How to Pay Off Law School Debt
Obtaining a law degree is an expensive educational pursuit. Many law students can incur over $100,000 in law school debt for three years of legal education. Your student loan bill can be large and daunting, but with careful planning, early, you can pay off law school debt.
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Instructions
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Minimize your law school debt while in law school. Create a budget and determine your needs so that you do not have to take out the maximum living allowance. Many students take out bar study loans for the summer following their graduation so that they will have money to live while studying for the bar--if you must do this, then take out only what is necessary.
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Begin paying your loans early. In many cases, you do get a six-month grace period where you do not have to pay back your loans. Interest continues to accrue during this grace period, so if you begin paying back your loans after graduation, you will not only pay down some of the principal but also avoid paying as much in interest.
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Choose a student loan repayment plan that will maximize your ability to pay. If you choose an "income-sensitive" or "income-based" plan, your payment is tailored to your ability to pay. These are not the fastest options for paying off your law school debt, however, they prevent you from paying the late fees and penalties that occur if you fail to pay your student loan bill on time because you cannot afford it.
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Pay extra money toward your loan when you have it. Student loan companies call this "pre-paying," and you can do this without being charged an extra fee.
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Tips & Warnings
Most student loan providers offer a variety of loan repayment options to facilitate the repayment process. A standard plan is the ten year repayment plan in which you are automatically enrolled when you complete your loan application, however, if you find it too difficult to pay once your bills are due, you can request a "graduated plan," an "income-sensitive" plan, an "income-based" plan or an extended payment plan.
The extended payment plan will adjust your payment amount by lengthening the repayment period of your loan from 10 years to 25 or 30 years.
