There’s no one correct way to deal with student loan debt.

A common theme in many personal finance circles is that you should pay off your student loans as quickly as possible when you graduate from law school -- and that may be true for some. But not for all.

This is what can be so frustrating about personal finance guidance. It’s often written with “the majority of people” in mind, but that advice doesn’t make sense for the financial situations lawyers may find themselves in. The scrimping and saving plan to pay down $35,000 in student loans (the average graduate) looks very different when we’re talking about $145,000 in student loans (the average law school graduate).

Three Strategies For Paying Off Your Student Loans

So when figuring out which is the best path for you, you’ll want to take into account your own financial situation, your feelings about your debt, and your career and life trajectory.

Here’s three repayment strategies to consider:

1️⃣ REPAYMENT ASAP: If you know you're going to be repaying your student loans, then refinancing to a lower interest rate while paying more than the minimum is often your best bet. Right now, you can refinance any student loan (federal or private) at historically low interest rates if you have good credit. That can be tens of thousands of dollars saved and years shaved off the life of your loans. Before refinancing a federal loan, you want to speak to a professional because it is an IRREVERSIBLE decision that will take away all those nice federal loan benefits like forbearance, deferment, income driven repayment plans, and eligibility for forgiveness. But, if you expect to have a reliable and high income for the foreseeable future, then it's certainly something to consider.⠀

This strategy works best for folks whose total debt load is less than their annual income. (Just a guideline, not a rule). For more detailed information, check out my post When To Refinance Your Federal Loans.
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2️⃣ FORGIVENESS: If you have any potential of seeking forgiveness of your student loans, then you have a very different strategy. Ideally, you want to aim to pay as little as possible over the life of your loans and have the maximum amount forgiven. A few things to watch out for: (1) under certain programs the forgiven amount is treated as income, so be ready for a big tax bill that year; (2) forgiveness programs only apply to federal loans so you'll still need a strategy for any private loans you have; and (3) forgiveness programs have very strict requirements so you'll need to confirm you meet them and keep excellent records so you can support your forgiveness claim in the future. But, if you can get hundreds of thousands of dollars of loans forgiven for doing work that fills your soul, that's a pretty great deal!⁠⠀

This strategy works best for folks whose total debt load is more than their annual income. For more detailed information on the different forgiveness options for federal loans, check out my post on Student Loan Forgiveness Plans & Pitfalls.

3️⃣ REPAY YOUR WAY: And finally, if you're not sure what your future career holds and you're not sure you can afford to aggressively repay your loans right away, you may need a different plan. When I got out of law school, I was supporting two little twins on my own, so paying everything off quickly didn't feel like an option if I was simultaneously going to be concentrating on my retirement. And, I didn't qualify for Public Service Loan Forgiveness or Income Driven Payment Plan Forgiveness because I had the wrong kind of loans.

This strategy is often the best one for folks whose total debt load is around the same as their annual income. To see how I paid down over $200,000 in student loans and other creative strategies, check out my post on Repay Your Way: Tales From Trenches.

So what’s the best strategy?

Student loan debt, especially in the amounts many lawyers carry, is not a one-size-fits-all problem and we need more than a one-size-fits-all approach. If you're looking for some help addressing your own student loans, schedule a free phone consult with me and we'll start figuring it all out together.