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If you’re a law school graduate, you likely have student loan debt — 71% of law school grads do, with an average law school debt of $130,000, according to the Education Data Initiative. Whether you’re concerned about being able to manage your monthly payments or you’d like to save money on interest, now is a good time to consider a new repayment plan.
Here, we’ll focus on how to pay off law school debt using two popular methods— refinancing and consolidating — and the pros and cons of each. Keep reading to learn which one may be right for your situation.
Key Points
• Making interest-only payments on student loans during law school can help manage debt.
• After graduation, borrowers can select a repayment plan that aligns with their budget and goals.
• Refinancing may lower interest rates for some borrowers but forfeits federal protections.
• Consolidation simplifies federal student loan payments and can extend loan forgiveness eligibility.
• Student loan forgiveness and employer loan repayment assistance may be options for some law school graduates.
Law School Loan Refinance
Often, one of the main goals of refinancing law school loans is to reduce the amount of interest paid over the life of the loan. To do this, borrowers ideally qualify for a lower interest rate, which saves them money.
Another way a borrower can reduce interest is to shorten their loan term — the payment period of their refinance loan. However, that means their monthly payments could be considerably higher. In this instance, student loan refinancing for law school loans may work best for people earning a high salary and who have a good sense of job security.
One drawback to refinancing federal student loans is losing access to certain federal protections, such as loan forgiveness programs, income-driven repayment plans, and deferment options. That’s because when you refinance, you’re paying off one or more federal loans with a new, private loan.
Considering refinancing your law school loans? Before moving forward, make sure you won’t need those federal protections.
How to Refinance
As you explore the option of refinancing to see if it makes sense for you, it’s helpful to know what’s involved. The process of refinancing is pretty straightforward.
1. Check Your Credit History
Refinancing lenders set interest rates based on an applicant’s credit score. Requirements vary, but many lenders like to see a credit score of 670 or higher, which Equifax, one of the credit reporting agencies, considers “good.” Keep in mind the higher the score, the more likely a borrower is to get a better offer or interest rate. If your credit score is below 670, you may choose to take some time to build your credit before refinancing.
You can request your credit report for free from AnnualCreditReport.com. And you can find out your credit score for free from Experian, and also through some banks and lenders.
2. Explore Income-Driven Repayment Options
If your goal is to have more affordable payments, an income-driven repayment (IDR) plan may be a better option. These plans are designed to make student loan payments more manageable by basing monthly payments on the borrower’s discretionary income and family size. There are currently three IDR plans open to borrowers: Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and Pay As You Earn (PAYE).
While most of the current income-driven repayment plans will close in the coming years, IBR will remain open and available to current borrowers. With IBR, you’ll pay 10% of your discretionary income each month on a 20-year term if you first borrowed a loan after July 1, 2014. IBR forgives your remaining balance if you still owe money at the end of the term.
As for the two other IDR plans, PAYE sets your monthly payments at 10% of your discretionary income and extends your loan terms to 20 years. ICR sets your payments to 20% of your discretionary income and has a repayment term of 25 years. As noted, both of these plans are currently available to borrowers, but they are set to close and will not be accepting new enrollments on or after July 1, 2027. If you’re currently on PAYE or ICR, you have the option of switching to IBR.
For borrowers taking out their first law school loans on or after July 1, 2026, there will be only one repayment option that is similar to the current IDR plans: the Repayment Assistance Program (RAP). On RAP, payments range from 1% to 10% of a borrower’s adjusted gross income for up to 30 years. At that point, any remaining debt will be forgiven. If a borrower’s monthly payment doesn’t cover the interest owed, the government will cover the interest.
3. Run the Numbers in a Student Loan Refinancing Calculator
An online student loan refinancing calculator can help you determine what interest rate you’ll need to qualify for in order to make refinancing worth your while. It can also show you different loan term options. Generally, the longer the repayment timeline, the lower your monthly payments, but the more you’ll pay in interest over time. Shorter timelines mean higher payments and less interest paid.
4. Compare lenders
Go online to research the top lenders that offer student loan refinancing. Select a handful with strong reputations that also offer your target interest rate.
5. Prequalify to See Terms
Get prequalified to see what the loan terms are. (This requires only a soft credit check, which doesn’t affect your credit score.) When comparing terms, don’t only consider the lowest interest rate. Also look for any added benefits (such as unemployment protection), cash-back bonuses, and customer service ratings.
6. Select a Lender and Apply
Once you’ve settled on a lender, gather the documents you’ll need to make a formal application, such as W2 forms or pay stubs to verify your income.
Pros and Cons of Refinancing
Carefully review the pros and cons of refinancing student loans before you make a decision.
| Pros of Refinancing | Cons of Refinancing |
|---|---|
| The potential opportunity to get a lower interest rate and more favorable loan terms | Giving up federal protections, including loan forgiveness, when refinancing federal loans |
| Save money on interest — possibly thousands of dollars over time | May not be worth it if your new interest rate isn’t significantly lower than your current rate |
| May be able to pay off loans faster | May not substantially lower your monthly payment |
Consolidating Law School Loans
Debt consolidation involves taking multiple loans and combining them under one new loan with just one monthly payment. The main goal is to simplify your finances.
Borrowers who took out federal student loans as one of the ways to pay for law school may use a federal program called a Direct Loan Consolidation. Your new loan’s interest rate will be the weighted average of all the old student loans’ interest rates, rounded up to the nearest eighth of a percent. This means your interest rate might actually be slightly higher than the rate you were paying before consolidation on some of your student loans.
When you consolidate, you’ll also have the option to select a new repayment plan. Consolidation can also be a first step toward loan forgiveness, including law school loan forgiveness.
Private student loans cannot be consolidated using the federal consolidation program.
How to Consolidate
The Direct Loan Consolidation application process is available through the office of Federal Student Aid. Simply fill out the online application, or you can print out a paper version and mail it. It may help to first gather all of your loan records, accounts, and payment history as you work through the form. The process takes about 30 minutes total.
If you have a loan that will be paid off in a short amount of time, you might consider leaving it out of the consolidation. The same goes if you have already made qualifying payments toward forgiveness on certain loans.
Your first new payment will be due within two months of when your Direct Consolidation Loan is first paid out.
Pros and Cons of Consolidating
Just like refinancing, there are advantages and disadvantages of student loan consolidation.
| Pros of Consolidating | Cons of Consolidating |
|---|---|
| Could lower your monthly paymen | Pay more in interest over the life of the loan/td> |
| Simplifies repayment | Extends your repayment period |
| Eligibility for federal protections, including Public Service Loan Forgiveness (PSLF) | Can cause you to lose credit for payments toward loan forgiveness |
| Doesn’t affect your credit score | Private loans and Parent PLUS loans cannot be consolidated with federal loans in the student’s name |
| Allows you to switch from a variable interest rate to fixed |
What Are Some Solutions for Handling Law School Debt?
If you’re passionate about having a career in law, don’t let the cost of your education deter you from pursuing a rewarding profession.
Managing law school debt might seem overwhelming, but having a strategy can help you pay off your debt.
Here are several solutions to consider:
Making Interest-Only Payments While in School
Under the federal student loan deferment program, you aren’t required to make any payments while you’re in school. However, paying at least the amount of interest that is accruing on your loans each month could help keep your student debt from snowballing. And if you are able to pay more than just the interest, it’s a smart idea. The faster you pay down your loans, the less they’ll generally cost you over time.
Picking a Repayment Plan That Fits Your Budget
Once you graduate and start working, you’ll likely have a few financial priorities competing with your student loan repayment. In general, it can be a smart strategy to pay down law school debt as soon as you have a steady income. But paying down your loans too aggressively could leave you without enough savings. Building up an emergency fund can provide you with a buffer in case you have unforeseen expenses.
It can also make sense to start putting a percentage of your income toward a retirement fund to take advantage of potential long-term gains. You may want to factor your savings goals into your budget and pick a student loan repayment plan that fits your cash flow.
Putting any Extra Funds Toward Your Debt
Alternately, you can make paying down debt your top priority and put any extra income you have toward your highest-interest loans. Of course, if you choose this route, you may want to make sure you have a financial safety net in place first. This law school debt repayment strategy is typically called the avalanche method.
Essentially, with the avalanche method, you make additional payments on your highest-interest loans first while making regularly scheduled payments on all your loans. This helps reduce the amount of total interest you’re paying. And by paying your loans down early, you could save on interest payments over the years because the faster you pay off your student loans, the faster you can stop paying interest on your debt.
Cutting Back
You could also try to cut back on your monthly expenses and put that extra money toward your debt payments. While sticking to a budget can be challenging, it is one tool to help you stay on track with your spending.
Can you cut back on certain expenses each month? You may have to make a few sacrifices within reason. See what simple changes you can make to your budget — such as eliminating your gym membership and working out at home instead, or bringing lunch to work rather than buying it — to find extra money to put toward your law school debt. Paying more than the minimum monthly payment on your student loans can go a long way toward getting out of debt faster and saving on interest.
Making Your Loan Payments Cost Less
If you find yourself looking for a way to make your federal loan payments more manageable, an income-driven repayment plan (taking note of all the changes coming to these plans outlined above) can also lower your monthly payments by capping the amount you pay based on your discretionary income and household size.
With these plans, you may pay more interest over the life of your loans. But if your monthly payments are too high, an income-driven plan can bring them down.
Another option that can potentially reduce the cost of monthly payments is to refinance your student loans with a private lender. When you refinance, a private lender gives you one new loan to pay off your existing student loans (including your law school debt and the undergraduate debt you may still have). Your new loan will have new terms and a new (hopefully lower) interest rate.
When you opt for law and MBA refinancing, instead of paying on multiple student loans, you’ll only have to worry about paying off one loan. If you qualify for a lower interest rate and/or shorten your loan repayment term, you may pay less in interest over the life of the loan.
Just remember: Refinancing federal student loans with a private lender means you’ll no longer be able to take advantage of the benefits that come with federal loans, like forgiveness, deferment, and forbearance.
Employer Student Loan Repayment Assistance
With more borrowers struggling with student loan debt, more and more employers, including some law firms, offer student loan repayment assistance as a job perk.
For example, an employer offering this benefit may make monthly payments to your student loan servicer or lender on your behalf. There may be eligibility requirements for employees, including a certain length of service. Program specifics vary from employer to employer.
If you are in a public interest legal job, many civil legal aid organizations and other public interest employers offer loan repayment assistance to their employees.
Check with your employer to find out if they offer a loan repayment benefit program.
Long-Term Strategies for Managing Law School Debt
In addition to the options mentioned above for managing your debt, there are also some steps you can take to help reduce what you owe on your law school loans over the long term.
Pursuing Public Service Loan Forgiveness (PSLF)
If you’re a lawyer employed by a government or nonprofit organization, you may be eligible for the Public Student Loan Forgiveness (PSLF) program. PSLF forgives the remaining balance on your federal Direct Loans after you’ve made the equivalent of 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for an eligible employer.
Private student loans are not eligible for the PSLF program.
Leveraging Tax Deductions and Credits
There are tax deductions you may be eligible for that can help you with your student loan debt. For example, the student loan interest deduction allows borrowers to deduct the lesser of $2,500 or the amount of interest they paid on federal or private student loans for the year.
Eligibility requirements to claim the student loan interest tax deduction include: A borrower must be legally required to pay interest, they cannot be claimed as a dependent on someone else’s return, they must not be married and filing separately, and their modified adjusted gross income (MAGI) must be below the annual limit, which for 2025 is $100,000 for single filers and $200,000 for those who are married and filing jointly.
The Takeaway
Two popular ways of paying off law school debt are refinancing and consolidating. With refinancing, borrowers may qualify for a lower interest rate to save money and also pay off their loans faster if they choose a shorter loan term.
Direct Loan Consolidation is a federal program that helps borrowers simplify their finances by combining multiple federal loans into one — without losing federal protections. Those struggling with law school debt can explore both options to see which one is the best fit.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
What is the average law school debt upon graduation?
What is the average law school debt upon graduation?
Law school borrowers graduate with an average law school debt of approximately $130,000, according to the Education Data Initiative. Seventy-one percent of law school students graduate with debt.
Can law school debt be discharged in bankruptcy?
Yes, law school debt (like any student debt) can be discharged in bankruptcy. While updated guidance from the Department of Education and the Justice Department has made it easier to discharge student loans in bankruptcy in recent years, the process is still quite challenging and complex. Bankruptcy can also have serious negative impacts to your credit and is often considered a last resort. If you are considering bankruptcy, it’s wise to consult an experienced bankruptcy attorney to make sure it is the right course of action for your situation.
Are there any forgiveness programs for law school debt?
Forgiveness programs for borrowers with law school debt include the Public Service Loan Forgiveness program for those who work in public interest jobs for a government agency or nonprofit. After 120 qualifying payments while working for an eligible employer, the remaining balance on your loans may be forgiven.
Those with law school debt may also be eligible for forgiveness through the Income-Based Repayment plan, which bases your monthly payments on your discretionary income and family size and forgives the remaining balance on your loans after 20 or more years of qualifying payments.
How does income affect loan repayment options for law graduates?
A borrower’s income can affect their eligibility for certain federal loan repayment options. For example, income-driven repayment plans base your payments on an individual’s discretionary income (along with family size). Public Service Loan Forgiveness is for those who work in public interest jobs for the government or nonprofits, which may pay less than jobs in the private sector.
Law graduates with higher incomes — and who don’t need federal benefits such as income-driven repayment and deferment — may want to consider student loan refinancing to potentially get a lower interest rate or pay off their loans in a shorter amount of time.
Is it better to refinance or consolidate law school loans?
Whether it’s better to refinance or consolidate law school loans depends on your specific goals and financial situation. Generally speaking, if you’d like to maintain access to federal benefits such as forgiveness and income-driven repayment, and also simplify your payments, consolidation may be an option for you. If you have a higher income and a strong credit score, and you don’t need federal benefits, refinancing might help you secure a lower interest rate, more favorable loan terms, and pay off your loans faster. You can evaluate both options to determine which is better for you.
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SoFi Student Loan Refinance
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