Refinancing Law School Loans: When It May Make Sense (and When to Wait)

Refinancing law school loans can lower the total cost of education debt, but interest rates are not the only factor to consider.

Law school graduates often have six-figure loan balances. Early legal careers vary widely, so a universal approach to managing law school loans may not work for everyone.

According to a 2024 American Bar Association survey, the median student loan debt for law school graduates was $112,500, underscoring the importance of repayment planning for early-career financial decisions.

Refinancing can lower interest costs or simplify repayment, but it may limit flexibility for borrowers with federal loans who are eligible for income-driven repayment or forgiveness programs.

Understanding how refinancing works and how it fits with different legal career paths can help borrowers determine when refinancing law school loans makes sense, or whether waiting or not doing it at all may be the better option.

Student loan refinancing replaces one or more existing loans with a new loan from a private lender. When you refinance, the new lender pays off your current loan balances. From there, you repay the refinanced loan under its new terms.

Refinancing can change several aspects of your loan structure. Here are some pros of refinancing:

• Get a lower interest rate: One potential benefit is the opportunity to secure a lower interest rate if your financial profile has improved since you originally borrowed the loans. Lower rates can reduce the amount of interest that accumulates over time, thereby lowering the total repayment cost.
• Change your monthly payment: Refinancing may also allow borrowers to modify their monthly payment by selecting a different repayment term. For example, choosing a shorter repayment period can increase monthly payments but reduce total interest costs. A longer term may lower monthly payments but could increase the full interest paid over time.
• Loan simplification: Borrowers with multiple loans may be able to combine their balances into a single refinance loan with a single monthly payment. This could make payoffs easier as you won’t have to manage multiple payments with varying due dates.

Although there are many benefits, refinancing federal student loans involves an important trade-off. When federal loans are refinanced through a private lender, they become private loans. This means borrowers may lose access to federal repayment protections such as income-driven repayment plans and federal forgiveness programs.

RELATED: How to Apply For Student Loan Forgiveness (2025)

For many law graduates, their career path can play a major role in determining whether refinancing makes sense. Two borrowers could graduate with similar debt levels but pursue very different career paths, leading to different repayment strategies.

Attorneys working in public-interest roles or government positions often earn lower salaries than those in private-sector jobs, particularly at larger private firms. However, these roles may qualify for programs such as the Public Service Loan Forgiveness (PSLF) program. 

PSLF can forgive remaining federal loan balances after 120 qualifying payments for those working for eligible nonprofit or government employers. Borrowers must also be on a qualified federal repayment plan.

Because refinancing federal loans would remove eligibility for PSLF and other federal repayment programs, borrowers pursuing public service careers may opt to keep their loans in the federal system.

Lawyers working in large private firms—often referred to as BigLaw—may earn significantly higher starting salaries. Higher income can make aggressive repayment strategies more realistic. In these situations, refinancing may help cut interest costs if the borrower qualifies for a lower rate and plans to repay loans more quickly.

Lawyers working in small or mid-size firms may experience income levels that vary depending on the firm, location and practice area. Because financial stability can take time to establish, refinancing decisions in these situations often depend on whether borrowers feel comfortable committing to fixed monthly payments.

Finally, lawyers who start solo practices or work on a contract basis may experience fluctuating income, particularly in the early years of their careers. In these cases, maintaining repayment flexibility—such as income-driven repayment plans—can provide a valuable financial fallback.

The table below summarizes how different legal career paths may influence refinancing decisions.

Legal professions often evolve in the first several years after graduation. Because of this, many borrowers may consider revisiting refinancing decisions once their career direction, income stability and long-term goals become clearer.

RELATED: Income-Driven Repayment for Student Loans: How it Works

Refinancing law school loans may be beneficial in several situations, particularly when a borrower’s financial profile has improved since the loans were first taken out.

Borrowers with private student loans often have fewer protections to lose, which can make refinancing simpler from a strategic standpoint. If interest rates are lower than the original loan rates, refinancing may reduce long-term interest costs.

Stable and predictable income can also make refinancing more practical. Lenders typically require proof of income and a strong credit profile before approving refinance loans, so borrowers with steady employment may qualify for better offers.

Improved credit scores can also play an important role. Borrowers may graduate from law school with limited credit history, but after a year or two of on-time payments and responsible credit use, their credit profiles may strengthen. This improvement can sometimes lead to lower refinance rates.

Borrowers should also consider how the repayment term affects the loan’s overall cost. A longer term may reduce monthly payments, but it could increase total interest costs over time. Comparing both monthly payments and total repayment cost can help borrowers evaluate whether refinancing provides meaningful savings.

In some cases, delaying refinancing may be the wiser choice.

• Holding onto PSLF access: Borrowers pursuing loan forgiveness programs may determine that the best option is to keep their loans within the federal system, since refinancing federal loans into private loans would eliminate eligibility for programs such as Public Service Loan Forgiveness.
• Relying on IDR plans: Borrowers who rely on income-driven repayment plans may also benefit from waiting. These plans adjust monthly payments based on income and family size, helping keep payments manageable during periods of lower income.
• Income instability: Uncertain income is another reason some borrowers may delay refinancing. Lawyers early in their careers may change roles, firms or practice areas before their income stabilizes.
• Early career opportunities: Clerkships and short-term positions can also create temporary income patterns that might not reflect long-term earning potential. In these cases, borrowers may want to wait until they transition into more permanent roles before evaluating refinancing options.
• Developing a stronger credit profile: Finally, borrowers who are still building their credit profiles may receive better refinance offers later. Waiting until credit scores improve can increase the likelihood of qualifying for lower interest rates.

It’s always okay to wait and consider your options before financing. The intent is to ensure that refinancing puts you in a stronger financial position. 

RELATED: Here’s the Credit Score You Need to Refinance Student Loans

Borrowers considering refinancing law school loans can take a planned approach to evaluating their options.

1. Separate your loans by type

Start by seeing which of your loans are federal and which are private. This distinction is important because refinancing federal loans removes federal protections, while refinancing private loans generally does not involve the same tradeoffs.

2. Decide whether forgiveness could matter to you

If you may pursue Public Service Loan Forgiveness or other federal programs in the future, keeping federal loans within the federal system may be important.

3. Prequalify with refinance lenders

Many lenders allow borrowers to check potential interest rates through a soft credit inquiry. This provides a realistic view of available refinance offers without affecting your credit score.

4. Compare offers carefully

When reviewing refinance offers, consider the APR, repayment term, monthly payment and total repayment cost—not just the interest rate.

5. Refinance only the loans that match your plan

Some borrowers refinance all of their loans, while others refinance only private loans or only the highest-interest balances.