The Pennsylvania Bar Foundation and the Pennsylvania Interest on Lawyers Trust Account Board have launched a new statewide school loan repayment program designed to ease the financial burden on recent law school graduates in hopes of making public service a more attractive and viable career option.
The program, approved by the Pennsylania Supreme Court earlier this month, will offer one-year loans to qualifying attorneys at IOLTA-funded legal services organizations that can be used to repay undergraduate and law school debt and will be forgiven at the end of each year.
Under the program, qualifying attorneys will be eligible to receive roughly $2,000 the first year. After that, program organizers say, the program could be changed so that qualified applicants would receive tiered payments based on their individual debt-to-income ratios.
Pennsylvania Chief Justice Ronald D. Castille said he expects the program to help public interest lawyers stay in the profession despite student loan debt that is often in the six-figures.
Castille said providing the loans to public interest lawyers "encourages individuals with more than just a monetary interest in the legal profession. They're the ones who are willing to do something to help people."
And with the median entry-level salary for a civil legal services attorney hovering around $40,000, according to the most recent study conducted by the National Association for Law Placement Inc., recruitment and retention are real problem areas in the public service sector.
For young attorneys saddled with massive law school and undergraduate debt, public service compensation is simply not enough to live on.
As a result, many either opt for private practice directly out of law school or are eventually forced to leave public service positions after only a few years in order to make ends meet.
"I can't tell you how many times that has happened," said Rhodia Thomas, executive director of MidPenn Legal Services in Harrisburg.
Thomas said her organization just recently lost "a really good, talented lawyer" to the pressures of mounting school debt.
"She had been in a loan repayment program through the Legal Services Corp., but it was a pilot program and it's up for her now," Thomas said. "She said, 'Rhodia, I just can't stay.' She and her husband had two children and a house."
For Thomas, it was a resignation speech she'd heard many times before.
"We'll hire an attorney and after two years, when the loan goes to a higher interest rate or something like that, they'll say, 'Rhodia, I'm sorry, I love my work here, I love what I do on behalf of clients, but I just can't do it anymore,'" she said.
Samuel W. Milkes, executive director of Harrisburg-based Pennsylvania Legal Aid Network Inc., which provides funding to 16 legal aid programs across the state, said attracting and keeping quality lawyers is an increasingly daunting task for public services organizations as school costs continue to rise.
"The salaries within legal services have not been able to keep pace with the level that these loans have increased," he said. "It's a greater challenge today than it was a decade ago and a decade ago people were talking about it being a crisis."
But Milkes was optimistic about the new program.
"This is a big deal to help legal services programs recruit and retain lawyers in public interest positions," he said.
"It's really nice to see at a statewide level that something is happening. I really think it's wonderful," Thomas said.
The origins of the new loan repayment program can be traced back to May 2006, when a Pennsylvania Bar Association Task Force on Student Loan Forgiveness and Repayment Assistance found that the struggle to reconcile huge school loans with modest compensation was a major roadblock for law school graduates considering a career in public service.
In June 2007, the state Supreme Court established pro hac vice admission fees from out-of-state lawyers as a funding source for the IOLTA Board.
"And then we've just been accumulating the money," said Alfred J. Azen, executive director of the IOLTA Board. "There was simply not enough money to get started until just this year."
Castille said the Supreme Court unanimously approved the program at its most recent administrative session.
According to Ebensburg, Pa., solo attorney and Bar Foundation President George Gvozdich Jr., the IOLTA Board forwards those pro hac vice funds to the foundation through a three-year grant and the foundation is then tasked with distributing them to eligible applicants.
"We're the ones who will do the nuts and bolts work of soliciting applications and reviewing information we get from applicants and we're the ones who actually cut the check to the applicants," said Gvozdich.
According to a Pennsylvania Bar Association press release, there will be one loan assistance cycle each year beginning Sept. 1 and eligible IOLTA-funded organizations will be required to submit their employees' applications by Oct. 15.
In January, the initial quarterly payments will go out to eligible attorneys. An attorney who maintains eligibility can apply for 10 one-year loans over the course of his or her employment, the press release said.
Gvozdich is quoted in the press release as saying that the Bar Foundation anticipates that each qualified attorney will receive about $2,000 during the first year of the program but that, in the future, the program could be changed so that qualified applicants would receive tiered payments based on their individual debt-to-income ratios.
Gvozdich told The Legal Intelligencer that the IOLTA Board and the Bar Foundation hope to achieve two objectives during the program's first three years.
"One is to get other sources of funding for LRAP and the other is to expand our services to cover a broader range of pubic service attorneys -- people like public defenders and other attorneys who are doing work without being paid by the client," he said.
Milkes called the IOLTA-funded LRAP "the first statewide initiative of this sort within Pennsylvania."
"There are programs that exist [that are run by] some bar foundations or local county bar associations and there are law school programs that exist, but they're targeted to particular geographic regions or particular populations," he said. "This one is a little different in that it's really meant to be a statewide program covering a large variety of legal aid."
Gvozdich said statewide LRAP applicants are encouraged to also apply for any of the other loan assistance programs available.