The American Lawyer - February 2008

TO FORGIVE, DIVINE
Help for indebted public service lawyers.

RESH OUT OF THE University of Texas School of Law, Shirley Horng started work with the Legal Aid Society of the District of Columbia last fall. Like many young lawyers, Horng, 26, began her career saddled with debt.

The obligations from her $82,000 in student loans drain her checking account so much that she barely has enough left each month to cover her rent. Movies and restaurants are out of the question. “I told my family at Christmas that I was really sorry but I was not going to be able to get them presents,” Horng says.

The College Cost Reduction and Access Act, enacted this past fall, promises debt relief to Horng and other public interest lawyers weighed down by student loans. The law, which attracted broad, bipartisan support, offers debt-service reductions and, at

the end of ten years, wipes out outstanding loan balances.

The law augments one passed in 1993, which offered far less generous benefits.

For example, participants in the older law’s debt-reduc- tion program had to SHIRLEY HORNG wait 25 years before achieving loan forgiveness. “ People did not choose that program, because they could not contemplate paying for 25 years before qualifying for forgiveness,” says Heather Jarvis, a program manager and student financial aid expert with Equal Justice Works, a Washington, D.C.–based nonprofit group that promotes public interest law.

Advocates of the new law, including the American Bar Association and The Association of American Law Schools, say it

will boost the recruitment and retention of lawyers for public service careers. “It is not intended to entice anybody from the private sector into the public sector, but it is intended to help people who have wanted all along to go into public service. It will help them have the career they desire,” says Philip Schrag, a professor at Georgetown University Law School, who wrote about the law for the November issue of the Hofstra Law Review.

The new law covers anyone who works full-time for a government agency or nonprofit organization. Eligibility is determined according to a formula that compares a borrower’s federal loan obligation to discretionary income.

The numbers for law students

who aspire to public service careers are stark. Eighty percent of law students assume loans (some incurred in college) by the time they graduate. The median amount owed is $103,000. Law school tuition has doubled since 1996. During the same period, salaries for lawyers at nonprofit agencies were up only 27 percent, to $38,000.

For Horng, the impact will be huge. Her monthly loan payment of $646 will be cut by more than half. She is likely to have more than $30,000 in loans left in ten years, which will be forgiven.

Horng says she is aiming for a long career as a legal aid lawyer. Despite her strained budget, she deems her job—she represents indigent tenants fighting eviction and asserting other rights— “extremely gratifying.” And now she’ll also have some gift-pur-chasing power at Christmas.

—J R

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