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Attending community college can often be a much more affordable choice than going to a four-year public or private university. Students and their parents can save money both on tuition as well as travel and living expenses, especially if the student lives at home. This can translate into taking out smaller student loans and paying them off sooner after graduation.

Going to a community college also comes with other benefits. Here’s a closer look at why a college-bound student might consider choosing a community college.

What Is a Community College?

A community college, also known as a junior college or two-year college, provides a two-year course of study that either ends with an Associate of Arts (AA) or Associate of Science (AS) degree. Alternatively, it can provide the equivalent to the freshman and sophomore years of a four-year college, since credits can typically be transferred and used toward a bachelor’s degree.

Community colleges are located throughout the U.S. and come in varying sizes. You can find large community colleges with multiple campuses in urban and suburban areas, as well as small community colleges in rural settings.

Many community colleges also have technical and vocational programs with close links to local high schools, community groups, and employers.

Benefits of Attending a Community College

Here’s a look at some of the advantages of going to a community college vs. a four-year college or university.

A Smoother Transition

The transition from high school to college can be challenging, but attending a community college can be easier for some people.

Community college classes are generally smaller and less intimidating. If you prefer smaller class sizes and not having to walk across a large campus daily with thousands (or tens of thousands) of students, then a community college may feel less overwhelming.

Transferring to a four-year college could also be easier for students who have taken classes from a community college.

If you are thinking about using community college as a stepping stone to a four-year school, you may want to find out if the school has a transfer relationship with any four-year colleges, and what GPA and grades are needed to successfully transfer.

If the school doesn’t have a relationship with a college you’re considering, you’ll want to make sure that the credits earned will count at that college.

Flexibility

One reason that many students opt for community college is the flexibility. You can typically take as many classes as you want, and it can vary from semester to semester.

Community colleges also give students the option to enroll when they want, unlike four-year universities, where you typically need to enroll by early fall.

Rolling admissions give students more flexibility in planning their studies, especially if they are working part time or need to save money to pay for tuition and books. The community college website will include key deadlines and requirements, such as transcripts from high school or another college, and any prerequisite classes.

The schedules at community colleges also tend to be more flexible, often allowing a student to work during the day and take classes in the evening.

A Possible Bachelor’s Degree

A growing number of states are allowing some community colleges to offer bachelor’s degree programs. This means students do not always have to transfer to another college after taking classes the first two years. While many of the degrees are focused on a particular industry or skill, community colleges are adding more degree options.

Obtaining a four-year degree at a community college could save a student the time of researching other universities and colleges, transferring credits, having to move, and potentially accruing more student loan debt.

Community colleges are updating the type of degrees offered to meet the needs of the workforce and often include ones in information management, nonprofit management, and health care.

Recommended: A Guide to Choosing the Right College Major

Price Tag

Community college tuition is typically significantly lower than tuition at public and private universities. Some states even offer free community college.

According to the Education Data Initiative, the average cost of tuition at an in-district community college is $3,598 per year. For out-of-state students, the average community college tuition is $8,622.

For comparison, yearly tuition at a public university averages $11,260 (for in-state students) and $29,150 (for out-of-state students). The average student at a private college or university spends a total of $41,540 on tuition and fees.

Even if you don’t live at home while attending community college, you may be able to find housing that is less costly than living in a dorm or an off-campus apartment in a college town. Plus, taking classes at a nearby community college gives you the flexibility to work part time and earn some income you can use to cover your college expenses.


💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

Financing a Community College Education

You can cover the cost of community college (and potentially two additional years at a traditional college after that) using a combination of savings, help from family, financial aid, and loans.

A great first step is to fill out the Free Application for Federal Student Aid (FAFSA), which will let you know if you are eligible for financial aid, which includes grants, scholarships, work-study, and federal student loans (which may be subsidized or unsubsidized).

You can also help pay for your community college tuition by working at a part- or full-time job while taking classes in the evenings.

If you still have gaps in funding, you may want to look into getting a private student loan. These are available through private lenders, including banks, credit unions, and online lenders. Rates and terms vary, depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment and Public Service Loan forgiveness — that automatically come with federal student loans.

The Takeaway

Community college can be an affordable, flexible, and convenient way to pursue higher education. The average cost is less than $4,000 a year for in-district tuition, which can make it a valuable choice for many students. However, students may still need help making ends meet financially, which is where federal and/or private student loans can help.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What are the pros of going to community college?

Community colleges can provide affordable, flexible educational options, often with smaller class sizes. Credits may be transferable should a student choose to pursue a degree at a four-year institution.

Is it better to go to a university or a community college?

Finding the right fit will depend on a student’s needs. In general, a four-year college or university will provide deeper training and greater career readiness than a community college. However, community colleges can be flexible and affordable ways to pursue a degree after high school.

What are the cons of a community college?

Possible cons of going to a community college include more limited paths of study, less preparation for careers, and less sense of community and bonding with classmates and professors as you work toward graduation.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Over the past few decades, the cost of earning a college degree has soared. For the 2024-25 academic year, the average cost of attendance was roughly $30,000 at in-state public universities, $49,000 for public universities out of state, and $63,000 at private colleges, according to the College Board.

Those figures can feel overwhelming to many families. Fortunately, financial aid can make higher education far more affordable. Generally speaking, there are two main types: gift aid and self-help aid.

Gift aid is financial assistance that typically does not have to be paid back. This includes grants and scholarships, which may be awarded based on financial need or merit. Self-help aid, on the other hand, includes work-study opportunities and loans. It’s referred to as self-help because the student is responsible for taking action, either by working for wages or repaying borrowed funds.

Understanding the differences between these two types of aid can help you make smarter financial decisions for your education. Here, we’ll walk you through how each type of financial aid works, their pros and cons, and how to qualify.

What Is Gift Aid?

Gift aid refers to financial assistance awarded to students that generally does not require repayment. Gift aid can come from various sources — federal or state governments, colleges, private organizations, nonprofit foundations, and even employers.

Here’s a look at the two main types of gift aid:

Grants

Government agencies, private organizations, and colleges award grants to both undergraduate and graduate students, typically based on financial need. Award amounts, eligibility requirements, and application processes vary depending on the grant.

The largest federal grant program available to undergraduate students is the Pell Grant. For the 2025–26 award year, the maximum Federal Pell Grant is $7,395. Other federal grants include the TEACH Grant (for students who want to pursue a teaching career) and Federal Supplemental Educational Opportunity Grant (for undergraduate students with exceptional financial need).

There are also state-specific grants and institutional grants. You generally apply for grants by filling out the Free Application for Federal Student Aid (FAFSA®).

💡 Quick Tip: SoFi offers low fixed- or variable-interest rates. So you can get a private student loan that fits your budget.

Scholarships

There are thousands of scholarships available to help students pay for college. They are offered by schools, employers, individuals, private companies, nonprofits, communities, religious groups, and professional and social organizations.

Scholarships are often awarded based on merit, such as academic achievement, athletic ability, artistic talent, leadership qualities, or a specific field of study. Some scholarships are based on financial need. There are also scholarships that are geared toward particular groups, such as scholarships for women or students who come from military families.

You can find out about scholarships through your high school guidance counselor and the financial aid office at the school you plan to attend, as well as by using an online scholarship database. “Start researching scholarships early, because gathering the required documents and information to apply takes time, and early deadlines are common for large awards,” advises Brian Walsh, CFP® and Head of Advice & Planning at SoFi.

Pros and Cons of Gift Aid

There are both benefits and drawbacks to gift aid. Here are some to keep in mind:

Pros of Gift Aid

•  No repayment required: You typically don’t have to pay the money back, making it the most financially beneficial type of aid.

•  Reduces long-term debt: Every dollar of gift aid is one less dollar you might need to borrow.

•  Can cover a variety of costs: Depending on the award, funds may be used for tuition, fees, housing, books, and other education-related expenses.

•  Can be renewable: Many grants and scholarships can be renewed annually if you continue to meet the requirements.

Cons of Gift Aid

•  Competitive and limited: Scholarships often have strict eligibility requirements and can be highly competitive.

•  May not cover all expenses: Gift aid often doesn’t fully cover the total cost of attendance.

•  Performance requirements: Some awards require you to maintain a certain GPA, be enrolled full-time, or meet other ongoing conditions.

•  Possible impact on other aid: Receiving large amounts of gift aid can sometimes reduce eligibility for need-based aid.

What Is Self-Help Aid?

Self-help aid includes resources that require either repayment or active participation by the student. Here’s a look at the two main types of self-help aid.

Work-Study Program

The Federal Work-Study Program provides part-time jobs for undergraduate and graduate students with financial need, helping them to earn money they can put towards education expenses. These jobs are often located on campus, but they can also be with off-campus nonprofit organizations or public agencies. Work hours also tend to be flexible to accommodate class schedules.

When you get a work-study job, you’ll earn at least the current federal minimum wage. These earnings will be paid directly to you (unless you request otherwise) and can be used for any expenses, not just tuition.

Students apply for work-study through the FAFSA, which determines eligibility based on financial need. If you’re eligible, work-study will likely be included in your financial aid package.

While work-study can be a great way to earn money and gain work experience, it’s important to note that your earnings will depend on how many hours you can work, and the total award is capped at a certain amount per year.

Federal and Private Student Loans

Student loans are borrowed funds that must be repaid with interest. There are two main types of student loans: federal and private.

Federal student loans are offered by the U.S. Department of Education. These loans generally have lower interest rates and more flexible repayment options. You do not have to start repaying federal student loans until after you graduate, leave school, or change your enrollment status to less than half time.

The main types of federal student loans include:

•  Direct Subsidized Loans: Offered based on financial need, the government pays the interest on these loans while you’re in school at least half-time. There are annual (and total) limits on how much you can borrow.

•  Direct Unsubsidized Loans: These loans are not offered based on financial need, but interest will begin accruing from the moment the loan is disbursed. As with Direct Subsidized Loans, there are annual (and total) limits on how much you can borrow.

•  Direct PLUS Loans: These loans are available to parents of dependent undergraduates and graduate/professional students. Eligibility is based on a credit check, and you can currently borrow up to the full cost of attendance, minus other aid. (Note: Grad PLUS loans are being eliminated as of July 1, 2026.)

Private student loans are provided by banks, credit unions, and other private lenders. A credit check is required, so students typically need a cosigner unless they already have a strong credit history. Private student loans often have higher interest rates and fewer borrower protections than federal student loans. However, they come with higher borrowing limits, which can make them useful for bridging funding gaps if federal aid is insufficient.

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

Pros and Cons of Self-Help Aid

Here’s a look at the advantages and disadvantages of self-help aid:

Pros of Self-Help Aid

•   Accessible to many students: Student loans and work-study programs are widely available.

•   Builds responsibility: Managing work and loan repayment can help students develop time management and budgeting skills.

•   Flexible repayment for federal loans: Federal loans offer options like income-driven repayment, deferment, and loan forgiveness for qualifying borrowers.

•   Work experience: Work-study jobs can build your résumé and help with networking.

Cons of Self-Help Aid

•   Repayment obligation: Loans must be repaid with interest, which can significantly increase the total amount you owe.

•   Potential for debt burden: Borrowing too much can lead to long-term financial strain after graduation.

•   Limited earnings with work-study: Work-study wages are often modest and unlikely to cover major expenses.

•   Time commitment: Balancing work hours with academic responsibilities can be challenging.

Qualifying for Gift Aid and Self-Help Aid

Both gift aid and self-help aid are typically awarded through the college’s financial aid process, and most programs require you to submit the FAFSA each year.

Eligibility for gift aid is often based on:

•   Financial need: Many grants, such as the Pell Grant, are need-based.

•   Academic achievement: Scholarships may require a certain GPA, standardized test score, or other achievements.

•   Special criteria: Some awards are based on factors like major, athletic ability, community service, or demographic background.

How to qualify for self-help aid depends on the type of aid.

•   Work-Study: This is awarded based on financial need as determined by your FAFSA, but also depends on available funding at your school.

•   Federal loans: Students who complete the FAFSA typically qualify for some type of federal student loan, regardless of credit history or income.

•   Private loans: These loans require a credit check, and students without established credit may need a cosigner.

It’s important to meet all deadlines and supply accurate information to maximize your eligibility for any aid.

The Takeaway

When it comes to paying for college, both gift aid and self-help aid can play important roles. Gift aid — grants and scholarships — reduces the cost of college without adding debt, making it the ideal first choice. However, because gift aid alone often doesn’t cover the full cost of attendance, self-help aid like work-study and student loans can help bridge the gap.

A smart approach is to prioritize free money first, then use self-help aid to fill in any remaining needs. Borrow only what you truly need, and be mindful of repayment terms. By understanding your aid options and planning ahead, you can make college more affordable without sacrificing your financial future.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What is the difference between gift aid and self-help aid?

Gift aid is financial assistance for college that doesn’t need to be repaid, such as grants and scholarships. It’s often awarded based on financial need, academic merit, or special criteria. Self-help aid, on the other hand, requires the student to take action, either by repaying borrowed money (student loans) or working for wages (work-study programs). While gift aid directly reduces costs, self-help aid helps students manage expenses through debt or employment, so it typically requires more responsibility after receiving it.

Do parents who make $120,000 still qualify for FAFSA?

Yes, FAFSA isn’t itself an income-based approval system. It’s simply the application for federal student aid. While high-income households may not qualify for need-based federal grants like the Pell Grant, they can still access unsubsidized federal loans, work-study (in some cases), and merit-based scholarships awarded by colleges that use FAFSA information in their aid decisions.

What is self-help aid for college?

Self-help aid is financial assistance that requires the student to take an active role in covering education costs, either through repayment or work. The two main forms are student loans, which must be repaid with interest, and work-study programs, where students earn money by working party-time jobs, often on campus. Unlike gift aid, which is essentially free money, self-help aid doesn’t reduce tuition costs. Instead, it provides a way for students to manage their expenses.

What are two types of gift aid?

The two main types of gift aid are scholarships and grants. Scholarships are often awarded based on merit, such as academic achievement, athletic skill, leadership, or artistic talent, though some also consider financial need. Grants are typically need-based and come from the federal government, state programs, or institutions. Both scholarships and grants typically do not require repayments, making them highly desirable forms of aid.

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SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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If you’re a law school graduate, you likely have student loan debt — 71% of law school grads do, with an average law school debt of $130,000, according to the Education Data Initiative. Whether you’re concerned about being able to manage your monthly payments or you’d like to save money on interest, now is a good time to consider a new repayment plan.

Here, we’ll focus on how to pay off law school debt using two popular methods— refinancing and consolidating — and the pros and cons of each. Keep reading to learn which one may be right for your situation.

Law School Loan Refinance

Often, one of the main goals of refinancing law school loans is to reduce the amount of interest paid over the life of the loan. To do this, borrowers ideally qualify for a lower interest rate, which saves them money.

Another way a borrower can reduce interest is to shorten their loan term — the payment period of their refinance loan. However, that means their monthly payments could be considerably higher. In this instance, student loan refinancing for law school loans may work best for people earning a high salary and who have a good sense of job security.

One drawback to refinancing federal student loans is losing access to certain federal protections, such as loan forgiveness programs, income-driven repayment plans, and deferment options. That’s because when you refinance, you’re paying off one or more federal loans with a new, private loan.

Considering refinancing your law school loans? Before moving forward, make sure you won’t need those federal protections.

How to Refinance

As you explore the option of refinancing to see if it makes sense for you, it’s helpful to know what’s involved. The process of refinancing is pretty straightforward.

1. Check Your Credit History

Refinancing lenders set interest rates based on an applicant’s credit score. Requirements vary, but many lenders like to see a credit score of 670 or higher, which Equifax, one of the credit reporting agencies, considers “good.” Keep in mind the higher the score, the more likely a borrower is to get a better offer or interest rate. If your credit score is below 670, you may choose to take some time to build your credit before refinancing.

You can request your credit report for free from AnnualCreditReport.com. And you can find out your credit score for free from Experian, and also through some banks and lenders.

2. Explore Income-Driven Repayment Options

If your goal is to have more affordable payments, an income-driven repayment (IDR) plan may be a better option. These plans are designed to make student loan payments more manageable by basing monthly payments on the borrower’s discretionary income and family size. There are currently three IDR plans open to borrowers: Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and Pay As You Earn (PAYE).

While most of the current income-driven repayment plans will close in the coming years, IBR will remain open and available to current borrowers. With IBR, you’ll pay 10% of your discretionary income each month on a 20-year term if you first borrowed a loan after July 1, 2014. IBR forgives your remaining balance if you still owe money at the end of the term.

As for the two other IDR plans, PAYE sets your monthly payments at 10% of your discretionary income and extends your loan terms to 20 years. ICR sets your payments to 20% of your discretionary income and has a repayment term of 25 years. As noted, both of these plans are currently available to borrowers, but they are set to close and will not be accepting new enrollments on or after July 1, 2027. If you’re currently on PAYE or ICR, you have the option of switching to IBR.

For borrowers taking out their first law school loans on or after July 1, 2026, there will be only one repayment option that is similar to the current IDR plans: the Repayment Assistance Program (RAP). On RAP, payments range from 1% to 10% of a borrower’s adjusted gross income for up to 30 years. At that point, any remaining debt will be forgiven. If a borrower’s monthly payment doesn’t cover the interest owed, the government will cover the interest.

3. Run the Numbers in a Student Loan Refinancing Calculator

An online student loan refinancing calculator can help you determine what interest rate you’ll need to qualify for in order to make refinancing worth your while. It can also show you different loan term options. Generally, the longer the repayment timeline, the lower your monthly payments, but the more you’ll pay in interest over time. Shorter timelines mean higher payments and less interest paid.

4. Compare lenders

Go online to research the top lenders that offer student loan refinancing. Select a handful with strong reputations that also offer your target interest rate.

5. Prequalify to See Terms

Get prequalified to see what the loan terms are. (This requires only a soft credit check, which doesn’t affect your credit score.) When comparing terms, don’t only consider the lowest interest rate. Also look for any added benefits (such as unemployment protection), cash-back bonuses, and customer service ratings.

6. Select a Lender and Apply

Once you’ve settled on a lender, gather the documents you’ll need to make a formal application, such as W2 forms or pay stubs to verify your income.

Pros and Cons of Refinancing

Carefully review the pros and cons of refinancing student loans before you make a decision.

Consolidating Law School Loans

Debt consolidation involves taking multiple loans and combining them under one new loan with just one monthly payment. The main goal is to simplify your finances.

Borrowers who took out federal student loans as one of the ways to pay for law school may use a federal program called a Direct Loan Consolidation. Your new loan’s interest rate will be the weighted average of all the old student loans’ interest rates, rounded up to the nearest eighth of a percent. This means your interest rate might actually be slightly higher than the rate you were paying before consolidation on some of your student loans.

When you consolidate, you’ll also have the option to select a new repayment plan. Consolidation can also be a first step toward loan forgiveness, including law school loan forgiveness.

Private student loans cannot be consolidated using the federal consolidation program.

How to Consolidate

The Direct Loan Consolidation application process is available through the office of Federal Student Aid. Simply fill out the online application, or you can print out a paper version and mail it. It may help to first gather all of your loan records, accounts, and payment history as you work through the form. The process takes about 30 minutes total.

If you have a loan that will be paid off in a short amount of time, you might consider leaving it out of the consolidation. The same goes if you have already made qualifying payments toward forgiveness on certain loans.

Your first new payment will be due within two months of when your Direct Consolidation Loan is first paid out.

Pros and Cons of Consolidating

Just like refinancing, there are advantages and disadvantages of student loan consolidation.

What Are Some Solutions for Handling Law School Debt?

If you’re passionate about having a career in law, don’t let the cost of your education deter you from pursuing a rewarding profession.

Managing law school debt might seem overwhelming, but having a strategy can help you pay off your debt.

Here are several solutions to consider:

Making Interest-Only Payments While in School

Under the federal student loan deferment program, you aren’t required to make any payments while you’re in school. However, paying at least the amount of interest that is accruing on your loans each month could help keep your student debt from snowballing. And if you are able to pay more than just the interest, it’s a smart idea. The faster you pay down your loans, the less they’ll generally cost you over time.

Picking a Repayment Plan That Fits Your Budget

Once you graduate and start working, you’ll likely have a few financial priorities competing with your student loan repayment. In general, it can be a smart strategy to pay down law school debt as soon as you have a steady income. But paying down your loans too aggressively could leave you without enough savings. Building up an emergency fund can provide you with a buffer in case you have unforeseen expenses.

It can also make sense to start putting a percentage of your income toward a retirement fund to take advantage of potential long-term gains. You may want to factor your savings goals into your budget and pick a student loan repayment plan that fits your cash flow.

Putting any Extra Funds Toward Your Debt

Alternately, you can make paying down debt your top priority and put any extra income you have toward your highest-interest loans. Of course, if you choose this route, you may want to make sure you have a financial safety net in place first. This law school debt repayment strategy is typically called the avalanche method.

Essentially, with the avalanche method, you make additional payments on your highest-interest loans first while making regularly scheduled payments on all your loans. This helps reduce the amount of total interest you’re paying. And by paying your loans down early, you could save on interest payments over the years because the faster you pay off your student loans, the faster you can stop paying interest on your debt.

Cutting Back

You could also try to cut back on your monthly expenses and put that extra money toward your debt payments. While sticking to a budget can be challenging, it is one tool to help you stay on track with your spending.

Can you cut back on certain expenses each month? You may have to make a few sacrifices within reason. See what simple changes you can make to your budget — such as eliminating your gym membership and working out at home instead, or bringing lunch to work rather than buying it — to find extra money to put toward your law school debt. Paying more than the minimum monthly payment on your student loans can go a long way toward getting out of debt faster and saving on interest.

Making Your Loan Payments Cost Less

If you find yourself looking for a way to make your federal loan payments more manageable, an income-driven repayment plan (taking note of all the changes coming to these plans outlined above) can also lower your monthly payments by capping the amount you pay based on your discretionary income and household size.

With these plans, you may pay more interest over the life of your loans. But if your monthly payments are too high, an income-driven plan can bring them down.

Another option that can potentially reduce the cost of monthly payments is to refinance your student loans with a private lender. When you refinance, a private lender gives you one new loan to pay off your existing student loans (including your law school debt and the undergraduate debt you may still have). Your new loan will have new terms and a new (hopefully lower) interest rate.

When you opt for law and MBA refinancing, instead of paying on multiple student loans, you’ll only have to worry about paying off one loan. If you qualify for a lower interest rate and/or shorten your loan repayment term, you may pay less in interest over the life of the loan.

Just remember: Refinancing federal student loans with a private lender means you’ll no longer be able to take advantage of the benefits that come with federal loans, like forgiveness, deferment, and forbearance.

Employer Student Loan Repayment Assistance

With more borrowers struggling with student loan debt, more and more employers, including some law firms, offer student loan repayment assistance as a job perk.

For example, an employer offering this benefit may make monthly payments to your student loan servicer or lender on your behalf. There may be eligibility requirements for employees, including a certain length of service. Program specifics vary from employer to employer.

If you are in a public interest legal job, many civil legal aid organizations and other public interest employers offer loan repayment assistance to their employees.

Check with your employer to find out if they offer a loan repayment benefit program.

Long-Term Strategies for Managing Law School Debt

In addition to the options mentioned above for managing your debt, there are also some steps you can take to help reduce what you owe on your law school loans over the long term.

Pursuing Public Service Loan Forgiveness (PSLF)

If you’re a lawyer employed by a government or nonprofit organization, you may be eligible for the Public Student Loan Forgiveness (PSLF) program. PSLF forgives the remaining balance on your federal Direct Loans after you’ve made the equivalent of 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for an eligible employer.

Private student loans are not eligible for the PSLF program.

Leveraging Tax Deductions and Credits

There are tax deductions you may be eligible for that can help you with your student loan debt. For example, the student loan interest deduction allows borrowers to deduct the lesser of $2,500 or the amount of interest they paid on federal or private student loans for the year.

Eligibility requirements to claim the student loan interest tax deduction include: A borrower must be legally required to pay interest, they cannot be claimed as a dependent on someone else’s return, they must not be married and filing separately, and their modified adjusted gross income (MAGI) must be below the annual limit, which for 2025 is $100,000 for single filers and $200,000 for those who are married and filing jointly.

The Takeaway

Two popular ways of paying off law school debt are refinancing and consolidating. With refinancing, borrowers may qualify for a lower interest rate to save money and also pay off their loans faster if they choose a shorter loan term.

Direct Loan Consolidation is a federal program that helps borrowers simplify their finances by combining multiple federal loans into one — without losing federal protections. Those struggling with law school debt can explore both options to see which one is the best fit.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

What is the average law school debt upon graduation?

Law school borrowers graduate with an average law school debt of approximately $130,000, according to the Education Data Initiative. Seventy-one percent of law school students graduate with debt.

Can law school debt be discharged in bankruptcy?

Yes, law school debt (like any student debt) can be discharged in bankruptcy. While updated guidance from the Department of Education and the Justice Department has made it easier to discharge student loans in bankruptcy in recent years, the process is still quite challenging and complex. Bankruptcy can also have serious negative impacts to your credit and is often considered a last resort. If you are considering bankruptcy, it’s wise to consult an experienced bankruptcy attorney to make sure it is the right course of action for your situation.

Are there any forgiveness programs for law school debt?

Forgiveness programs for borrowers with law school debt include the Public Service Loan Forgiveness program for those who work in public interest jobs for a government agency or nonprofit. After 120 qualifying payments while working for an eligible employer, the remaining balance on your loans may be forgiven.

Those with law school debt may also be eligible for forgiveness through the Income-Based Repayment plan, which bases your monthly payments on your discretionary income and family size and forgives the remaining balance on your loans after 20 or more years of qualifying payments.

How does income affect loan repayment options for law graduates?

A borrower’s income can affect their eligibility for certain federal loan repayment options. For example, income-driven repayment plans base your payments on an individual’s discretionary income (along with family size). Public Service Loan Forgiveness is for those who work in public interest jobs for the government or nonprofits, which may pay less than jobs in the private sector.

Law graduates with higher incomes — and who don’t need federal benefits such as income-driven repayment and deferment — may want to consider student loan refinancing to potentially get a lower interest rate or pay off their loans in a shorter amount of time.

Is it better to refinance or consolidate law school loans?

Whether it’s better to refinance or consolidate law school loans depends on your specific goals and financial situation. Generally speaking, if you’d like to maintain access to federal benefits such as forgiveness and income-driven repayment, and also simplify your payments, consolidation may be an option for you. If you have a higher income and a strong credit score, and you don’t need federal benefits, refinancing might help you secure a lower interest rate, more favorable loan terms, and pay off your loans faster. You can evaluate both options to determine which is better for you.

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