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While medical doctors have high earning potential, the first few years of a doctor’s career — known as residency — tend to be defined by long hours and relatively low pay. So if you’ve got a medical career ahead of you — and medical school student loans to pay off — what sort of financial life can you expect? In this article we’ll explore the average pay for medical residents, and what they can do to manage their finances during this time.

How Much Do Medical Residents Make?

So, how much do doctors make during residency? According to the Association of American Medical Colleges, the average medical resident salary was $60,373 as of July 2022 . After federal and state taxes (assuming an average tax rate of 8.9%), this leaves the average medical school resident with $3,797.73 to spend each month.

Medical residents are known to work very long hours. The Accreditation Council for Graduate Medical Education requires hospitals to ensure that residents work no more than 80 hours a week. If you do the math, an annual salary of $60,000 breaks down to just over $14 an hour if a resident puts in a full 80 hours a week.

Making that money stretch can be a challenge — especially in high cost-of-living areas. To help, here are five tips for getting by (and even thriving) while living on an average resident salary.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

How to Get by on a Medical Resident’s Salary

1. Make a Simple Budget

The average resident has little time to keep track of their expenses, but building a simple budget could be the difference between making it work and ending up short. Your first step should be to make a list of all “necessary” spending, such as rent, utilities, transportation, and food.

Next you’ll want to look how much you bring home each month, including your resident’s salary and any additional income from your partner or family support. Then look at how much money you have left over. That’s how much you have to spend on “extras” each month, like dining out, travel, or clothing. You might decide to set spending limits for each category (for example, $100 for eating out) or monitor your spending as the month progresses. Or, you can do both.

2. Consider Personal Preferences and Trade-Offs

A budget can feel like a hassle, but if you set it up right, it can also be freeing. By knowing exactly how much you can spend, you can then decide what’s important for you to prioritize and what you don’t mind cutting out.

Maybe you’ll decide that you want to cut cable, but you don’t want to stop meeting up with friends at your local wine bar. Or perhaps you’ll give up eating out so you can spend more on rent. Making a budget is just analyzing each trade-off. Ask yourself, “Do I want this, or something else?”

3. Focus on Fixed Costs

One substantial way you can make an impact on your budget is by making “big wins” on fixed costs, such as housing, car payments, or utilities. For example, lowering a bill by $20 each month is going to have a bigger effect than saving a few dollars on small purchases. Looking at your own fixed spending, where could you ask for better rates? Or cut back entirely?

While you’re at it, look at your subscription services and other memberships. Though not often considered a “fixed cost,” they can add up quickly to become a significant expense. When you put them on autopay, it’s easy to forget about them and miss the chance to cancel them each month or year. Take time to go through your credit card statement to make sure you’re not paying for a service that you’re not able to use because you’re so busy. Try to eliminate one or two for automatic monthly savings.

4. Share a Living Space

When you’re trying to save money, there’s usually no financial win that’s bigger than saving on your housing costs. To do this, you can move into a more affordable place, live with roommates, or rent out a room in your place. Not only can a roommate help you save on rent, but on utilities like water, electric, and cable.

Some folks don’t like the idea of having roommates because they lose some privacy. But if you’re a busy resident who’s not home very much and is trying to eke by on a small salary, it can be a great way to save money.

5. Choose Less Expensive Transportation

Transportation may be your second biggest expense after housing, especially if you’ve got car payments. But even if you’ve already paid off the vehicle, you’ll need to cover the cost of car insurance, as well as maintenance and sometimes parking. It can add up.

If you’re living in an area with good public transportation, or you’re able to live within walking distance of the hospital, you might want to get rid of your car to save money. In some areas, Uber or Lyft offer a flat-rate, monthly pass option that can be less expensive than owning and maintaining a car.

If you’re not ready to sell your car quite yet, simply try using it less. Even this small act may save you money each month. For example, if you’re spending $120 per month on gas but could ride public transportation for $30 per month, you may save over $1,000 on transportation in a year.

It might be a difficult transition at first, but you may find that you appreciate the time you aren’t behind the wheel. Another potential way to save money on transportation is by shopping around for car insurance. If you haven’t done so in the last several years, it could be well worth it — especially if you have a good driving record.

6. Cook at Home

You’re likely overworked and want to rest during your off hours, and it’s hard to find the time and energy to cook. But eating out is expensive. While it may be unreasonable to think that a medical resident will cook every meal, it may be worth taking a few hours each week to make a batch of meals that you can eat throughout the week. Preparing meals and eating at home could potentially save residents hundreds of dollars a month.

Another Option: Refinance Medical School Loans

Like most people who attended medical school, there’s a very likely chance you took out student loans. Managing these loans while you’re living on an average resident salary may be important for your financial success. It is important to understand your loan repayment options as a medical resident. One of the first decisions you may want to make is whether you want your loans to go into forbearance or to make payments on your loans during residency.

Student loan forbearance may seem like an ideal option for a person on a medical resident salary, but that might not always be the case: Federal medical school student loans accrue interest during that time, and that interest is added to your balance at the end of your forbearance period. This is called compounding, or capitalization, and means that you’re paying interest on top of interest.

You may want to consider refinancing your medical resident student loans with a company like SoFi that offers programs designed for medical school residents. Refinancing is the process of paying off one loan (or many loans) with another, generally to lower your overall interest rate or to change the terms of your loan.

Refinancing student loans won’t be for everyone, as you will lose access to federal loan programs such as Public Service Loan Forgiveness (PSLF). SoFi’s medical school loan refinancing offers monthly payments as low as $100 per month during residency, while no interest capitalizes during that period.

Additionally, with SoFi, you might be able to lower your overall interest rate as well, which could potentially save you thousands of dollars over the life of your loan. Learn more about SoFi’s medical resident loan refinancing rates and terms.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

There are several options for teachers seeking to reduce their federal student loan debt, including loan forgiveness and cancellation. For example, teachers may qualify for the Teacher Loan Forgiveness program, Public Service Loan Forgiveness program (PSLF), and/or the Perkins Loan Cancellation for Teachers. Also, there are state and local loan forgiveness, cancellation, and grant programs. We’ll discuss these options in more depth below.

Teacher Loan Forgiveness Program

Amount forgiven:

Up to $5,000 or up to $17,500, depending on the subject area you teach.

Which loans might qualify:

Direct (or Stafford) Loans, both subsidized and unsubsidized, and FFEL Program Loans. For borrowers with Direct Consolidation Loans, the outstanding portion of the consolidation loan that repaid an eligible Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized Federal Stafford Loan, or Unsubsidized Federal Stafford Loan may qualify as well. Learn more here .

Qualifications:

•   Teaching at a low-income school; you can search for a school in this directory

•   Teaching for five complete and consecutive academic years

•   Existing student loans cannot be in default

Details:

The maximum amount that can be forgiven under this program depends on the role and subject the borrower teaches. Teachers are eligible to receive up to $17,500, if they are considered “highly qualified” as defined by the program and are full-time math or science teachers in an eligible school. Teachers working in special education that meet specific requirements may also qualify to have $17,500 forgiven.

Teachers are eligible to receive up to $5,000 if they are a “highly qualified” full-time elementary teacher or a full-time secondary school teacher in all other subject areas.

What does “highly qualified” mean? That the borrower has a bachelor’s degree, full state certification as a teacher, and their certification or licensure requirements were not waived on an emergency, temporary, or provisional basis.

If you apply for Teacher Loan Forgiveness, you can’t also apply for Public Service Loan Forgiveness (PSLF) for the same period. So if you receive Teacher Loan Forgiveness, the five-year period of service that supported your eligibility will not count toward PSLF.

How to apply:

Teachers are not eligible to apply until they have completed the five years of service. After completing this requirement, borrowers can fill out the Teacher Loan Forgiveness Application. (It may be helpful to get acquainted with the application now, because it clearly explains who qualifies for what amount of forgiveness.)


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

Public Service Loan Forgiveness Program

Amount forgiven:

Up to 100% of the remaining loan balance.

Which loans qualify:

Direct Loans, also known as Stafford Loans, and Direct Consolidation Loans.

Qualifications:

•   Must be in certain public sector jobs and employed full-time

•   Must have made 120 qualifying payments (this takes 10 years if the borrower makes them consecutively)

•   Payments must be made as part of an income-driven repayment plan

•   Existing student loans cannot be in default

Details:

Unlike with the Teacher Loan Forgiveness Application , teachers don’t need to teach for a low-income school or within a particular academic subject when applying for the Public Service Loan Forgiveness Program (PSLF).

To be eligible for this program, the borrower must be employed by the local, state, or federal government, or work for certain nonprofit organizations that provide a qualifying public service — such as general education services.

To qualify for PSLF, borrowers must be on an income-driven repayment plan. With an income-driven repayment plan , borrowers are only required to pay a certain percentage (between 10 and 20%) of their discretionary income toward their monthly student loan payments.

Recommended: A Look into the Public Service Loan Forgiveness Program

Sometimes, there is confusion about whether forgiven loan balances are taxed. If a borrower meets the qualifications for PSLF, the forgiven amount will not be taxed. For borrowers who are on an income-driven repayment plan and expect their loans to be forgiven after 20 or 25 years (but are not participating in the PSLF program), it is possible that the forgiven amount will be taxed as income. To understand more about these tax nuances, consult a licensed tax advisor.

To qualify for PSLF, the 120 qualifying monthly payments do not need to be consecutive. For example, if a borrower has a period of employment with a non-qualifying employer, they will not lose credit for any prior qualifying payments made with a PSLF-approved employer.

While it is possible to partake in both the Teacher Loan Forgiveness Program and PSLF, it’s not possible to do so concurrently. Your five years of service under the Teacher Loan Forgiveness Program does not count toward your qualification for PSLF — you will have to qualify for PSLF under a different period of teaching service. Furthermore, payments made when working toward the Teacher Loan Cancellation Program will not qualify for PSLF — you will have to make 120 additional qualifying payments for the PSLF program.

To apply:

Borrowers may want to fill out the Public Service Loan Forgiveness (PSLF) form with the PSLF Help Tool to be certain that their employment qualifies for the program. Once received by the Department of Education, the borrower will receive a response telling them whether or not they qualify, and if they don’t, what needs to be done to qualify. If the borrower does qualify, the DoE will tell them how many qualifying payments have already been made and how many need to be made.

Every time a borrower changes jobs, they’ll need to send in an updated Employment Certification form. Otherwise, borrowers will be required to submit an Employment Certification form for each of their previous employers when they apply for forgiveness.

Once a borrower has received notification that their PSLF Employment Certification has been approved, they’ll need to continue making those on-time student loan payments. After making 120 payments, they can apply for forgiveness.

Perkins Loans Cancellation for Teachers

Amount forgiven:

Up to 100% of the loan, done in increments over a five-year period.

Which loans qualify:

Federal Perkins Loans (The Federal Perkins Loan program expired in September 2017, but loans disbursed through the program may still qualify.)

Qualifications:

A minimum one year of teaching and at least one of the following requirements:

•   Teaching at a low-income school; search for a school in this directory

•   Teaching science, math, foreign languages, bilingual studies, or special education

•   Teaching a subject that has a shortage of qualified teachers in your state

•   Teaching in a school operated by the Bureau of Indian Affairs or on a qualifying Indian reservation

Details:

Those who are eligible for the Perkins Loans Cancellation for Teachers may have all of their Perkins Loans forgiven. Cancellation happens in stair-step increments over five years. Here’s how the incremental forgiveness system works:

•   15% of the original Perkins loan balance is canceled per year for the first and second years of service

•   20% is canceled in both the third and fourth years

•   30% is canceled in the fifth year

In order to qualify for this program, an employee must work directly for the school system — qualifying is entirely contingent on position duties.

To apply:

Each school has its own process, so borrowers should contact the school that administered the Perkins Loan.

State and Local Student Loan Forgiveness Programs

Some states offer loan forgiveness programs for teachers, especially for those who work in subject areas in high demand. One place to start your search for a state and local teacher loan forgiveness program is through this database created by the American Federation of Teachers.

What About My Other Student Loans?

So far, all of the programs we’ve discussed only apply to federal loans. What can be done if a borrower has other loans (like private loans) that don’t qualify for federal teacher loan forgiveness?

One option is to look into refinancing the student loans. When a borrower refinances a student loan or multiple loans, they are essentially paying those loans off with a new loan from a new lender. Ideally, the new loan has a more competitive interest rate than the existing loan(s), which could potentially save the borrower money over the life of the loan.

Borrowers can refinance both private and federal student loans, so it is an option for teachers who don’t have loans that qualify for one of the federal forgiveness or cancellation programs.

If you refinance your federal loans, you will lose access to federal loan benefits such as access to the PSLF program and the Teacher Loan Cancellation Program. There’s always the option to refinance your private loans while keeping your federal loans separate.

The Takeaway

Teachers with federal student loans may be able to pursue loan forgiveness through programs like Teacher Loan Forgiveness or Public Service Loan Forgiveness programs. Borrowers who hold Perkins Loans may also be able to pursue Perkins Loan Cancellation for Teachers. If you also have private loans, refinancing may be a good option, though as stated above, refinancing federal loans disqualifies borrowers from government forgiveness programs.

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.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

After more than three years, federal student loan payments have restarted. A lot of new changes have been enacted, such as changes to income-driven repayment (IDR) and loan forgiveness, and some actions are still in the pipeline.

Here’s what’s happened so far – and what’s still to come – for student loan borrowers.

Summer 2023: New SAVE Plan Revealed

What Happened

The Department of Education announced changes to its federal income-driven repayment plans. The Saving on a Valuable Education (SAVE) plan was introduced, replacing the current Revised Pay As You Earn (REPAYE) plan.

Partial benefits under the new repayment plan went into effect before the payment pause ended. This includes benefits that dramatically lower your monthly payment, subsidize any interest that isn’t covered by your payment, and exclude your spouse’s income for your payment calculation.

If you’re already enrolled in REPAYE, your plan should have been automatically enrolled in the new SAVE plan.

Who’s Impacted (and Who Isn’t)

Borrowers who are already under the REPAYE plan, or are interested in getting on the SAVE plan. (If you’d like to be enrolled in SAVE, you can enroll now at StudentAid.gov.)

This doesn’t affect borrowers who are on an alternative repayment plan, or those on an IDR plan who don’t wish to enroll in SAVE.

September 1, 2023: Interest Accrual Resumes

What Happened

The COVID-19 administrative pause officially ended on August 31, and interest charges on federal loans resumed on September 1.

Also, you may have received your student loan bill in September (including the payment amount and its due date), as bills were set to be sent at least 21 days before your payment is due.

Who’s Impacted (and Who Isn’t)

All borrowers with federal student loans that were included in the interest rate pause.

This date didn’t affect student loans that were ineligible for the payment and interest pause. That includes private loans and Federal Perkins Loans and Federal Family Education Loans (FFEL) that weren’t owned by the Department of Education.

One thing to keep in mind: During the payment pause, some companies left the federal loan servicing business while new ones were brought into the fold. If you haven’t already, confirm whether your federal loan servicer has changed by logging into your StudentAid.gov account or calling 1 (800) 433-3243 for assistance.

After confirming who your servicer is, create an online account on the servicer’s website to manage your repayment moving forward.

October 1, 2023: First Payments Due

What Happened

Your first payment is due in October, based on the due date stated on your loan bill. However, borrowers who graduated after March 1, 2023 will receive a full six-month grace period before their first payment is due. That means that, for instance, undergraduates who graduated in May 2023 will begin making payments in December 2023.

Who’s Impacted (and Who Isn’t)

Borrowers who left or graduated school before March 1, 2023, and who have an unpaid federal student loan balance. This doesn’t apply to federal borrowers who had non-government held Perkins or FFELs which weren’t included in the emergency forbearance action.

What You Need to Do to Prepare

If you haven’t received your bill yet, log in to your servicer’s website to access your loan to review your payment amount and due date. If you were previously enrolled in autopay before the pause, you’ll need to re-enroll in automatic payments through your loan servicer’s site.

💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.

April 30, 2024: Last Day to Consolidate for IDR Adjustment

What Happened

This is the deadline to consolidate non-qualifying loans into a Direct Consolidation Loan to claim the one-time, temporary IDR Account Adjustment. Claiming this adjustment helps eligible borrowers get credit for past non-qualifying payments.

Borrowers who consolidate their non-qualifying loans by this time can accelerate their track toward loan forgiveness. Generally, if after the adjustment is applied, you made more qualifying payments than needed for loan forgiveness, you’ll have the amount refunded.

Who’s Impacted (and Who Isn’t)

Borrowers who are or were enrolled in an IDR plan, as well as borrowers who are participating in Public Service Loan Forgiveness (PSLF). Also, borrowers aren’t on an IDR plan yet, but want to enroll in one and have government-held Direct or FFEL Loans.

What You Need to Do to Prepare

Don’t wait until the last minute to consolidate your non-qualifying loans. Contact your federal student loan servicer ASAP to get the process started. If your non-qualifying loan is in default, you can still access this adjustment by getting your loan out of default (for instance, through Fresh Start ).

July 2024: Additional SAVE Plan Benefits Available

What Happened

The second wave of SAVE plan benefits started in July 2024. Some key benefits are even lower monthly payments, and an accelerated track toward loan forgiveness.

Borrowers who are only repaying undergraduate loans on the SAVE plan had their monthly payment reduced from 10% of their discretionary income to only 5%. Those with a mix of undergraduate and graduate loans under SAVE now pay a weighted average between 5% to 10% of their discretionary income.

Additionally, borrowers whose original principal loan balance was $12,000 or less will have any remaining loan balance forgiven after making 10 years of repayment — a much faster timeline than SAVE’s usual 20- or 25-year forgiveness period.

Who’s Impacted (and Who Isn’t)

Borrowers who are enrolled in the SAVE plan, or are interested in getting on the SAVE plan. This doesn’t affect borrowers who are on an alternative repayment plan, or those on an IDR plan who don’t wish to enroll in SAVE.

What You Need to Do to Prepare

Make sure your contact information is up to date with your loan servicer so you receive announcements as this date nears. If you want to take advantage of these benefits, but aren’t enrolled in an IDR plan, submit an IDR request to your servicer to see if you qualify for SAVE.

September 30, 2024: End of “On-Ramp” Transition

What’s Happening

The Department of Education is enacting a 12-month “on-ramp” phase from October 1, 2023 to September 30, 2024. During this time, loan accounts that don’t receive a payment won’t be penalized, and although interest will accrue, it won’t capitalize after the on-ramp expires. However, after this date, student loans that are past due on a payment will be reported to the credit bureaus, marked as delinquent or in default, and the account might be sent to debt collection.

Who’s Impacted (and Who Isn’t)

Student loan borrowers who have not made a payment since the restart of federal student loan interest and payments, and borrowers who are struggling with their student loan payment.

What You Need to Do to Prepare

No action is necessary to participate in the on-ramp. However, reach out to your loan servicer if you can’t meet your loan obligation before this date to learn about your options to avoid severe consequences.

For example, you might be able to secure a lower payment under an IDR plan or qualify for temporary deferment or forbearance.

The Takeaway

In the last few years, there have been many changes to help borrowers with federal student loan repayment. However, the many different deadlines and moving parts can make staying on top of your to-do list challenging.

Keeping these dates in your calendar can help you track, and take advantage of, valuable federal programs.

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

Are student loan payments going to start?

Yes. Interest on federal student loans that were paused during the COVID-19 administrative forbearance will resume on September 1, 2023, and payments will be due in October 2023.

Is Biden going to pay student loan debt?

Certain federal student loan borrowers might have all or a portion of their remaining unpaid student debt canceled. A new administrative action is being put into place to recalculate payment credit toward loan forgiveness for 804,000 borrowers who are enrolled in an income-driven repayment plan.

The administration’s plans to cancel up to $20,000 of federal student loans for eligible borrowers, however, was struck down by the Supreme Court. No further forgiveness actions have been announced as of this writing.

How do I find out if my student loans have been forgiven?

If you received loan forgiveness as a result of recent changes in the federal student loan system, you’ll receive a notice from your loan servicer or the Department of Education.

This might be sent via mail or electronically. Ensure that you can log in to your StudentAid.gov or servicer’s website, and your mailing address and email are correct.

Photo credit: iStock/FatCamera

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

In June 2023, the Supreme Court announced its decision to reject the Biden-Harris Administration’s Student Debt Relief Program on the grounds that it required Congressional approval. Additionally, the debt ceiling bill officially ended the payment pause, requiring interest accrual to resume Sept. 1 and payments to resume Oct 1.

Fortunately, there are still some forgiveness and repayment options available to law school debt holders. Here’s what’s available.

Loan Repayment Assistance Programs

A Loan Repayment Assistance Program (LRAP) is one type of financial assistance provided to law school graduates in government and lower paying legal fields. LRAPs may be run by the state, state bar, federal government, or individual law schools.

In many cases, funds are provided via a forgivable loan that is canceled when the recipient’s service obligation is completed. These loans are structured in a way that they are not taxable income, unlike grants. If you receive loan repayment assistance, it’s important to find out if your funds are taxable. (Learn how to find your student loan tax form.)

An LRAP shouldn’t be confused with the repayment plan borrowers agree to when they first sign for their loans. Most people with federal student loans are on the Standard Repayment Plan, meaning they pay a fixed amount every month for up to 10 years.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

5 Law School Loan Forgiveness and Repayment Programs

Below are the five most widely used law school student loan forgiveness and repayment programs. If you’re already receiving one or more of these benefits, remember that you may have to reapply each year.

You may apply to as many law school debt forgiveness programs as you qualify for. In some cases, you may even accept more than one grant or loan at a time, but check the fine print on your program applications.

Recommended: Can Private Student Loans Be Forgiven?

Public Service Loan Forgiveness (PSLF)

Best for: Lawyers who plan to work for the government or in the nonprofit sector.

The Public Service Loan Forgiveness program may be the most well-known option in terms of loan forgiveness for lawyers. The premise is simple: If you work in a qualifying public service field, then the remainder of your direct student loans can be forgiven after you make 120 consecutive qualifying monthly payments over 10 years. However, many people attempting to meet those requirements can find the process confusing and difficult.

The first step to qualifying for public service loan forgiveness is filling out the employment certification form.

In order to earn loan forgiveness, you must work for a qualifying government organization or tax-exempt non-profit organization, and you must be enrolled in a qualifying repayment plan — generally a federal income-driven repayment plan.

The next step is to make your monthly loan payments promptly. If you meet all those requirements and payments, then at the end of 10 years, the remainder of your debt could be forgiven.

Obviously, if you put all that time and money in and then it doesn’t pay off, it could cost you. Since the original Public Service Loan Forgiveness program went into effect in 2007, the first students eligible were set to have their loans discharged in October 2017.

However, the PSLF program was overhauled in Oct. 2021, and since then, $42 billion was approved for more than 615,000 borrowers. Additionally, borrowers who are still awaiting approval can now track their application’s status under the My Activity section of their StudentAid.gov account. This recently implemented feature can allow borrowers to see if their employers digitally signed their PSLF form and view when it was actually processed

Income-driven Repayment Plans (IDR)

Best for: Lawyers with low incomes.

An income-driven repayment plan sets your monthly student loan payment based on your income and family size. Most federal student loans are eligible for at least one income-driven repayment plan. If your income is low enough, your payment could be $0 per month. There are four income-driven repayment plans:

•   Saving on a Valuable Education (SAVE Plan)

•   Pay As You Earn Repayment Plan (PAYE Plan)

•   Income-Based Repayment Plan (IBR Plan)

•   Income-Contingent Repayment Plan (ICR Plan)

The Federal Student Aid website breaks down the eligibility for each program. If you have Parent PLUS loans, you must consolidate your loans to become eligible for an IDR plan.

Recommended: How To Avoid Student Loan Forgiveness Scams

State Loan Repayment Assistance Programs

Best for: Lawyers who qualify for their state’s program.

Most states have LRAPs providing a type of law school loan forgiveness if you work in that state — often in the public sector, for a qualifying nonprofit, or in underserved communities. Repayment assistance varies, so check the guidelines for your state. For instance, the District of Columbia offers one-year interest-free forgivable loans up to $12,000; in New York, forgivable loans of up to $10,000 per year are available for a maximum of three years or $30,000.

Law School-Based Loan Repayment Assistance Programs

Best for: Lawyers with low incomes or those who work in high-need areas.

Many schools offer their own LRAPs for lawyers. Applicants for the 2023 funding cycle must have had at least $75,000 in eligible law school loans and a maximum income of $62,500 in most states.

The specifics of the loan repayment assistance programs vary from school to school, so you’ll have to check with your law school’s financial aid office. Here is a comprehensive list of law schools with LRAPs.

Up to $5,600 each is awarded to each of around 125 attorneys annually through an application process that opens in August.

Department of Justice Attorney Student Loan Repayment Program

Best for: Lawyers who work for the Department of Justice.

The Department of Justice Attorney Student Loan Repayment program is a type of law school loan forgiveness aimed at encouraging newly minted attorneys to work for the Department of Justice. Applications for the program open in the spring (typically on March 1).

In return, you can receive up to $6,000 per year (for a maximum of $60,000 total) paid toward your student loans. It’s not exactly law school loan forgiveness, but it is law school loan repayment.

The fine print: You must commit to three years of full-time employment for the Department of Justice, and if you don’t fulfill your commitment then you could be on the hook for any loan payments made on your behalf. You must have at least $10,000 in eligible student loans, which includes Stafford Loans, PLUS loans, Perkins Loans, and a few other types of student loans. (All criteria information is available on the Department of Justice’s program website.)

Payments are made directly to the loan servicer and all loan repayments made by the Department of Justice ASLRP are considered taxable income. It’s also a highly competitive program, but if you’re looking at a career working for the DOJ, then it could be a great way to get your start and wipe out some debt.

The Takeaway

Law school loan forgiveness sounds great, but it can cost you money in the long run if you end up paying higher interest rates or don’t pursue the career you want in the hope of securing loan forgiveness. Consolidating federal student loans is an option, but it can be complicated. Through the Direct Loan Consolidation program, your new interest rate is the weighted average of your existing loans’ rates.

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.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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When it comes time to repay your federal student loans, you have to decide what kind of payment plan you want to be on. All borrowers qualify for the Standard Repayment Plan, which ensures you pay off your loan within 10 years.

But that’s not the only option available, and it might not be the best choice for your financial needs.

By learning more about the Standard Repayment Plan, you can decide if it’s the right choice for you or you want to go a different route.

What Is the Standard Repayment Plan for Student Loans?

Upon graduation from college or if you drop below half-time enrollment, you have a six-month grace period for a Direct Loan program loan (nine months for a federal Perkins Loan) when you don’t have to make payments.

Once that ends, you’ll begin the Standard Repayment Plan, the default for all federal student loan borrowers once they have left school. That’s unless you choose a different plan – perhaps one where you make lower monthly payments, extend your repayment period, or both.

Let’s start by looking at the standard plan, which sets your monthly payments at a certain amount so that you will have your loans paid off within 10 years.

Recommended: Getting to Know Your Student Loan Repayment Options

Standard Repayment Plan Eligibility

Unlike some other federal student loan repayment plans, all borrowers are eligible for the standard plan.

Loans That Are Eligible

Federal Family Education Loan (FFEL) Program loans and Direct Loans qualify for the Standard Repayment Plan. They include:

•   Direct Subsidized and Unsubsidized Loans

•   Direct PLUS Loans

•   Direct Consolidation Loans

•   FFEL consolidation loans

•   FFEL PLUS loans

Keep in mind that you will only be able to use the Standard Repayment Plan if you have federal student loans, not private student loans.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

How Does the Standard Repayment Plan Work?

With the Standard Repayment Plan, borrowers pay fixed monthly payments for up to 10 years. Because the plan offers a relatively short repayment period and monthly payments don’t change, you will save more money in interest than longer repayment plans.

For example, if you just graduated with the average student loan debt of $37,718 at 5.8% interest, you’ll pay $12,078.27 in total interest. Expanding to 25 years at the same rate will lower your monthly payment by almost half, but you’ll end up paying nearly $33,810.20 in total interest.

There’s a variation on the 10-year plan: the graduated repayment plan. Under this plan, repayments start low, and every two years, your payments increase. This is a good option for recent graduates who may have lower starting salaries but expect to see their pay increase substantially over 10 years.

Recommended: Student Loan Payment Calculator

Payments on the Standard Plan

What may make the Standard Repayment Plan less appealing to some borrowers is that payments will likely be higher than on any other federal repayment plan because of the short loan term.

For people with a large amount of student debt or high interest rates, the monthly payments can be daunting or unmanageable. You might face sticker shock when you receive your first bill after your grace period, so don’t let it come as a surprise.

To determine if the Standard Repayment Plan is a good option for you, you can use the federal Loan Simulator to calculate student loan payments. Or contact your loan servicer before your first payment is due to see how much you will owe each month.

Changing Your Repayment Schedule

If you want to change your repayment schedule or plan, call your loan servicer and see what they can do.

You’ll need to contact each loan servicer if you took out more than one loan and want to change repayment schedules.

You can change your federal student loan repayment plan at any time, free of charge.

What Are the Pros and Cons of the Standard Repayment Plan?

There are upsides and downsides to weigh when considering the Standard Repayment Plan.

Pros

You will pay off your loans in less time than you would with other types of federal repayment plans, which may allow you to set aside money for things like purchasing a home.

You’ll save money on interest, since you’re paying your loan back faster than you would on other federal plans.

The plan offers predictability. Payments are the same amount every month.

You don’t need to recertify your loan every year to prove your eligibility.

Cons

Your monthly payments will probably be higher than payments made under other student loan repayment plans with extended repayment periods.

Your monthly payments are based on the number of years it will take you to repay the loan, not on how much you can afford, as with income-based repayment plans.

With some federal income-driven repayment plans, like SAVE or PAYE, your remaining balance will be forgiven after you make a certain number of eligible payments over 20 to 25 years.

The Takeaway

The federal Standard Repayment Plan of 10 years could be right for you if you’re able to keep up with payments and you want to pay off your debt quickly.

Another option is to refinance your student loans to improve your interest rate and possibly change your loan term. Just realize that refinancing federal student loans into a private student loan means giving up federal benefits like income-driven repayment and loan forgiveness.

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.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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