In general, there are four main kinds of loan repayment/forgiveness programs that together provide tens of millions of dollars in financial assistance to law school graduates each year: (1) Law School Loan Repayment Assistance Programs; (2) Federal Loan Repayment Assistance Programs; (3) State Loan Repayment Assistance Programs; and (4) Private Employer Repayment Assistance Programs. Many, but not all, of these programs exist to help law school graduates who choose public service careers to manage their debt loads. Others, like the Federal Income-Based Repayment Program and Private-Employer Repayment Assistance do not require that a graduate work in the public service sector, although they can benefit those who do.
Law School Loan Repayment Assistance Programs
Law School LRAPs provide financial aid to law students after they graduate and take qualifying, low-paying jobs, typically in public interest or government positions. As NYU’s Assistant Dean for Admissions and Financial Aid, Kenneth Kleinrock, noted in an AdmissionsDean interview, an LRAP is “a scholarship at the back end. Any student who takes a qualifying job is eligible to be considered for LRAP benefits that, in some cases, can pay up to a student’s full law school debt burden over a ten-year period. Currently, NYU has about 500 alumni participants in the [LRAP] program and spends close to $5 million annually to support our alumni in public interest careers.”
NYU Law is hardly alone with its LRAP. Indeed, LRAPs are by far the most popular kinds of loan forgiveness programs, with more than 100 law schools currently participating. Each law school creates its own LRAP eligibility, benefits, and repayment terms and conditions. Law school LRAPs vary by the kinds of employment that qualify, income caps, how income is calculated, whether a student’s assets are considered as part of the calculation, whether you have to have a law license and/or practice law to qualify, how law schools fund their LRAPs, how long you must engage in public-interest law to qualify, etc. In general, law schools with larger endowments tend to provide more generous LRAP benefits to their law students, and LRAP programs often serve as strong recruiting tools for law schools trying to attract public-interest-minded law students.
Federal Loan Repayment Assistance Programs
In 2007, Congress created 2 significant debt reduction/forgiveness programs: the Public Service Loan Forgiveness Program and the Income-Based Repayment Program.
Public Service Loan Forgiveness Program
This program eliminates loans for law school graduates who have worked for 10 years in the public-service sector. This program applies only to Direct Loans (i.e., Federal Direct Stafford and PLUS Loans and Federal Direct Consolidation Loans) on which the borrower has already made 120 monthly payments (i.e., 10 years of payments).
This program caps the monthly payments law school graduates make when they have lower-income jobs (including public interest and/or government jobs). The capped monthly payments are designed to be affordable and are based on the borrower’s annual income and family size; the borrower’s total debt load does not affect the calculation. The IBR Program applies only to Direct Loans (i.e., Federal Direct Stafford and Grad PLUS Loans and Federal Direct Consolidation Loans).
Higher Education Reauthorization and College Opportunity Act of 2008 (HERCOA)
In 2008, Congress passed but did not fund four loan forgiveness/repayment programs for public-interest attorneys. To date, they remain unfunded, although significant activity toward funding some/all of these programs occurred in 2009-10. These four programs are:
The John R. Justice Prosecutors & Defenders Incentive Act: This program provides up to $10,000 annually for attorneys who commit to working a minimum of 3 years as state and local prosecutors, as well as federal, state, and local public defenders. Attorneys may receive up to $60,000 in loan repayments as part of this program. The John R. Justice Act was modeled on an existing law school repayment program for federal employees and federal prosecutors. To date, this program is unfunded.
The Legal Assistance Loan Repayment Program: This program permits the U.S. Department of Education to provide up to $2,000 annually for up to 5 years for attorneys serving in “areas of need.” To date, this program is also unfunded.
The Loan Forgiveness for Service in Areas of National Need: Similar to the Legal Assistance Loan Repayment Program, this program permits the U.S. government to provide up to $2,000 annually for up to 5 years for public-sector employees. To date, this program is also unfunded.
The Perkins Loan Cancellation for Public Service: This program would provide for the partial cancellation of Perkins Loans for attorneys serving in certain public service jobs, including public defenders. To date, this program is also unfunded.
State Loan Repayment Assistance Programs
Twenty-three State LRAPs also provide financial aid to public-interest lawyers. As with Law School LRAPs, the terms and conditions for eligibility, benefits and repayment terms vary by state. State LRAPs are typically administered by state bar associations and foundations, state education agencies and/or non-profit organizations. Below is the contact information for each State LRAP.