How To Relax About the Law School Debt

*Pep talk voice*:  You got yourself into law school.  You had to do some kind of selling of yourself.  You're almost definitely capable of getting some kind of job.  And really, with income dependent or contingent repayment plans, as long as you have a job, you'll be able to reasonably pay your debt payments.

Ok, I know that you probably react the way I usually did to this kind of talk.  The pessimist in me would say, "What if I can't get ANY job.  ANYTHING?!"  Then the pessimist would continue to argue, about how I'll never be able to buy a house, buy things on credit, etc. because I'll have student loans for 25 years.

Well, pessimist, I don't really have a response to you.  You might be right.  Maybe you won't have a house for 25 years.  (Who among our generation starting their careers amidst the recession really still expects a house any time soon?)  Maybe you're capable of writing a personal statement and taking the LSAT, but you're not capable of flipping burgers.  As for the rest of you capable burger-flippers, you can handle the debt.  It can work.  

I have a special benefit to my new desired career direction, in that teachers in public (government) institutions are able to receive debt forgiveness after 120 loan payments are made.  (10 yrs.)  The same goes for those who qualify in other "public service" jobs.  According to FedLoan Servicing, Public Service Loan Forgiveness can be available to those working for:
  • A Federal, State, local, or Tribal government organization, agency, or entity (including most public schools, colleges, and universities, and all Tribal colleges or universities);
  • A public child or family service agency;
  • A non-profit organization under certain IRS codes, (including most not-for-profit private schools, colleges, and universities);
  • A private non-profit organization (that is not a labor union or partisan political organization) that provides at least one of the following public services:
    • Emergency management
    • Military service
    • Public safety
    • Law enforcement
    • Public interest law services
    • Early childhood education
    • Public service for individuals with disabilities and the elderly
    • Public health
    • Public education
    • Public or School library services
    • Other school-based services  [Janitorial??]
There are certain requirements that must be met, but this opens a lot of opportunities to reduce the amount you'll ultimately pay, and the length of time!  

There are also other courses of action that can possibly alleviate the debt.  Debt consolidation options may be available if you have more than one loan.  Not to mention forbearances, deferments, and even complete forgiveness!  (You might have to die or become a vegetable, but hey, at least it's a possibility that you could wipe out the debt entirely!)  However, you should definitely look to deferments before forbearances as they can lead to damaged credit.  

The reason I mention burger-flipping, is that there are often income contingent repayment plans.  These plans operate based off of your annual income reported on your taxes.  Your monthly payments are set at a reasonable amount based on that income.  Of course, on a fry-cook salary for example, having loans like these to repay will take a toll on your ability to pay other bills, grow your wealth, etc.  But it will be a lessened impact than having to pay the fairly large amounts required by most default repayment plans.

I think even the pessimist in me felt a lot brighter about the debt situation when I realized there are a lot of ways to mitigate the stress of the student loan repayment.  The debt is definitely a tough part of the decision to quit law school, but it's probably not so terrible as you may think.  (I realize that this post may actually encourage some to stick with or start law school, too... if that's the case, rock on!  Good luck to you!)

Next time on How to Quit Law School:  A note to those of you who came across this blog in your quest to decide if STARTING law school is for you.

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