Lifting the Burden: Law Student Debt as a Barrier to Public Service

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Executive Summary12• Congress and/or the U.S. Department of Education should increase to at least$30,000 the amount a law student may borrow annually in unsubsidized loans underthe Stafford Loan Program. This amount should be reviewed periodically thereafterand, at a minimum, adjusted for inflation and rising higher education costs.• Congress should create loan repayment/forgiveness programs for lawyers inpublic service under the Stafford Loan Program.•Congress should extend loan forgiveness under the Perkins Loan Program toattorneys working in public service, such as public defenders and legal aid attorneys.• Congress should amend Section 125 of the Internal Revenue Code of 1986 toinclude an educational loan repayment program as part of a qualified benefitassistance program (cafeteria plan) that can be sponsored by employers andoffered to employees.• Congress should enact legislation to give incentives to public service employersto provide educational loan repayment programs.• Pursuant to 5 U.S.C. § 5379, Congress authorized federal agencies to set up loanrepayment programs to repay federally insured student loans when necessary torecruit or retain highly qualified professional, technical, or administrativepersonnel. Congress currently authorizes the agencies to pay up to $6,000 inassistance to an employee in a calendar year, with an aggregate cap of $40,000.Congress should increase the annual cap to at least $10,000, increase theaggregate cap, provide for inflation increases to keep pace with tuition increasesand provide funding for federal agencies to implement these programs.• Congress should amend the Internal Revenue Code to allow a full deduction forinterest paid on student loans obtained for the purpose of attending an institutionof post-secondary education.• The Legal Services Corporation should make loan repayment assistance andforgiveness a priority, by such means as promoting these programs to its granteesand/or exploring the creation of a loan repayment assistance program for its grantees.Law Schools• Law schools should create programs to help reduce student debt burdens andfacilitate a student’s decision to enter and remain in a public service job. Theseprograms should include financial aid programs, such as loan repaymentassistance programs (“LRAPs”), public service scholarships and post-graduatepublic service fellowships.• Law schools should treat as a priority the funding of programs, such asLRAPs, designed to make public service work financially feasible for graduates.• Law schools should assure that their LRAPs have a solid funding base toenable them to be effective.• Law schools with LRAPs should continually evaluate them to determinewhether they are effectively meeting a school’s goals.• Law schools should provide more financial planning and guidance counseling tolaw students prior to matriculation, while enrolled, and following graduation, tohelp reduce debt load while attending law school, as well as adopt measures toachieve debt consolidation and reasonable payment scheduling to minimizedefault. At a minimum, the debt counseling function of a law school shouldinclude discussions of such methods of debt reduction as LRAPs, fellowships andother similar programs.
Page 3 and 4: Copyright © 2003 American Bar Asso
Page 6: Table of ContentsTable Of ContentsP
Page 10 and 11: Executive Summary9THE PROBLEM: EDUC
Page 14 and 15: • In addition to creating law sch
Page 16: y the rest of the members of the ba
Page 20 and 21: position - should also help make cl
Page 22 and 23: one with the lowest total payments
Page 24 and 25: Ms. Median Takes the Job with the P
Page 26 and 27: TABLE 5Starting Salaries of New Law
Page 28 and 29: As the size of educational debts ri
Page 30 and 31: monthly debt obligations. Public se
Page 32 and 33: law graduate debts. Since August 20
Page 34 and 35: Federal 33OVERVIEW OF FEDERAL LOAN
Page 36 and 37: assistance to lawyers, including th
Page 38 and 39: Education Loan Program. When Senato
Page 40 and 41: disliked the twenty-five year repay
Page 42 and 43: A number of bills expanding or init
Page 44 and 45: Congress should amend Section 125 o
Page 46 and 47: A recent Office of Personnel Manage
Page 48 and 49: Law Schools47OVERVIEW OF LAW SCHOOL
Page 50 and 51: strong recruiting tool. Pre-law stu
Page 52 and 53: encourage them to keep borrowing to
Page 54 and 55: programs, sample LRAP legislation w
Page 56 and 57: Conclusion55The Commission was char
Page 58 and 59: ABA Policy• Developed policy pert
Page 60 and 61: APPENDIX 3AMERICAN BAR ASSOCIATION

Lifting the Burden: Law Student Debt as a Barrier to Public Service

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