March 21, 2022 – Within the legal community, it’s no secret that one of the biggest hurdles for new attorneys is managing the debt load that comes along with a legal education. The costs of tuition for law school continue to increase to levels that would have seemed nearly unimaginable for a previous generation of attorneys.
According to Tennessee non-profit Law School Transparency, the rising costs of a law degree have significantly outpaced inflation over the last three decades. In 1990, the average public school tuition was $3,236 for residents, which would have cost a student $6,326 in 2019. Instead, average tuition was $28,186 (2019 dollars) for residents. In other words, public school was
four and a half times as expensive in 2019 as it was in 1990, after adjusting for inflation. The costs are even higher for non-resident public school students and private law schools.
Today, the average debt for law school graduates who borrow for tuition is around $118,000. In response to the coronavirus pandemic,Congress passed a student debt moratorium to assist borrowers, which the White House recently extended through May 1, 2022.
None of this information is news for recent law school graduates, but the total impact this level of debt has on the both the legal system, individual lawyers, and the communities where they live and work is less well understood. In 2021, the American Bar Association released the
2021 Student Debt Survey, which explores in detail issues surrounding law student debt, its impact on new attorney’s choice of profession, their finances and life choices as well as mental health and overall wellbeing. One of the primary recommendations of the study is to improve the Public Service Loan Forgiveness (PSLF) program to provide a more transparent and seamless process for those seeking to maintain eligibility.
The State Bar of Wisconsin supports the Federal Public Service Loan Forgiveness program as a tool to support government and nonprofit service providers who ensure the delivery of vital services to the public, especially in rural and/or underserved communities where legal resources are scarce. It also serves as a recruitment and retention tool that helps reduce student loan debt obligations for those that choose potentially less lucrative legal careers in public service.
Federal Public Service Loan Forgiveness
Twenty years ago, it was recognized that there was a critical, nationwide problem with government and public service positions were going unfilled or experiencing high turnover. Among these, prosecutors, defense attorneys, teachers, health providers, and other public service workers were in especially short supply. In 2007, Congress passed the Public Service Loan Forgiveness (PSLF) program, creating an economic incentive for professionals willing to commit to careers in the public sector.
Attorneys who work for a qualifying non-profit 501(c)(3) organization, the government, or a few other qualified employers may be eligible for forgiveness of their federal direct loans after making 120 payments and meeting other qualifications. This option can make the financial situation of a public interest attorney much more manageable.
However, the program has not been without problems. Regulations for PSLF can sometimes be confusing for applicants, as is maintaining eligibility for ten years according to the guidelines. As a result, most PSLF applicants are ultimately denied eligibility. Recent changes, however, have not only given aspiring applicants hope, but have retroactively found applicants eligible and discharged their loans, including those previously denied access. But eligible borrowers must act soon because some changes are only temporary.
In October, 2021, after a nationwide, grassroots week-of-action spearheaded by the American Bar Association and the
Coalition to Preserve PSLF sent thousands of comments, concerns and suggestions about the program, the Department of Education announced plans to overhaul PSLF to make it easier for borrowers to understand and access the PSLF program. The Department’s fact sheet dated Oct. 6, 2021, outlines significant changes to the program rules, including a limited waiver of some of the prior requirements that will be in effect only through Oct. 31, 2022.
To learn more about the new PSLF qualifying rules and what’s changed under the limited waiver, visit The Federal Student Aid website’s overview of the temporary PSLF Waiver.
Other Loan Repayment Assistance Programs
In addition to PSLF, there exist other Loan Repayment Assistance Programs (LRAP) available to some attorneys. These include refinancing programs, structured repayment like income-based repayment and pay-as-you-earn programs, as well as employer-based repayment assistance. The ABA provides a good overview
loan repayment resources on their website.
What You Can Do: State Bar of Wisconsin Advocacy Network
Many attorneys desperately need lawmakers to enact a more comprehensive, permanent solution to the problem of massive student debt. You can help make a difference by using the
Advocacy Network to call on Congress to address the student loan debt crisis through loan forgiveness, strengthening the Public Service Loan Forgiveness Program (PSLF), permitting borrowers to refinance their federal student loans, and enacting legislation to allow student debt to be discharged in bankruptcy proceedings without showing undue hardship.
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