Student Debt and Loan Repayment
A casual reader of the national news would be hard pressed not to have heard of the "student-loan crisis." While current news focuses on the availability of student loans, an equally important issue involves the amount of student loans necessary to secure a legal education.
National debt averages for the Class of 2009 were $66,045 and $100,003, respectively, for public and private law schools. The debt is likely driven by average national law school tuition, which has quadrupled over the past 20 years. This is especially alarming, given that starting salaries have barely doubled during this same period. Graduates across the country are faced with repaying more debt with less income.
In fact, many students are limited in their career choices due to their debt burden. Compare the 2009 national average starting salary in a private firm ($115,254) to the national average starting salary in a government agency ($54,335) or a public interest position ($43,971), and it is all too easy to see why graduates are shying away from public service. While headlines announce three-figure starting salaries for new attorneys, the reality is that the vast majority of attorneys across the country do not work for the large law firms that pay these salaries. The national average for a new attorney starting at a private firm with fewer than 10 attorneys is $54,736. Managing debt burden is a very real issue for Washburn Law students and alumni, the majority of whom take positions in small firms or with the government.
In response to this issue, the Professional Development Office sponsors a series of programs addressing debt issues for students at each level of their law school careers:
- First-year students receive a "no-holds barred" discussion of the realities of law school debt, compounding interest, and budgeting.
- Second-year students are invited to programs discussing ways to reduce spending.
- Third-year students receive information about post-graduate concerns, such as consolidation and repayment options and obligations.
In addition, students are increasingly exploring nontraditional uses for their degrees.
On the national level, Congress passed the College Cost Reduction and Accessibility Act of 2007 (CCRAA), which will help innumerable public interest lawyers and others with increasing debt burdens. The CCRAA includes two distinct programs: the first lowers monthly student loan payments on federally guaranteed student loans (Income Based Repayment or IBR), and the second cancels remaining debt for public servants after 10 years of public service employment (Loan Forgiveness for Public Service or Loan Forgiveness). IBR is not limited to public interest employees and took effect July 1, 2009. Loan Forgiveness is limited to public service employees who make qualifying payments for 10 years or 120 payments. As with any federal program, the paperwork and fine print are important, and the programs do not relieve any debt accrued through private lenders.
- Department of Education Federal Student Aid website.
- Ask Heather Jarvis website (national expert on law student loans, income-based repayment options, and public service loan forgiveness).
- Equal Justice Works student debt relief website.
- Jarvis, Heather, "Student Loan Timeline for Graduating Students," 41 Student Lawyer (March 2013).
- IBR monthly repayment calculator.
- Federal direct consolidation loan information.
- americanbar.org (national statistics regarding debt, tuition, expenses, etc.).
- Jobs & JDs: Employment and Salaries of New Law Graduates... (NALP) (available in the Professional Development Office or at www.nalp.org).
- National Consumer Law Center's Student Loan Borrower Assistance Project is a resource for borrowers, their families, and advocates representing student loan borrowers. This site is for people who already have student loans and want to know more about their options and rights; it includes the publication Direct Loan Consolidation Self-Help Packet (1 MB PDF).
- Philip G. Schrag, "Federal Student Loan Repayment Assistance for Public Interest Lawyers and Other Employees of Governments and Nonprofit Organizations," 36 Hofstra Law Review 27-63 (2007) [read at Hofstra website (246 KB PDF)].