Ok, so you’ve gone through law school, taken the bar exam, and now have a few months before you receive your bar exam results. You’re looking for a job and interviewing, but don’t have the money to make any payments.
Whatever you do, don’t ignore your student loans!
Get a jump on your student loans. Check out your campus Financial Aid department who can also assist you during the next 6 months. There are also a whole host of websites geared towards gaining the upper hand on your student loans. One of the best out there is the Federal Student Aid section of the Department of Education. They can help you find out which companies hold your student loans. We’ve included three tips on how to get started on managing your student loans.
How to Find Out Your Student Loan Information:
- Step 1: Go to Federal Student Aid – https://studentaid.ed.gov/npas/index.htm; login
- Step 2: Go to Your Federal Loan Summary
- Step 3: Select a loan for more detail (including who your servicer is)
- Step 4: Verify the information is accurate.
Federal Student Aid has a wealth of information available to you, make sure you use it. For example, they have a very handy checklist for individuals in law school, out of law school, or making payments. We’ve included the checklist in full here:
- Know when you have to start making payments
- Create a budget
- Consider loan consolidation
- Set a goal for repayment
- Select an affordable repayment plan
- Know whether you are (or will be eligible) for loan forgiveness based on your employer
Once you know who has your student loans, you’ll at the least be able to know who you will need to make payments to. Note, your loans may be sold off to other loan servicers throughout the life of the loan, but you will always be able to find out who holds your loan here (It’s happened to me 3-4 times).
Understand what types of student loans you have
Student loans come in various types, but generally fall into two categories: Private Loans or Public Loans.
Federal Loans are those that are made directly by the Federal Government to students. Banks, and other institutions are not part of this program (although these loans will be serviced by private institutions who buy the rights to the loan). Most of your loans if you went to law school will be a version of a public loan. These loans are highly regulated by congress, which includes the interest rate.
Private loans are those that are issued by a bank, or 3rd party company. These will include any bar loans that were taken out. The terms of these loans can vary widely and include things like variable interest rates. Note, Federal and Private loans cannot be consolidated together, however, you can consolidate them with their corresponding type.
Understand what type of payment plans are available to you
Depending on your situation, there are quite a few options, but generally they are broken down into the following types. The Department of Education has a great in-depth guide to the types of loans along with their repayment options here.
- Standard Repayment
- Graduated Repayment
- Extended Repayment
Income-Driven Repayment Programs:
- Pay as you Earn (PAYE)
- Revised Pay as You Earn (REPAYE)
- Income-Based Repayment (IBR)
- Income Contingent Repayment Plan (ICR)
The vast difference between the two programs, is that Traditional Repayment options form out a set schedule based on the interest and principal of the loan, with the goal of having the loan paid off at the end of the term. Income-Driven repayment plans use your level of income each year to formulate the payment you should make (In some rare cases, they even allow you to make $0 payments). To read more about Income-Driven repayment programs, check out the breakdown here.
When you are done understanding where your loans are being held, along with your payment schedule, use a free financial tool like Mint.com to assist you in keeping track of your interest and outstanding balance.