A Loan Repayment Plan That Punishes Law Grads
The Department of Education has concocted yet another income-based repayment plan, but this one adds a twist: making graduate debtors pay more.
September 16, 2015 at 09:52 AM
6 minute read
Despite plummeting law school applications and a glut of highly indebted, underemployed law school graduates, Washington appears to believe that its student loan reforms treat law grads too gently.
After promoting the Pay-As-You-Earn (PAYE) repayment plan to ease debt burdens, the Department of Education is pulling back. In July 2015, the department posted the latest addition to its list of income-sensitive repayment plans: Revised Pay-As-You-Earn (REPAYE). As the new plan's name implies, the government is dissatisfied with PAYE, which was itself intended to improve upon the Income-Based Repayment (IBR) option. The department hopes to make REPAYE available by Dec. 31, 2015.
REPAYE differs notably from its predecessor by demanding more from graduate and professional students, who tend to borrow more than undergrads. Instead of cracking down on tuition or curtailing its lending programs, the department proposes to extract more from the students. Unfortunately, most law school debtors do not have the large incomes necessary to fully repay their loans. And because law students make up a large proportion of the borrowers using federal loans to pay for graduate education, they will likely bear the brunt of REPAYE's graduate-student-unfriendly changes.
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