Loan Payment Programs
There are many student loan repayment programs that are designed to help law school graduates who have borrowed significant amounts of debt while earning their degrees. These programs are all need based. Resources for these programs come from the University of Michigan Law School, the Federal Government, and in some instances, employers. This section of our Web site is designed to help bring these resources together to make your search easier.
The College Cost Reduction and Access Act of 2007 established, among other things, two new programs that will be of particular interest to graduates going into low paying and public interest jobs. Income Based Repayment (Section 203 of the Act) allows borrowers to pay back their federal loans on the basis of their income at the time of repayment. Loan Forgiveness (Section 401 of the Act) will forgive federal Direct loans after 120 payments and 10 years of full time employment in the public service sector. It is possible to take advantage of both of these programs at the same time, or to elect one or the other option. One option does not either preclude nor exclude another. Our CCRAA FAQ provides more details on these programs.
The Debt Management/Loan Forgiveness Program at the Law School is the most progressive in the country. It provides graduates with maximum flexibility to choose jobs from any law-related area (excluding judicial clerkships) including modest-paying public interest positions, while still maintaining a reasonable lifestyle and remaining current on outstanding loan obligations. Graduates whose combination of income and debt make them eligible receive assistance in meeting their loan obligations incurred during Law School and annually earn forgiveness of Law School loans. Consult the Financial Aid Office or visit the debt management FAQ for more details.
provides variable rate loan holders an opportunity to lock-in the current interest rate on their federal loans. Once federal loans have been consolidated, the rate cannot be adjusted again in the future. If it seems that most borrowers' loans are already set at a fixed interest rate, this is because most borrowers have already consolidated or have loans that were disbursed after July 1, 2006, which accrue interest at a 6.8% fixed rate. If you are an exception, or if you just want a better understanding of federal loan consolidation, please visit our consolidation FAQ for further information.
should not be confused with federal loan consolidation. There are ususally fees and in most cases the interest rate is variable. Fixed interest rate options are also available but at higher rates than what most borrowers are willing to pay. The rates that are offered to you will be based on your credit score. Your offers could vary and could also be very similar to what you are currently paying. Further information on private loan consolidation is available at www.finaid.org/loans/privateconsolidation.phtml. If you are considering private loan consolidation, proceed with caution and feel free to contact us with any questions you might have along the way.
Note: Many states, legal services programs and public defender offices have Loan Repayment Assistance Programs (LRAPs). The ABA maintains a list of state and employer LRAPs at www.abanet.org/legalservices/sclaid/lrap/home.html. You should check with your employer to see if there is an LRAP available to you.