Student loans — Congress again changing the rules!

Student loans often reach near $200,000 in today’s world. This is a far cry from only two decades ago (or when I graduated law school even earlier!). The consequences of this factoid are significant.

One example was given at a recent Managing Partners Diversity Conference that I facilitated. One of major law firms’ most pressing issue is retaining lawyers, and particularly lawyers of color. Law firms are learning that a large number of new lawyers stay until their student loans are repaid and they then look for other jobs with greater potential. With rising associate salaries, this indenture may become a bit shorter.

They may even look for jobs outside of the legal professsion.

More about our conference conclusions in later posts.

But today I learned about another curve in the road for those who have student loans, and I quote:

“The U.S. Department of Education has just announced two dramatic changes to the federal student loan consolidation and reconsolidation programs. By taking action now, the average attorney can save more than $30,000 over the life of his or her loans! Even if you have already consolidated, you can slash your interest rate by an additional 1.25% if you act immediately!

Starting next week, the government WILL NO LONGER PERMIT law school graduates to reconsolidate their loans if they have already consolidated. Additionally, starting next week, the government WILL NO LONGER PERMIT hundreds of thousands of other law school graduates to consolidate their student loans, in particular those who have borrowed certain popular types of federal loans.”

These changes may not be so little for those facing challenges with student loan repayments; “little” changes like this have an incredible ripple effect.

Categorized in: Cash Flow - Finances