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I Am a Lawyer With Sallie Mae Loan Debt. Help! – Scott

Written by Steve Rhode

“Dear Steve,

Public interest lawyer

250k in student debt

6k in credit card debt

8k in private credit loan from sallie mae

I have a Sallie Mae loan through their private credit department. I used this loan for living expenses while I took the New York bar exam this past summer.

Is this the type of loan that you wrote about in several articles as being dischargeable?


Dear Scott,

If these are truly private loans and not federal loans you are pretty much screwed. Private student loan lenders have no programs that allow you to alter your payment over time based on income. And they don’t offer any programs like federal loans do for student loan forgiveness for public service work.

While it is possible for some to get relief from private student loans in consumer bankruptcy, I think you’d have a tough time of it. You can read this article for case examples.

The most likely candidate for relief is going to be someone that most likely has an underlying medical issue that leads to their inability to increase income.

However, there have been a couple of cases where a law school graduate was able to get some relief from loans after being unable to pass the Bar exam. See this article.

I applaud your desire to become a public interest lawyer but the reality is you are probably not going to make a lot of money doing it. The lender will most likely make the claim it was your choice to work in a lower paying part of the profession.

If you owed money on federal student loans there are income based repayment programs and more importantly the Public Service Forgiveness program would completely eliminate your federal loans after ten years of service in “public interest law.” For more on that, read this.

Please post your responses and follow-up messages to me on this in the comments section below.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

1 Comment

  • I have sucessfully used Chapter 13 to allow debtors to pay on their student loans at 0% interest if they pay 100% of their other debt. When assessing whether or not this is a good strategy, you want to check the cost of the carrying charges (legal fees and trustee commission) offset the saving at 0% interest.

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