The Project on Student Debt's recently released report, titled "Student Debt and the Class of 2009," estimates that college seniors in 2009 graduated with an average of $24,000 in student loan debt. For those continuing on to obtain advanced and professional degrees, the situation is even more dire. For example, the American Bar Association's Legal Education Statistics for the academic year 2008-2009 indicate that the average amount borrowed by law school graduates attending public school is $66,045 and by private law school graduates is $100,002.
Put these grim statistics next to the fact that salaries for public service and government positions are stagnant, and you have an alarming trend: Many people who want to work in public service jobs will not be able to afford to pursue those careers.
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In 2002, Equal Justice Works, the National Association for Law Placement, and the Partnership for Public Service conducted a study "From Paper Chase to Money Chase: Law School Debt Diverts Road to Public Service" which found that law school debt prevented 66 percent of student respondents from considering a public interest job or government job. For example, entry-level civil legal aid lawyers earn on average $40,000 according to the NALP 2008 Public Sector and Public Interest Attorney Salary Report. Repayment under the standard 10-year plan, which would require a monthly payment of approximately $863, would be virtually impossible at that income level. Even under a 30-year repayment plan, the approximate monthly payment would be nearly $500 per month.
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Similarly, an ABA Commission on Loan Repayment and Forgiveness report, "Lifting the Burden: Law Student Debt as a Barrier to Public Service," came to the following conclusions:
• As law school tuitions and student debt have sharply escalated, fewer and fewer law school graduates can afford to take comparatively low-paying public service positions.
• Many law graduates who take public service legal jobs must leave after they gain two to three years of experience, just at the point when they have gained enough experience to provide valuable services to their employers and clients.
• Public service employers report serious difficulty recruiting and retaining lawyers and have vacancies they cannot fill because new law graduates cannot afford to work for them.
These repercussions are not limited to the legal profession. Numerous professions demand advanced and professional degrees but do not provide salaries that reflect the educational debt graduates take on to obtain them. Examples include teachers, medical students who want to help their communities as primary care physicians instead of becoming specialists and, in many cases, government employees.
What are the consequences if graduates forego public service and government work?
For individuals, including some of the most energetic, entrepreneurial, and brightest of every generation, it entails deferring or giving up altogether their dreams of giving back to their communities at a nonprofit, a school, or in government.
On a social level, it means government and nonprofits are unable to recruit and retain people to do public service work. This means that fewer people will be working—to give a few examples—to improve education, preserve the environment, care for the sick and elderly, protect communities as prosecutors and police, or aid the underprivileged as civil legal aid attorneys. When these positions are unfilled, it is ultimately the poorest and most vulnerable among us who suffer the most.
Fortunately, in 2007 Congress passed the College Cost Reduction and Access Act of 2007 (CCRAA). Its two primary components, Income-Based Repayment and Public Service Loan Forgiveness, form the most powerful federal loan repayment assistance program in a generation.
Income-Based Repayment is a repayment plan that can substantially reduce the monthly student loan payments on federal loans. Public Service Loan Forgiveness provides complete forgiveness of any remaining Federal Direct loans after an individual has made 120 qualifying monthly loan payments while working in a qualifying public service position. Working in tandem, IBR and PSLF have the potential to relieve the burden of tens or even hundreds of thousands of dollars in educational debt for individuals committed to public service work.
[Get answers to reader questions about repayment.]
Will CCRAA provide an opportunity for a new generation to engage in higher levels of public service? If CCRAA had been available when you graduated, would it have changed your decision about where to work? And for those of you about to graduate or who have recently graduated, will it enable you take the job of your dreams? Or does more need to be done?
Let us know what you think!
Isaac Bowers is the senior program manager for Educational Debt Relief and Outreach at Equal Justice Works. He was previously an attorney at Shute, Mihaly & Weinberger LLP in San Francisco, where he focused on environmental, land use, and planning issues. A graduate of the New York University School of Law, Bowers also has extensive experience in nonprofit advocacy and outreach.