According to the National Center for Education Statistics, average student loan debt for law school graduates is $145,500. This total includes student loans that law students took out for their undergraduate degrees along with their Juris Doctor (JD). If we focus on the repayment of the loans, assuming current interest rates it will result in a total interest payment of $53,200. The average law school loan payment for that amount of debt would be $1,656 a month.
Seventy-five percent of 2018 law school graduates took student loans, according to Law School Transparency, a nonprofit organization.
“On average, Law students borrowed $115,481 to $130,900 to pay their Juris Doctor degree alone, for graduation in private law schools and $89,962 for those who attended public law schools.”
Learn more about repaying your law school loans and how you can go about reducing your law school debt.
Table of contents
- Top School’s associated with the highest law school debt
- How to repay law school loans
- Costs of legal education and time span to repay debt
- Ways to reduce law school debt
Top School’s associated with law school debt
Here is a list indicating the schools associated with highest law school debt as per usnews.com
|SCHOOL NAME||AVERAGE INCURRED LAW SCHOOL DEBT||
PERCENT OF GRADS WITH DEBT
Southern University Law Center
|Florida A&M University||$61,500||100%|
Nova Southeastern University
North Carolina Central University
As shown above, Nova Southeastern University has the highest average incurred law school debt.
How to repay law school loans
If you’ve already borrowed loans for law school, the right repayment strategy for you will likely depend on your career path — and the salary you earn as a result.
Following are the ways to repay the loans in small span of time:
Apply a lump-sum payment
i.e An unexpected bonus, a tax refund or an inheritance might seem like a great excuse to splurge on a vacation. Keep this in mind however: A Caribbean cruise lasts a few days, but a student loan repayment schedule drags on for 10 years. If you get a windfall, devote the after-tax portion to reduce the amount of your student loan. It's a move that will slash your lifetime interest costs and shorten your amortization schedule.
Apply for Loan forgiveness
i.e Working as a public lawyer? You might be eligible to walk away from some of your debt. The most generous student loan forgiveness program is offered by the federal government but states also let qualifying borrowers out of outstanding balances. These programs allow debtors to continue making minimum payments for lower amounts. However, the process of winning forgiveness is neither quick nor simple.
As an emphasis, This is not for graduates from private law schools.
If you took out low-rate government loans to pay for graduate school, you probably can't do much to improve your interest rate. However, if you borrowed privately, there's a chance you could get a lower rate by refinancing with a lender such as Earnest or SoFi. You'll need to have solid credit and a good job to make this option work.
Consider the snowball method
When the balance of your student loan is larger than your annual salary, it's easy to get discouraged about your progress. The snowball method seeks to build momentum by creating small victories. It works like this: You scrimp and save to pay off your smallest loan while still making minimum payments on your other student debt. Upon retiring one loan, you'll feel a burst of accomplishment that hopefully motivates you to move on to the next smallest loan in your portfolio and focus on retiring that debt. The downside to this method is that if your small loans also carry low-interest rates, you may not be making as much of a dent as you think.
Make an extra payment
Student loans don't have prepayment penalties, so it makes sense to apply for extra payments if possible. If you decide to make more than 12 payments a year, contact your lender in writing with instructions to apply the additional payment to your principal, rather than next month's balance so that your overall interest tab is reduced.
Roll student loan into HLOC
If you have a mortgage with some available equity, you could roll your student loan into your home equity line of credit (HELOC). This could reduce your interest rate and result in tax benefits.
Apply for Deferment or Forbearance
Student loan deferments and forbearance let you temporarily pause or reduce your monthly payments. Deferment stops interest from accruing on certain types of loans during the deferment period, while loans in forbearance always continue to accrue interest.
Costs of legal education and time span to pay loan debt
For the purpose of this analysis, we will lump the law schools into three categories:
The first category is the top twenty best law schools as rated by U.S news Education Grad School rankings.
For our first grouping of the top twenty graduate law schools in the country, the average tuition comes in at $45,569 per year.
The averages are calculated taking the number one school which is Harvard, and the number twenty school which is the University of Minnesota Twin Cities and dividing them by two. The figures and school rankings were all gathered from the U.S News graduate school rankings. All of the figures will also assume the out of state tuition fees.
Therefore, the average cost of law school for a graduate of the top twenty law schools in the country comes out to be $136,707 plus their undergraduate degree of $76,000 to be a final total of $212,707.
According to Berkeley University Career Center, it takes on average three years of law school to pass the Bar so that you can become a practicing lawyer.
Second, we will analyze the second group of top law schools. The average cost of tuition for this grouping is $38,308 which applied to the same three-year figure would come out to $114,924. These figures were calculated in the same format as described above in the first grouping.
Adding back in the $76,000 for the undergraduate degree and you have a total completion cost of $190,924 to go from high school graduate, all the way through passing the Bar.
Finally, we will analyze the third grouping of top law degrees in the United States. The average cost of these schools does not vary significantly from the second grouping at $37,500. This would lead to a three-year grad school cost of $112,500, with a total cost of $188,500 to become a lawyer.
As the above data indicates, it could take a large number of loans to be able to complete a law degree from one of the most prestige’s law schools in the country.
Below mentioned is the cost of law school in town or out town:
Lowest-cost private school: Brigham Young University, $23,940
Highest private school: Columbia University, $62,700
Lowest public in-state school: University of North Dakota, $11,161
Highest public in-state school: University of Virginia, $54,000
Lowest public out-of-state school: University of the District of Columbia, $22,402
Highest public out-of-state school: University of Connecticut, $57,852
Bar loans as a cost of education
Even law students don’t qualify for subsidized federal loans, which cover interest while you’re enrolled, this balance will also increase when one is not able to pay the interest and in the end one need to pay much more amount than originally borrowed. Then one can even think of getting bar loans i.e. Bar loans are private loans for bar study courses, bar exam fees and living expenses while you’re studying for the bar.
Skip bar loans if possible — they have high interest rates compared with student loans and typically cannot be included in student loan refinancing. If you take one, plan to pay it off as quickly as you can.
You can apply for bar loans starting in your final semester of law school or up to a year after graduation.
Jeffrey Hanson is a financial aid consultant for the Law School Admission Council and the former director of financial aid at the Chicago campus of Northwestern University, which includes its school of law. He says you shouldn’t necessarily
Worried about your college tuition? Learn more about student loans
Ways to reduce your law school debt
The cost of law school is high, you can reduce the amount you have to borrow to pay for the cost of course, as well as reduce the cost of your loans. Here are a few ways to minimize your law school debt, before and after you attend school:
Explore law school scholarship as much as you can to have thorough ways of reduction in cost of law school and grants to pay for law school without debt.
Try to cover as many costs as you can with federal student loans, this loan offers possibly lower interest rates than private loans. Possibility of forgiveness after you graduate.
Compare different private law school loan options before applying for the loan, find the lowest interest rate and most favorable repayment terms.
Work part-time during college to reduce the amount of financial aid you need.
To avoid extra payments make on-time payments to protect your credit score.
Unfortunately, there can be a lot of confusion around what options are available for student loan borrowers. By going through the above-mentioned data you can find useful information that what you need to do for lower your payments and make them more manageable.
Before you choose a plan of action it is important to understand the benefits you might get. It is important to keep in mind the extra payments you will have to pay over time. While lowering payments can feel like a quick win, it can also have long term consequences. Choose wisely