Let’s Get Out of Student Loan Debt

From talking with the people on /r/lawschool/ it sounds like there are a lot of questions about:

  • student loan debt,
  • the best way to break free from debt,
  • how to still live your life when you owe six figures (like buying a house); and
  • even whether you should be investing while you’re in debt.

People don’t like talking about student loan debt because it’s overwhelming.

You are not alone.

Literally just about everyone around you is suffering through the same problem. People need to understand that folks with student loan debt aren’t a financially reckless minority. High student loan debt is basically a prerequisite to becoming a lawyer these days.

The ABA conducted a survey recently. Here’s what they found:

  • The median cumulative student loan debt is $160,000.
  • More than one of every four has $200,000 or more in debt.
  • 95% of survey respondents took out loans to attend law school.

Why is it so bad?!?

You can blame it on rising tuition or a federal loan program with free flowing funds, but it’s definitely not inflation or you “making poor choices.”

Let’s start talking about how you can get control of your debt so you can go back to living your life.

The first thing you’re going to see below this intro text are a bunch of refinance offers. You do NOT have to refinance from a federal loan to a private loan. In fact, there are plenty of reasons not to. (See below for information about programs like PSLF).

These refinance offers are at the top because in our survey nearly 20% of responses indicated they will refinance and there’s not a lot to discuss about it beyond looking at the available interest rates and making a choice. Because the /r/lawschool community is so active we negotiated some special perks. The more people that use it the better perks we can get for you guys.

The next largest cohort of responses indicated that they have no idea what they’re doing. If you’re in that group skip to the next section.

Static Title One

Low interest rates, flexible and easy to navigate, Earnest focuses on your individual financial circumstances (beyond your credit score), consistently producing good results for a variety of readers like you, which is why it qualifies as our top pick. If you’re only going to apply with one company to check your rates, Earnest should be it. Important note: Bonus cannot be issued to residents in KY, MA, or MI. * See Earnest disclosures.

Loan Amount Bonus
$0 – $100K $0
$100K+ $500

Ready to get started?

  • Interest Rates: 5.89%+
  • Bonus Cashback: $500
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    years
  • Rating: 10/10
    5.0 rating
  • Important Disclosures: See Earnest Disclosures

Static Title One

Low interest rates, flexible and easy to navigate, Earnest focuses on your individual financial circumstances (beyond your credit score), consistently producing good results for a variety of readers like you, which is why it qualifies as our top pick. If you’re only going to apply with one company to check your rates, Earnest should be it. Important note: Bonus cannot be issued to residents in KY, MA, or MI.

Ready to get started?

  • Interest Rates: 5.89%+
  • Bonus Cashback: $500
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    years
  • Rating: 10/10
    5.0 rating
  • Important Disclosures: See Earnest Disclosures

Static Title One

A relatively new player on the market, backed by SouthEast Bank, ELFI has been aggressively expanding in the market. For you, that means they might be willing to offer a lower rate, although it will depend on your particular circumstances. I’ve noticed more readers going through the process with ELFI lately, which I take as a vote of confidence that they are finding good rates.

Ready to get started?

  • Interest Rates: 4.86%+
  • Bonus Cashback: $350
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 10
    • 15
    • 20
    years
  • Rating: 7/10
    3.5 rating

Static Title One

A relatively new player on the market, backed by SouthEast Bank, ELFI has been aggressively expanding in the market. For you, that means they might be willing to offer a lower rate, although it will depend on your particular circumstances. I’ve noticed more readers going through the process with ELFI lately, which I take as a vote of confidence that they are finding good rates.

Ready to get started?

  • Interest Rates: 4.86%+
  • Bonus Cashback: $350
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 10
    • 15
    • 20
    years
  • Rating: 7/10
    3.5 rating

Static Title One

Splash Financial is based in Cleveland and is a relatively new "platform" player in the refinancing space. If you want to efficiently conduct a rate check across multiple lenders, Splash is a good option with an expanding list of partners. I've had multiple readers tell me they used Splash to check rates and ultimately went with a lender that they might have otherwise overlooked if not for Splash's ability to pull rates from so many lenders. * See Splash Financial disclosures.

Loan Amount Bonus
$50 - $100K $250
100K+ $500

How the cashback bonus is paid

Once bonus conditions are met and the loan has been disbursed, Splash will send the cash bonus check to the address you provided in the application within 120 calendar days.

Ready to get started?

  • Interest Rates: 5.99%+
  • Bonus Cashback: $500
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 8
    • 10
    • 12
    • 15
    • 20
    years
  • Minimum Loan Amount: $5,000
  • Rating: 6/10
    3.0 rating
  • Important Disclosures: See Splash Financial Disclosures

Static Title One

Splash Financial is based in Cleveland and is a relatively new "platform" player in the refinancing space. If you want to efficiently conduct a rate check across multiple lenders, Splash is a good option with an expanding list of partners. I've had multiple readers tell me they used Splash to check rates and ultimately went with a lender that they might have otherwise overlooked if not for Splash's ability to pull rates from so many lenders.

Ready to get started?

  • Interest Rates: 5.99%+
  • Bonus Cashback: $500
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 8
    • 10
    • 12
    • 15
    • 20
    years
  • Minimum Loan Amount: $5,000
  • Rating: 6/10
    3.0 rating
  • Important Disclosures: See Splash Financial Disclosures

Static Title One

Needing no introduction, SoFi is the grandfather of student loan refinancing companies. Given their standing in the market, they can be selective about who they are willing to refinance and the rates they offer, which is good news to our readers. *Rates shown include autopay discount.

* See SoFi disclosures.

Ready to get started?

  • Interest Rates: 5.99%+
  • Bonus Cashback: $0
  • Loan Types:
  • Loan Terms:
    years
  • Rating: 8/10
    4.0 rating
  • Important Disclosures: See SoFi Disclosures

Static Title One

Needing no introduction, SoFi is the grandfather of student loan refinancing companies. Given their standing in the market, they can be selective about who they are willing to refinance and the rates they offer, which is good news to our readers. *Rates shown include autopay discount.

Ready to get started?

  • Interest Rates: 5.99%+
  • Bonus Cashback: $0
  • Loan Types:
  • Loan Terms:
    years
  • Rating: 8/10
    4.0 rating
  • Important Disclosures: See SoFi Disclosures

Static Title One

Although it can’t directly refinance your loans, Credible is a marketplace of lenders with a single application process that can let you compare rates across a variety (but not all) lenders. Many of the major lenders are not on the Credible platform, so you will still likely need to apply to multiple places. However, if you’re looking to compare offers, Credible offers a lot of value in that you can get a lot of different rates quickly. If you already have an offer from ELFI, SoFi, Earnest or Commonbond, Credible becomes a smart second choice so you can check rates against your original offer. * See Credible disclosures.

Loan Amount Bonus
$0-$100K $350
$100K+ $750

How the cashback bonus is paid

Credible pays the welcome bonus via e-giftcard.

Ready to get started?

  • Interest Rates: 5.28%+
  • Bonus Cashback: $750
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 8
    • 10
    • 12
    • 15
    • 20
    years
  • Rating: 8/10
    4.0 rating
  • Important Disclosures: See Credible Disclosures

Static Title One

Although it can’t directly refinance your loans, Credible is a marketplace of lenders with a single application process that can let you compare rates across a variety (but not all) lenders. Many of the major lenders are not on the Credible platform, so you will still likely need to apply to multiple places. However, if you’re looking to compare offers, Credible offers a lot of value in that you can get a lot of different rates quickly. If you already have an offer from ELFI, SoFi, Earnest or Commonbond, Credible becomes a smart second choice so you can check rates against your original offer.

Ready to get started?

  • Interest Rates: 5.28%+
  • Bonus Cashback: $750
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 8
    • 10
    • 12
    • 15
    • 20
    years
  • Rating: 8/10
    4.0 rating
  • Important Disclosures: See Credible Disclosures
Show All Lenders

Our reviews are biased. The FTC requires websites to disclose whenever there could be hidden interests or unspoken biases related to recommendations. It’s impossible to write about money without there being some conflict of interest. Please assume the following: you got a cashback bonus and Dumpster Phoenix got paid. The student loan company bought us coffee or lunch at least once. We probably have a student loan refinancing water bottle somewhere around the office. This compensation may impact where products appear (and in what order) throughout the site. Read more about how we manage conflicts.

Start here

The first step to taking control is easy but painful. You need to create a simple spreadsheet that consolidates your understanding of your loans. Most people end up with loans from various lenders (Stafford, Grad Plus, Undergraduate, Private, Bar Prep, etc.) and it’s essential to understand the balance owed, interest rate, date payments begin.

To make that easy for you, here’s a template Google Sheet you can use and the link to Federal Student Aid which will have a record of all your federal loans. Complete this step before moving on to the next step.

Resources

👉 Google Sheet

👉 Federal Student Aid

Student loan debt cancellation

Tomorrow, June 30th, the Supreme Court is going to rule on student loan debt cancellation. We’ll update this section then.

I haven’t thought about student loans in three years, what else is new?

Check out the section below about income-driven repayment plans and the new Saving on a Valuable Education (SAVE) repayment plan.

How to get the best refinancing deal

Should you refinance your loans in November 2024? Probably not. If you have federal student loans, you are currently paying 0% interest and $0 payments until September 1, 2023. You want to take advantage of the 0% interest rate as long as you can.

Should you refinance in September 2023? People refinance their loans to save money on interest, get a lower monthly payment, or both.

Let’s look at a law school grad with $200,000 total of student loans (from undergrad, grad and bar prep) and let’s assume that this law grad has an average interest rate across all loans at 7%. Let’s also assume the repayment plan is 10 years.

You would save $35,672 over the lifetime of paying off the loans in 10 years if you refinanced to a rate of 4%.

Can you get a rate of 4% in this market? No, you can’t. Those rates were available two years ago when nobody was refinancing their loans. Today, the best qualified borrowers are seeing 5.25% rates for a 10 Year Fixed refinance loan.

But one of the good things about refinancing student loans is that there are no transaction costs, so you can keep refinancing every time the rates get lower. We usually recommend borrowers check rates every six months to see if they’re eligible for a lower rate.

If you’re not pursuing a forgiveness plan, you will likely save tens of thousands of dollars by refinancing.

Who should you refinance with? The market is hot with student loan refinancing lenders competing for your business. We list the top lenders and keep the rates updated so that you know where to find the lowest rates. Because everyone’s situation is different, we suggest rate checking with a few lenders and selecting whoever offers you the best deal.

How often should you refinance? Refinancing your student loans costs $0 (other than your time). There are no prepayment penalties, origination fees, or service fees. You should check rates every six months to see if you can find a lower rate as your debt-to-income ratio improves. There’s no penalty for refinancing again later.

Income-driven repayment plans

When people hear “IDR” they often get confused with “IBR.” So what is income-driven repayment? IDR refers to the four (soon to be five) student loan repayment options where payments are calculated as a percentage of your income.

Biden Saving on a Valuable Education (SAVE). SAVE is a new income-driven repayment plan created by the Biden administration that is meant to be better than any other repayment plan. We haven’t yet seen the final version of the plan but we know that as of late June 2023 the plan is expected to include some of the following features:

  • Poverty line deduction increase from 150% to 225%.
  • Payment toward undergrad loans is capped at 5% of income.
  • Payment toward graduate loans is capped at 10% of income.
  • A weighted average of undergrad/graduate loans is calculated if you have both.
  • Undergrad loans can get forgiveness after 20 years of payments.
  • Graduate loans can get forgiveness after 25 years of payments.
  • If you owe less than $12,000, forgiveness happens after 10 years.

Learn More: Saving on a Valuable Education

Income-Based Repayment (IBR). Under IBR, you pay 10 to 15% of your income over 20 or 25 years depending on when you originally took out the loans and whether the loans were for undergraduate or graduate school.

Learn More: Income-Based Repayment

Income-Contingent Repayment (ICR). ICR is the oldest IDR plan dating all the way back to 1994. ICR calculates the monthly payments based on your income or a fixed repayment amount over 12 years, whichever is lower.

Learn More: Income-Contingent Repayment

Pay As You Earn (PAYE). PAYE requires monthly payments equal to 10 percent of your income over 20 years. If your monthly payments don’t cover the interest on your subsidized loans, the government will pay the remaining interest for the first three years (this does not apply to unsubsidized loans).

Learn More: Pay As You Earn.

Revised Pay As You Earn (REPAYE). REPAYE requires monthly payments equal to 10 percent of your income over 20 years (for undergraduate loans) or 25 years (for graduate loans). If your monthly payments don’t cover the interest on your subsidized loans, the government will pay the remaining interest for the first three years and half the interest for another three years after that. The government will pay half the interest on your unsubsidized loans at all times.

Learn More: Revised Pay As You Earn

Forgiveness options

Public Service Loan Forgiveness. The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. To qualify, you must be employed by certain public service organizations or non-profit 501(c)(3) tax exempt organizations and make eligible payments on your federal student loans.

Learn More: Public Service Loan Forgiveness.

Income-Driven Repayment Loan Forgiveness. Each income-driven repayment plan has its own forgiveness program that typically results in the loans being forgiven after 20 or 25 years. Prior to March 2021, loans forgiven under these programs incurred a “tax bomb” in that you were responsible for including the forgiven amount in your taxable income the year the loans were forgiven. For now, student loan forgiveness is tax-free until 2026. Congress may choose to extend such tax-free forgiveness but we likely won’t know until 2026.

Buying a house while managing debt

Most lenders look at your debt-to-income ratio as an important metric for deciding whether to offer you a mortgage. If your student loan debt is high, this can obviously be a problem. Thankfully, there are a bunch of banks that understand selling mortgages to lawyers is a good long-term bet because they want those lawyers as long-term customers. Even better, these lenders understand that a typical recent law grad hasn’t yet had an opportunity to save up significantly for a downpayment, so they offer down payments as low as 0%. Ultimately, your student loan debt shouldn’t keep you from getting a mortgage.

Investing while you owe student loan debt

There’s an age old question about whether you should invest or pay down debt. There’s generally two main arguments: (1) you should pay down all debt as fast as you can; or (2) you should always invest if you think your expected rate of return is higher than the interest rate on your debt.

Generally, it’s up to you to figure out what feels most comfortable. Some people don’t like debt, so they pay it off. Others are comfortable with debt, so they invest while carrying large amounts of debt. One way to reframe the question is, would you borrow the amount you have today in student loans from a bank at the same interest rate in order to turn around and invest the money? Most people wouldn’t, which is why paying off your debt is usually a good move (there’s not a lot of rich people that also have student loan debt).

More important than deciding whether to pay down debt or invest, is to make sure that your net worth is moving in the right direction each month. Focus on increasing your savings rate and soon it won’t be an either/or question and you’ll be able to do both.


Student loan refinancing bonuses and companies

Note: We’ve negotiated student loan refinancing bonuses for our readers. If you use these links, you’ll get the bonus and support the development of this site.

Lender

Bonus Cashback

Variable APR from

Fixed APR from

Loan Terms

Variable APR from:
5.89%+
Fixed APR from:
3.95%+
  • Fixed
  • Variable
Loan Terms:
years
Variable APR from:
4.86%+
Fixed APR from:
4.88%+
  • Fixed
  • Variable
Loan Terms:
  • 5
  • 7
  • 10
  • 15
  • 20
years
Variable APR from:
5.99%+
Fixed APR from:
5.19%+
  • Fixed
  • Variable
Loan Terms:
  • 5
  • 7
  • 8
  • 10
  • 12
  • 15
  • 20
years
Variable APR from:
5.99%+
Fixed APR from:
4.49%+
Loan Terms:
years
Variable APR from:
5.28%+
Fixed APR from:
5.28%+
  • Fixed
  • Variable
Loan Terms:
  • 5
  • 7
  • 8
  • 10
  • 12
  • 15
  • 20
years
Variable APR from:
5.54%+
Fixed APR from:
4.89%+
  • Fixed
  • Variable
Loan Terms:
  • 5
  • 10
  • 15
  • 20
years
Variable APR from:
5.31%+
Fixed APR from:
4.90%+
  • Fixed
  • Variable
Loan Terms:
  • 5
  • 7
  • 10
  • 15
  • 20
years
Variable APR from:
5.49%+
Fixed APR from:
5.44%+
  • Fixed
  • Variable
Loan Terms:
  • 5
  • 7
  • 10
  • 15
  • 20
years
Variable APR from:
7.27%+
Fixed APR from:
6.99%+
  • Fixed
  • Variable
Loan Terms:
  • 5
  • 7
  • 10
  • 15
years

  • Interest Rates: 5.89%+
  • Bonus Cashback: $500
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    years
  • Rating: 10/10
    5.0 rating
  • Important Disclosures: See Earnest Disclosures
  • Visit Earnest
  • Interest Rates: 4.86%+
  • Bonus Cashback: $350
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 10
    • 15
    • 20
    years
  • Rating: 7/10
    3.5 rating
  • Visit ELFI
  • Interest Rates: 5.99%+
  • Bonus Cashback: $500
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 8
    • 10
    • 12
    • 15
    • 20
    years
  • Minimum Loan Amount: $5,000
  • Rating: 6/10
    3.0 rating
  • Important Disclosures: See Splash Financial Disclosures
  • Visit Splash Financial
  • Interest Rates: 5.99%+
  • Bonus Cashback: $0
  • Loan Types:
  • Loan Terms:
    years
  • Rating: 8/10
    4.0 rating
  • Important Disclosures: See SoFi Disclosures
  • Visit SoFi
  • Interest Rates: 5.28%+
  • Bonus Cashback: $750
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 8
    • 10
    • 12
    • 15
    • 20
    years
  • Rating: 8/10
    4.0 rating
  • Important Disclosures: See Credible Disclosures
  • Visit Credible
  • Interest Rates: 5.54%+
  • Bonus Cashback: $300
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 10
    • 15
    • 20
    years
  • Rating: 8/10
    4.0 rating
  • Visit LendKey
  • Interest Rates: 5.31%+
  • Bonus Cashback: $600
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 10
    • 15
    • 20
    years
  • Minimum Credit Score: 720
  • Visit Brazos
  • Interest Rates: 5.49%+
  • Bonus Cashback: $0
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 10
    • 15
    • 20
    years
  • Rating: 7/10
    3.5 rating
  • Visit Laurel Road
  • Interest Rates: 7.27%+
  • Bonus Cashback: $750
  • Loan Types:
    • Fixed
    • Variable
  • Loan Terms:
    • 5
    • 7
    • 10
    • 15
    years
  • Visit Citizens Bank