Proposal
for a Pennsylvania Bar Association Task Force
on
Student
Loan Forgiveness and Repayment Assistance
Introduction
Many law students enter law school wanting to use
their legal training to serve the public interest. However, in just three
short years, as law students face the reality of graduating with enormous
student loan debt coupled with low starting salaries in public interest law that
are just a small fraction of large-firm starting salaries, many outstanding
students conclude that they have no choice but to abandon their original career
aspirations.1
This problem has become more acute with each passing year and is now widely
recognized as a crisis of epidemic proportions without any clear remedy in
sight. It is a problem that we must address because we all have a stake in
attracting the best possible lawyers to public service.
More than a decade ago, the Pennsylvania Bar
Association�s original Task Force on Legal Services to the Needy delivered a
formal report to the House of Delegates that called upon the association to
address the growing problem of student loan debt. The executive summary of
the Task Force, unanimously adopted by the House of Delegates on May 18, 1990,
contained the following finding and recommendation:
�[T]he
costs of obtaining a legal education have escalated dramatically over the past
decade; equally dramatic has been the widening of the gap between salaries
offered to private attorneys and the salaries offered to attorneys taking public
service positions. The typical educational debt carried by a new attorney
contemplating a public service position now exceeds $30,000. As a result
of their educational loan indebtedness, the heavy burden of monthly loan
payments, and the modest salaries available in the public sector, many recent
law school graduates have been precluded from seeking employment in public
service law, and others have been forced to cut short their careers in public
service law. While the disparity in salaries will remain the largest
source of the problem, educational debts have a material and substantial effect
on the choices made by younger attorneys. The Task Force recommends that
the Pennsylvania Bar Association endorse the enactment of an educational loan
repayment assistance law that would encourage talented law students to undertake
lower-paying public service legal positions in Pennsylvania by paying at least
part of their monthly educational loan obligations during the period of their
public service.2
In the decade that has passed since that finding
and recommendation, the problem of student loan debt has only worsened.
Last August, the American Bar Association�s president, Robert E. Hirshon,
announced that staggering loan school debt faced by young lawyers would be one
of the ABA�s top priorities.3
The simple economics of loan indebtedness illustrates the depth of this
problem. National studies document that starting salaries in private
practice average $80,000 while starting public interest law salaries average
only $34,000. The average American law school graduate owes $80,000 in
student loans, requiring monthly repayment amounts of $1,000 or more.
After deducting these payments, graduates who choose public interest work are
left with only $17,000 per year on which to live.4
According to a very recent national study completed by Equal Justice Works
(formerly the National Association for Public Interest Law), large debt burdens
prevent 66% of law school graduates from pursuing public interest jobs. In
this study, a survey of 1,622 graduating law students from across the country
revealed that 94% of respondents financed their law school educations with loans
and 50% of the respondents expect to graduate with debts of $75,000 or more.5
Informal surveys conducted among legal services and public interest lawyers in
Pennsylvania and Philadelphia reveal similar high student debt burdens.
Proposal for a Task Force
Potential solutions to this
problem are complex and involve many dimensions. Some states have chosen
to adopt statewide loan repayment assistance programs.6
The ABA is studying a little known national initiative that resulted in the
adoption of the William D. Ford Federal Direct Loan Program in 1993. This
federal law provides an income-contingent repayment option that allows federal
direct loans to be forgiven after 25 years of low-income work. The ABA is
urging legislative change to improve this option by permitting forgiveness at a
point sooner than twenty-five years. Others are directing their efforts at
increasing the number and effectiveness of loan repayment assistance programs
offered by law schools and public interest employers. Today, only one-half
of the nation�s law schools have some form of school forgiveness or repayment
assistance programs and most programs offer only very modest financial
assistance. Additional conversations are ongoing with institutional
lenders, tax experts, government loan agencies, private foundations, and others
with the objective of developing new and innovative solutions.
The complexity of this problem demands creative
thinking and strong collective efforts from a broadly-constituted statewide task
force that is prepared to pay special attention to local needs and
concerns. The recent successes of the Bar Association�s Task Force on
Legal Services to the Needy (Part II) demonstrate the advantages of a statewide
task force in attracting and energizing leaders of the legal community and the
legislature when tackling difficult issues that require effective consensus
building and problem solving.
This proposal calls for the establishment of a
twenty-one-person task force, formally called the Task Force on Student Loan
Forgiveness and Repayment Assistance. The Task Force would have three
co-chairs, representing the western, central and eastern regions of the state,
and eighteen additional members drawn from all segments of the legal community
and larger community, including representatives from the three branches of
government, local bar associations, legal services and public interest
organizations, law schools, foundations and educational lending
institutions. Special consideration should be given to include several of
the most active and effective members of the Task Force on Legal Services to the
Needy (Part II) as well as leaders of the Association�s current Equal Justice
for the Poor committee.
It is recommended that the Task Force be in place
by April 1, 2003, commence its work by April 15, 2003 and be prepared to deliver
a preliminary, informational (non-action) report at the November 21, 2003
meeting of the House of Delegates. The Task Force should be charged with
studying the precise nature and depth of the problem in Pennsylvania, assessing
programs now in place to address the problem, and proposing short-term and
long-term initiatives � addressed to both the public and private sectors � to
achieve meaningful progress in Pennsylvania. With the creation of such a
statewide task force, Pennsylvania has the potential to become a national leader
in examining the problem, formulating solutions, and assuring that public
interest legal careers are financially possible for the best and brightest of
the next generation of law graduates.
Respectfully submitted,
_____________________________
Louis S. Rulli
Catherine C. Carr
Date: February 1, 2003
1 See Philip
G. Schrag, The Federal Income-Contingent Repayment Option for Law Student Loans,
29 Hofstra L. Rev. 733, 736 (2001).
2 See Summary
of Report and Recommendations, Pennsylvania Bar Association Task Force on Legal
Services to the Needy, Fifth Finding and Recommendation, Adopted May 18, 1990 by
the House of Delegates, at iv-v.
3 James
Podgers, Forging Ahead: Loan Repayment, Billable Hours Still Top Priorities, 88
A.B.A. J. 66 (2002).
4 See Jane
Easter Bahls, It�s Payback Time for Public Interest Lawyers, Student Lawyer
Magazine, September 2002 at 16.
5 See Law
School Debts Forcing Recruits to Private Sector, Chicago Tribune, November 18,
2002, at 14 (reporting on survey administered as part of a nationwide study
being conducted by Equal Justice Works, the National Association for Law
Placement, the National Legal Aid and Defender Association, and the Partnership
for Public Service).
6 As of this
writing, six states have adopted state loan repayment assistance programs.
They are Arizona, Maryland, Minnesota, New Hampshire, North Carolina, and Texas.
Task Force Members
University of Pittsburgh School of Law Public Interest Scholarship Application
July 15, 2004 Meeting Minutes
February 18, 2004, Meeting Minutes
Loan Repayment Assistance Materials
Graduate Fellowships
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