Recently Graduated From Law School and Haven’t Repaid Your Student Loans? Here Are Six Steps To Help You Reenter Repayment

Earlier this summer, as part of the debt ceiling signed by the President, the payment pause that began at the start of the COVID-19 pandemic will end with no further extensions offered. As a result, interest on student loans will accrue starting on September 1, 2023, and payments will be due starting in October.

If you graduated from law school during the payment pause and are about to make student loan payments for the first time, now is the time to ensure you are in the best payment plan and are ready to make your first payment. Your first payment will be due in October 2023, unless you graduated recently (within the last 6-9 months) and will still be in your automatic grace period (usually six months).

If you are working in public interest law, these steps should set you on the right path to eventually earn Public Service Loan Forgiveness (PSLF).

• Update your contact information on studentaid.gov and your loan servicer

Wrong contact information with either could make you miss important updates regarding your student loans. If you are not sure which servicer your loans were transferred to, log into your Federal Student Aid dashboard and scroll down to the “My Loan Servicers” section. If you have trouble logging in, call 1-800-4-FED-AID (1-800-433-3243) for loan servicer information. For more help in identifying your loan servicer, click here.

• Enroll in or recertify your income driven repayment (IDR) plan

As its name suggests, an IDR plan is based on your income. To earn PSLF, it is critical to choose a qualifying repayment plan. Qualifying repayment plans include all of the income-driven repayment (IDR) plans (plans that base your monthly payment on your income and household size) and the 10-year Standard Repayment Plan. Your monthly payment amount will depend on what repayment plan you choose. If you don’t choose a plan, you’ll be put on the Standard Plan (not an income-driven plan). Keep in mind the Standard Repayment Plan for Direct Consolidation Loans, Graduated Repayment Plan, and Extended Repayment Plan do not qualify for PSLF. You can use FSA’s Loan Simulator to explore your repayment options to see how much your payments will be on the plans.

The Department of Education announced a new income-driven repayment plan called ‘SAVE.’ If you are already enrolled in the REPAYE Plan or sign up for the REPAYE plan now, you will automatically be transferred to the SAVE plan. Under SAVE, your monthly payments will drop by at least $1,000 annually and any unpaid interest will be erased on a monthly basis. Read more about SAVE here.

• Consider enrolling in autopay

With your loan servicer, enrolling in autopay can save you 0.25% on your interest rate. You’ll get a reminder before every payment is made and get your monthly payment amount at least 30 days before your first due date. You should get your first bill at least 21 days before your due date. If you were enrolled in autopay before the payment pause, you’ll most likely need to re-enroll in autopay.

• Pay attention to messages you receive from your loan servicer

The Department of Education has promised that for the next year, any missed, partial, or late payments will not result in default or loans being sent to collection agencies. In addition, missed payments will not be reported to credit reporting agencies. However, missed payments do not count towards PSLF, unless you repay the amount due within 15 days of the due date.

• If you still can’t afford to make student loan payments, you can consider temporary relief options, such as forbearance and deferment.

You may need to apply for forbearance or deferment, which temporarily lower or pause your payments. Keep in mind these affect loan forgiveness options, such as Public Service Loan Forgiveness or IDR plan forgiveness.

• Use the PSLF Help Tool to certify for qualifying employer

If you are working in public interest law, it is not required, but good practice, to fill out and submit the PSLF form annually or whenever you change employers. This can save you a lot of heartache down the line when you’d have to submit PSLF forms for each employer you worked for all at once. It could become difficult to contact those employers after such a long time or you could discover that some of your employers do not qualify. You can use the PSLF Help Tool to complete your PSLF form, send your form to your employers for their digital signature (certifying your employment), and finally, electronically submit your form to the PSLF servicer for processing.

At Equal Justice Works, we are committed to ensuring that no law student or lawyer is deterred from a public interest legal career by the burden of student debt. Through our work, we support aspiring and current public interest lawyers to understand the often-complex student debt landscape. We know minimizing the burden of student debt is crucial in supporting public interest legal careers, which in turn, are crucial to the benefit of our communities and justice system.