Many people enter law school with a deep commitment to ensuring access to justice and the courts for all persons. Yet, upon graduation, they find that they must forego their laudable aspirations in public interest in light of the significant legal education debt required to graduate. Studies show that most graduates of law school have a combined debt from undergraduate and graduate studies in excess of $80,000, or loan payments of more than $1,100 a month. Only those students with debt burdens half that size tend to enter public interest positions, where the median starting salary is $36,000, which does not include regular raises, health care, retirement savings or other such benefits. Not surprisingly, a recent study found that law school debt prevented 66% of student respondents from entering public interest positions. According to legal service providers, many new lawyers are unable remain in such positions for more than a couple of years, adversely affecting the professionalism and expertise their offices are able to deliver.

To assist people committed to public interest work, state and federal governments have established a few limited loan cancellation or forgiveness programs. While these would be of great assistance to appropriate lawyers or legal service providers, lawyers are not currently eligible to participate in the majority of such programs. Many members of Congress oppose including lawyers in these programs because they believe loan forgiveness should be targeted only to persons entering traditionally low paying occupations, occupations that have severe shortages, or occupations related to a national need. They suggest lawyers should work in a large firm for several years to pay back their loans on an expedited basis if they wish to pursue a public interest career subsequently. However, this view not only discounts the value of this work and the law graduate's commitment to the issues, but it ignores the highly-competitive market for such high paying positions even for those who might be inclined to pursue the option.

In 2001, to study the issue in-depth, the American Bar Association formed the Commission on Loan Forgiveness and Repayment Assistance. Two years later, the Commission issued a report including steps that government and law school officials could take to address the situation. A complete copy of the report and its recommendations can be found here at the ABA's Legal Education's web site.

On September 27, 2007, the President signed into law P.L. 110-84, the College Cost Reduction Act, which includes an ABA-advocated loan forgiveness program for public service. Under the program, which became effective October 1, 2007, borrowers may repay their qualifying federal student loans as an affordable percentage of their income, and after 120 payments (10 years), any remaining balance is forgiven by the government. Following July 1, 2008, borrowers whose loans had already been consolidated within the Federal Family Education Loan program could re-consolidate those loans into the William D. Ford Direct Lending program for the purposes of pursuing the loan forgiveness benefit.

On August 15, 2008, the American Bar Association filed comments in response to the Department of Education’s proposed implementing regulations to carry out the program. The final regulations are expected by November 1, 2008. Among the class of professions and employment sectors covered, the Act includes “public interest law services (including prosecutors and public defenders and legal advocacy in low-income communities at a non-profit).” In addition, persons working in “government,” “military,” and at 501(c)(3) organizations are also included. The program became effective October, 1, 2007 for some borrowers, does not require a separate appropriations bill, and critical dates over the next two years will progressively expand opportunities for additional persons to enroll. Persons may find a law review article written by Prof. Philip Schrag of Georgetown University Law Center useful, as well as information and financial calculators at www.FinAid.org and www.IBRInfo.org.

Further, on August 14, 2008, the President signed into law, P.L. 110-315, Higher Education and Opportunity Act, which provides public service lawyers four additional avenues of potential loan relief. This legislation reauthorized the Higher Education Act for the first time since 1998 and included among a number of substantial reforms to higher education the following:

The John R. Justice Prosecutors and Defenders Incentive Act (Section 951)

This program, championed by Sen. Richard Durbin (D-IL), and joined last Congress and this by Sen. Arlen Specter (R-PA), and in the House by Rep. David Scott (D-GA), Rep. Bobby Scott (D VA) and Rep. Ted Poe (R-TX), provides student loan relief to prosecutors and public defenders including for juvenile delinquency proceedings, and those who provide education and training. The program provides up to $10,000 per year, in exchange for a one-time renewable 3-year commitment, to a maximum $60,000. Given the recruitment purpose of the legislation, priority will be given to those with fewer than 3 years or fewer of service; and those least able to repay. Additional rules will be promulgated by the Department of Justice, including how the money will be distributed to ensure parity between prosecutors and public defenders, and among the state and local jurisdictions. The program will be authorized for just six years, at $25 million, plus such additional sums as necessary to carry out the program. The Inspector General will conduct a study at year three to report on the efficacy of the program.

The Legal Assistance Loan Repayment Program (Section 431)

This program, championed by Sen. Tom Harkin (D-IA), and joined in amending it to S.1642, the Senate counterpart to H.R. 4137, by Sen. Benjamin Cardin (D-MD), provides civil legal assistance lawyers, including those who work with those with disabilities, loan repayment of up to $6,000 per year, in exchange for a renewable three-year commitment, to a maximum of $40,000. As a recruitment tool, the program gives priority to those with less than five years of civil legal assistance practice, and fewer than three years in the present office. The program is authorized indefinitely at $10 Million per year. Language would prevent benefiting from both this program and related ones, e.g., the 428K forgiveness program for jobs of national need and the College Cost Reduction and Access Act program, the parameters of this, and additional regulations, to be promulgated by the Department of Education.

428K Loan Forgiveness for Service in Jobs of National Need (Section 430)

This program provides a lengthy list of jobs considered to ones of “national need.” Among the list, it includes “Public Sector Employees,” which in turn includes “public interest legal services (including prosecution, public defense, or legal advocacy in low-income communities at a nonprofit organization)." This program would provide no more than $2,000 per year, and for no more than 5 years and $10,000. It will be administered by the Department of Education. Again, this program includes a prohibition on persons benefiting from it, and other loan forgiveness programs.

Perkins Loan Cancellation for Public Service (Section 465)

This program cancels a percentage of a borrower’s outstanding Perkin’s loan debt for performing certain kinds of public service jobs. In Conference Committee, language was added extending this program’s reach to "a full-time attorney employed in a defender organization established with section 3006A(g)(2) of Title 18", i.e., (A) federal public defender, and (B) community defender. The program cancels 15% for the first or second year; 20% for the third or fourth year, and 30% for the fifth, or 100% forgiveness for 5 years service. In addition, Congress also increased the loan limits under the Perkins program for graduate and professional students to $8,000 per year, to a maximum of $60,000.

Appropriations for FY09 which are normally approved by the start of the fiscal year in October each year have been carried over at existing funding levels through March 2009, at which time their funding requirements would most likely be addressed.

• It is a worthy pursuit to lower the financial barriers presented to these graduates who desire to ensure rights and justice for those less fortunate in our society.


• Students who borrow for law school are graduating with an average educational debt between $70,000 and $80,000 with monthly payments averaging $1,100. The median public interest legal salary is approximately $36,000, which often does not include regular raises, health care, retirement savings or other such benefits. Clearly, the average law school graduate carrying a typical educational debt will face tremendous financial burdens upon entering the comparatively lower paying field of public interest law.


• This disparity between public interest and government salaries and the tremendous debt burden faced by a majority of law school graduates effectively precludes many young lawyers from pursuing a career in public service.


• The need for legal services attorneys in America has never been greater, over 80% of the civil legal needs of the poor are not being met.


• The federal government's loan forgiveness programs are severely limited in scope and impact. Despite the great need for legal services providers, lawyers are not eligible to participate in most of the current federal government loan forgiveness programs.


• The current $18,500 cap on Stafford loans for graduate and professional students is insufficient. This amount, set by Congress in 1992, has not been adjusted for over ten years and doesn't reflect rises in inflation or tuition rates since that time. For many students, the capped amount of $18,500 does not even cover the annual cost of tuition, much less for living expenses and incidentals. Therefore, students must also borrow from private lenders, at much higher interest rates, to cover the cost of their education. (Fact Sheet on the Stafford Loan Program Increase) (PDF)


• The 25 year repayment term currently in effect for the income contingent repayment option under the Federal Direct Loan Program discourages graduates from electing this option, as does the option's built-in marriage penalty. Congress should change the law to eliminate the marriage penalty and allow forgiveness of a borrower's remaining debt after 15 years of repayment, rather than 25, once a specified number of years have been spent in full-time public service during the repayment period. (Fact Sheet on the Income Contingent Repayment Option - PDF)

The ABA urges law schools, state and local bar associations, and federal and state lawmakers to establish Loan Assistance Repayment, Loan Forgiveness, and Income-Sharing Programs for law school graduates accepting low-paying, legal, public interest employment. Certain changes should also be made to the Federal student loan program to help alleviate the debt burden for law students. The ABA supports an increase to at least $30,000 in the amount of unsubsidized Stafford loans that a graduate or professional student may borrow annually. The ABA also strongly supports improvements to the income-contingent repayment option of the William D. Ford Federal Direct Loan Program. Congress should provide forgiveness after 15 years for those who have spent a specified number of years in full-time public service. It should also eliminate or reduce the program's marriage penalty. The ABA also supports amending the Internal Revenue Code to permit employers to provide a benefit for their employees to repay qualifying educational loans with pre-tax dollars.