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The American Bar Association is lobbying the Obama administration and Congress to extend relief to recent law school graduates who went into debt to finance their legal educations but haven’t been able to find a job because of the recession. The ABA wants the government to let unemployed graduates convert private loans into federal ones. The change could allow them to defer repaying those loans for as long as three years. The effort is in its early stages — executives of the largest provider of private law school loans, Access Group Inc., weren’t even aware of it, according to spokeswoman Linda Smith. “This is really intended to give them some breathing room,” said ABA President Carolyn Lamm. The plan was proposed by the ABA’s recently formed Commission on the Impact of the Economic Crisis on the Profession and Legal Needs, which is examining how lawyers can confront the recession. Debt is a huge issue for many law school graduates, particularly given the difficult legal job market. The average public law school graduate borrows $59,324 for law school, according to the ABA. That figure is $91,506 for graduates of private law schools. Many law students take out a combination of federal and private loans. Different rules apply to federal and private students loans. Federal loans can be deferred for as long as three years if the borrower is unemployed. Private loans generally don’t come with that deferral flexibility, said Peter Halle, a senior counsel at Morgan, Lewis & Bockius and a member of the economic crisis committee. He is spearheading the ABA’s efforts on the student debt issue. “There’s a fair number of people of people who have private loans, and they don’t have the flexibility they need today,” Halle said. “Without doing anything radical, we’re looking to see if we can increase the amount of money a law student can borrow from the federal government and make that retroactive.” Essentially, the ABA proposes allowing law graduates to borrow from the federal government to immediately pay off any private debt, since most private loans carry no prepayment penalty. Borrowers then could enjoy the deferral benefits of federal loans, such as not having to start repaying loans when they’re out of a job. “The point of the program is to provide a temporary bridge by swapping out the private loan for a public one,” Halle said. It’s not entirely clear how this change would be accomplished. The ABA would prefer a modification of the regulations pertaining to federal student loans, although legislation might be required, Halle said. The plan would be “revenue positive” for the federal government, he added. The ABA plans to meet with federal education officials, members of Congress and White House officials to discuss the plan, Halle said. Preliminary discussions have already occurred and the idea has been well received, Lamm said. The move would help the private loan providers, too, by helping borrowers to pay off their loans when otherwise they might default, Lamm added. “The [private loan providers] should like this plan because otherwise there is a bankruptcy bath waiting in the wings,” she said. If the changes can’t be made through regulation, legislation to that effect could be tacked on to a bill before the end of the current Congressional session, Halle said.

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