Sure, a career in public service seemed like a great idea -- until you considered the mountain of law school loans you'd have to repay after graduation. Fortunately, the number of loan-forgiveness programs, designed to keep lower-paid graduates from drowning in debt, have nearly doubled in the last four years. Officials credit skyrocketing tuition costs, stagnant salaries for public service workers and competition among schools seeking to recruit top students.
By Tresa Baldas|July 07, 2004 at 12:00 AM
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Law school graduates seeking careers in public service can worry less about drowning in debt as a growing number of loan-forgiveness programs are popping up at law school campuses nationwide, nearly doubling in the last four years. Eighty law schools now offer loan repayment assistance programs, compared with 47 in 2000, and another 20 law schools are currently working on creating the programs, according to a new report released by Equal Justice Works. Schools of all sizes and types — both private and public — are taking part in the debt-forgiving trend, from Harvard University offering 100 percent loan forgiveness to law grads making less than $37,000 a year to Rutgers University covering 50 percent of loans to law grads making less than $45,000. Law school officials say several factors are fueling the drive toward loan-repayment programs: skyrocketing tuition costs, stagnant salaries for public service workers and competition among schools seeking to recruit top students. “There are certainly competitive factors. People applying to law schools want to be able to have as full a range of career options as possible, and loan-repayment assistance is obviously a big part of that,” said Ken Lafler, director of financial aid at Harvard Law School, whose 26-year-old Loan Income Protection Plan is the nation’s oldest. “When LIPP started here, there was no other program,” Lafler said. “There wasn’t a competitive impulse. LIPP started because there was a significant and growing problem of salary disparity between private and public sector lawyers.” And there still is. The disparity between public and private sector salaries has soared over the last decade, according to the report by Equal Justice Works, a Washington-based nonprofit group that researches law school tuition rates and student debt, and their effect on legal services for the poor. From 1992 to 2002, salaries for public interest lawyers grew from $26,000 to $36,000, while salaries for attorneys in private practice grew from $47,500 to $90,000. At the same time, tuition also increased sharply. From 1992 to 2002, private law school yearly tuition increased from $13,730 to $24,920; tuition at public schools increased from $4,015 to $9,252 for residents, and from $8,850 to $18,131 for nonresidents. American Bar Association statistics show that the average amount borrowed by a law school graduate in 2003 was $45,763 for a public school graduate, and $72,893 for a graduate of a private school. Based on that figure, the payment on loans on a 10-year plan is about $450 a month for public law school graduates and $718 a month for private school grads. “With tuitions going up and public interest salaries just staying low, I think students have to demand [loan-forgiveness plans],” said Mary Mulvenon, program manager for research at Equal Justice Works, which also helps law schools set up loan forgiveness programs. School officials note that while “loan forgiveness” is the popular term for financial aid programs that help public servants, the more accurate term is loan repayment assistance plans, where schools give students money, and the students then use that money to pay off their tuition debts. Students who qualify for these loans must get a job in the public sector, working for the government, legal aid services or any nonprofit legal organization. SUCCESS STORIES And there are plenty of takers. A case in point is Harvard Law School graduate Gene Koo. A 2002 graduate with $50,000 in loans, he got a $40,000-a-year job managing Web sites that educate low-income residents about their legal rights. Lucky for him, Harvard’s LIP program is covering 90 percent of his loan. “Things like LIP programs remove an excuse not to go into the public service,” said Koo. “I think I probably could scrape by, but without LIP, it would have made it very hard not to take the path that most of my friends had — which is go to a law firm, pay off their loans and then jump ship and go into public interest, which they didn’t end up doing.” Koo said LIP also is helping his fiance, Rachel Anderson, another Harvard Law School graduate. With $75,000 in loans to pay off, Anderson took a job doing policy work for the Episcopal City Mission in Boston. Like Koo, Harvard is paying off most of her debt, making her $45,000 salary feasible. Meanwhile, Koo and Anderson live a frugal life to maintain their LIP status. They live in a one-bedroom apartment in Cambridge, Mass., shying away from buying a house because it could count against them. They don’t have a car, cable TV or home phone. “The [LIP] program isn’t designed to help you get rich. It does enable you to do what you want to do. You just have to be willing to make sacrifices,” Koo said. A loan program was essential to Emily Maw, a Tulane University Law School graduate. Maw, who makes $36,000 a year as legal director of the Innocence Project New Orleans, graduated with $70,000 in loan debt. Without help, she would have had to pay $800 a month in loan payments. But now she pays $300, and Tulane University pays the rest. “It does actually enable me to do this comfortably,” Maw said of the LRAP. “It makes public interest work viable for someone who had to pay a lot of money out to go to law school.” Tulane University Law School started its LRAP program in 1989. The salary cap for LRAP participants ranges from $39,000 to $44,000, depending on where they live. Under Tulane’s program, graduates must pay 12 percent of their net income — about $320 a month — toward their law school loans, and the school covers the rest. THE NOVICES As word of success stories like Koo’s and Maw’s spread, more schools are either starting loan programs, or improving what they already have. College of William and Mary School of Law is one of the newer players in this debt-paying game. Unlike Harvard, which has $1.8 million set aside for its public service graduates, William and Mary has less than $50,000. School officials say that over the last two years students have hosted casino nights and auctions where a professor donates a night of dinner in his or her home or a round of golf, alumni donate beach condos and some students auction themselves off for a date. The law school’s dean even auctioned off his parking spot to help. “There is such excitement and a buzz going on,” said Robert Kaplan, associate dean for career services at William and Mary, and chairman of the school’s loan-replacement plan. “This is something that has been a priority for quite a while.” William and Mary will not disburse money to graduates until spring 2005. Kaplan said the goal is to provide $5,000 to each law graduate who gets a job in public service. He said until someone steps forward with a big donation, “we’re going to be taking some small steps.” BIG GIFTS HELP Meanwhile, Rutgers School of Law is taking some big steps in terms of loan forgiveness, thanks to a $1 million gift from an anonymous donor two years ago. Up until then, the New Jersey state university’s LRAP was funded solely by a $25-per-student fee. “It has doubled what we’ve been able to offer,” said Nicky Fornarotto, financial aid director and LRAP administrator. “It’s been two years now and I can’t tell you how excited I still am about it.” Rutgers this year awarded 30 graduates with LRAP benefits, paying off half of what they owed for one year. The average loan debt for Rutgers graduates is about $55,000. Anyone making less than $45,000 a year in public service qualifies for a loan, and can apply for up to five years. Washington University School of Law in St. Louis also has reaped the benefit of a generous donor. The loan repayment program, which started two years ago with a budget of $75,000, got a $750,000 donation last year from an alumnus. “We were very lucky because we didn’t have to worry about the funding,” said Elizabeth Patton, public service coordinator for the law school. Washington University offers 100 percent loan reimbursement to graduates making $25,000 or less. The reimbursement drops five percentage points for every $1,000 earned above that amount. PROBLEMS AT UCLA Launching a loan-forgiveness program is one thing. Keeping it properly funded is a different challenge altogether. Take, for example, the University of California, Los Angeles School of Law, where a student review committee is currently working to rewrite the school’s 11-year-old loan-forgiveness plan with hopes of making it more competitive. Students and staff alike say the program, funded primarily by annual student tuition fees, trails those of the top law schools in terms of generosity. “As best as we can tell, the program has historically been underfunded,” said second-year law student Christian Schreiber, who is on the review committee and is calling on successful UCLA alumni to help the loan program. According to Cathy Mayorkas, director of public interest programs at UCLA, the law school’s loan repayment plan has an annual budget of $75,000, and benefits an average of 10 graduates a year. It covers anywhere from 5 percent of a person’s loans to 100 percent, depending on salary, marital status, geographic location or whether the applicant has children. While there is no salary cap, Mayorkas notes that the closer an applicant gets to making $40,000, the harder it is to qualify for the program. It also covers only the first $60,000 in loan debt, so if a student owes more, he or she has to pay the rest. “We know that it is not as helpful as we would like to to be,” said Mayorkas. “I think it’s been purely an issue of funding constraints, because it’s a state school … but I think it will be a priority going forward.” New York state just recently took steps to bolster its law school loan program. Bar exam fees were increased to provide law school tuition debt relief for public service attorneys. Negotiators in both houses of the state legislature agreed to raise New York’s bar exam fee from $250 to $400, creating a $2.8 million secure loan fund. Under the Public Interest Legal Services Loan Assistance Act, attorneys with three years on the job can apply for up to $6,000 a year for a maximum of six years. According to a 2002 Equal Justice Works survey, 66 percent of law school graduates said they decided not to go into public service because of high debt. And 68 percent of public interest and government employers reported difficulty recruiting attorneys, mainly because of low salaries and high debt. The lack of public service attorneys has not escaped the notice of ABA President Dennis Archer. “There is an absolute need for more lawyers to go into the legal services entity or public interest law firms,” Archer said. “By the sheer numbers, there are more lawyers out there helping … but because of the economy, you still have more people who are poor than lawyers who can serve them.” PROGRAM SAMPLER
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