be employed by a legal services program that is funded by the Legal Services Corporation.
Be aware there are income and net worth limits to be eligible for the initial receipt of this award. However, these are not considered when you are renewing. Your net worth cannot be more than $35,000 and your income must be less than $78,125 in Alaska, $71, 875 in Hawaii, and $62,500 in the other states.
Recipients of this award are chosen on a lottery system. Although this is based on the amount of funding available, last year, they awarded 125 people. The winners of this lottery can receive up to $5,600 per year for up to 3 years of employment. The award can be used on any loans you took out for law school even private loans!
To Apply:
Head over to the Legal Services Corporation site. There are different forms for those who are new and those who are renewing. If you are new, you’ll need to create a login ID and password for the site. Be sure to have all the documentation necessary and pay attention to their application deadlines.
The Herbert S. Garten's loan forgiveness for lawyers program can even be applied to private loans!
Perkins Loan Cancellation
With Perkins loan cancellation, you could have your Perkins Loans completely forgiven, interest included. To be eligible for this benefit you must be a full-time attorney of a federal public or community defender organization. Your employment must have begun on or after August 14, 2008 and you must have completed 5 years of service.
Every year that you work in an eligible employment or volunteer service, you can have a portion of your loans cancelled. For your 1st and 2nd years, they will cancel 15%. For your 3rd and 4th years, 20% will be canceled and for your final 5th year, the remaining 30% will be canceled.
You will have to apply for the benefit through your school.
Air Force JAG Student LRP
If you decide to join the Air Force as a Judge Advocate General, you would be eligible to receive up to $65,000 over a 3-year period in loan repayment assistance. You must first complete one year as a JAG Officer. Then payments will begin to be made directly to your lender.
As part of the program, you may also qualify for PSLF and possible benefits under the Post-9/11 GI Bill. In addition, you would be able to apply for tuition-free Masters of Law programs in certain specialties.
Employer Loan Repayment Assistance is a thing! Check with your employer to see if this is available to you!
State Sponsored Loan Repayment and Forgiveness Programs
Check out the American Bar Association for a summary of all the programs offered by state as well as more than 100 different programs available by specific law schools.
There are 24 loan repayment assistant programs available to you in 23 states. Many of these programs offer assistance on a tax-free basis so you don't have to pay taxes on the amount you receive. These loans or grants are open to civil legal aide attorneys or other public interest attorneys.
State | Time Limits | Max Annual Awards |
|---|---|---|
District of Columbia | None | $12,000 |
Florida | None | $5,000 |
Illinois | up to 5 years | $4k OR $10k |
Indiana | None | $5,000 |
Kansas | up to 5 years | $3,000 |
Louisiana | up to 10 years | $5,000 |
Maine | None | $6,000 |
Maryland | up to 3 years | $10k (Lifetime Max: $30k) |
Massachusetts | set by local programs | Max: varies Range*: $112 - $3,675 |
Minnesota | up to 15 years | Max: varies Range*: $1,077 - $5,742 |
Mississippi | up to 5 years | $5,000 |
Montana | up to 5 years | $2,500 |
Nebraska (NLTAF) | None | Average: $479 |
Nebraska (NCPA) | 3 years required | $6,000 (Lifetime Max: $42k) |
New Hampshire | up to 80% of total law school debt | $8,000 |
New Mexico | None | $7,200 |
New York | from 4th year of eligible employment | $3,400 |
North Carolina | must be employed at least 6 months | $4,800 |
Ohio | None | $6,000 (Lifetime Max: $75k) |
Oregon | 3 years | $7,500 |
Pennsylvania | up to 10 years | $5,500 |
Texas | graduated within last 10 years | $4,800 |
Vermont | None | $5,000 |
Virginia | None | $5,000 |
*Ranges given based on 2018 awards.
Some states even allow you to use the funds for undergraduate loans!
For more information, check out the American Bar Association.
Things to Note:
- Any debt forgiven you have to pay taxes on.
- Loans in default are not eligible for forgiveness programs (but are eligible for discharge programs). Defaulted loans must be brought back to good standing first (rehabilitated or consolidated). Else-wise you could try student loan settlement or bankruptcy.
- Check every year to make sure you still qualify for whichever program you choose. You don't want to get to the end and find out that you do not.
- You need to re-certify every year for the income driven repayment plans, PSLF program, and yearly forgiveness programs.
- Even if you qualify for more than one program, you may not be able to do them at the same time.
All in All
With over $100,000 in student loan debt, the pressure to make payments can feel overwhelming. But there is hope out there for you in the form of loan forgiveness programs. Use them to your advantage and in a few years, you too could be living life debt free.
*DISCLAIMER: The Information provided in this post is simply the opinions of the blogger and is given in the spirit of educational fun. It is not investment advice. Please do your own research and decide what is right for you before investing in any asset. If necessary, seek the help of a certified professional in discussing your options.