Recent grads rejoice! Your student loan debt that was once referred to as “crippling” can now be more easily compared to something like a broken leg. That’s right, it won’t last forever, and you may even be able to fully function again!
All my excitement is caused by a couple of new loan repayment laws that were recently passed. The first is the Income Based Repayment plan, which promises to lower monthly payments to a level that can realistically be paid on the income of the debtor. With this plan, you can start making small payments you can afford right away, and pay a higher monthly payment when you get a raise or move to a better-paying job. The problem with this plan is that it doesn’t work as well for those who are planning to do public interest and non-profit work. Odds are that if you’re working at a non-profit, you won’t be getting a raise, so your loan payments will always be small—which means you’ll be paying them for a very long time.
If only there was a way to make it easier on those who devote their lives to public service…
There is. It’s called the Public Service Loan Forgiveness Program. This program allows those who work in public service to have their loans forgiven after they make ten years worth of payments. The payments are determined by the income based system I mentioned above, so they’ll be realistic for those receiving a modest public interest salary. After making the 120 monthly payments required, the remainder of the loans is forgiven.
Many students go to law school because they believe that with a J.D. they can change the world or help out the little guy. But the grim reality is that the amount of debt required to get an advanced degree usually leaves recent graduates with no option other than to try and find a job with a big firm. Without a six-figure salary, paying off all those loans is a big challenge. Now, with the Income Based Repayment plan and the Public Service Loan Forgiveness Program, newly minted lawyers will be able to practice in whatever field they are passionate about, and that is a very good thing.
If you’re wondering if you qualify for these programs and how low your payments could be, I would recommend visiting a site like IBRinfo. There you can plug in your information and find out what you can do to ease your student loan burden.