The Student Loan Ranger's Mailbag Express: Public Service

You can change the world and opt for a public interest career, even if you have student debt.

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Going to law school today means you are going to borrow money—a lot of money— and it is not a decision to take lightly. Here at Equal Justice Works, we also believe that you can commit to a public interest career despite the burden of educational debt. In fact, generations of attorneys, doctors, social workers, and members of countless other professions have spent their careers in public service, and many of them made great financial sacrifices to do so.

[Read about how the ABA is addressing law grads' job and debt woes.]

That's why we get a bit riled up when we see articles like this recent one by Penelope Trunk on CNN.com. We'll only address the author's second point, which is that you can't "join a non-profit and change the world" after law school because your loans will force you to join a big law firm and you're not likely to leave once you have gotten used to the lifestyle.

Setting aside the fact that most law school graduates don't end up working at big law firms, the reality is that the passage of the College Cost Reduction and Access Act (CCRAA) in 2007 has made it far easier for graduates, in law and in any other field, to pursue a public interest career. It's still not easy—at a minimum you should factor cost into your choice of college or graduate school, minimize costs, maximize your federal loans and understand how Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF) work—but it is eminently doable.

[Learn more about borrowing for graduate school.]

If you want to learn more about how Income-Based Repayment and Public Service Loan Forgiveness work, register for our free October 14 webinar, "Drowning in Debt? Learn How Government and Nonprofit Workers Can Earn Public Service Loan Forgiveness."

The following E-mail illustrates the struggles earlier generations of public interest attorneys faced and the importance of taking out federal loans so you can utilize IBR and PSLF. As always, our responses are not meant to provide specific legal or financial advice. Your situation is unique, and we encourage you to reflect carefully on your options and to consult a financial adviser.

Dear Student Loan Ranger: I am an attorney working in the federal government, with a very large debt load from law school. I graduated from law school in 2004. Do IBR and PSLF take private educational debt into account? The IBR calculator on the Department of Education's website appears to completely ignore payments I must make on private loans and therefore thinks that I can pay more than $1,000/month toward my federal loans, which is impossible for me.

If that is correct, is there anything else available to help those of us with massive private loan debt? I do not qualify for loan repayment assistance from my law school. I have had to put my federal loans on a 30-year repayment schedule. I have been trying to pay down my private loans as much as I can. The variable interest rate reached 12 percent to 13 percent a few years ago, so for the first few years I was out of law school, I was barely paying enough to cover interest. Any information you can provide regarding any programs that could help me would be much appreciated.

Dear 2004 Graduate: You are correct that the federal relief programs do not include private loans in calculating your monthly payment under IBR. As a result, many people who have large amounts of private loans cannot afford to be in IBR.

Private loans are also not eligible for Public Service Loan Forgiveness and there are no standard forgiveness or relief programs for private loans. Because the government does not own this debt, the repayment terms and options are at the discretion of your private lender.

Although you do not qualify for your school's loan repayment assistance program (LRAP), there are also LRAPs available from states and the federal government that may be able to provide funds to help ease the burden of repayment. Eligibility for these programs depends on the type of law you practice and the services you provide. Many nonprofit and legal services organizations also provide LRAPs for their employees. You can find out more about LRAPs on our website.

As this E-mail illustrates, repaying private student loans on a public interest salary can be extraordinarily difficult. Fortunately, the new Grad PLUS loan now makes it possible for graduate students to pay for school using only federal loans. Unfortunately, many students are not maximizing their federal loans before taking out private loans. If you want a public interest career, don't make that mistake.

[See 6 advantages to federal student loans.] 

Finally, we've had a few questions recently about two federal LRAP programs, the John R. Justice Student Loan Repayment Program (JRJ) for state and federal public defenders and state prosecutors and the Civil Legal Attorney Assistance Repayment Program (CLAARP) for qualified civil legal assistance attorneys.

The JRJ application deadline for this year has passed. The program is administered by the states, so if you have questions about funding you were awarded or obtaining paperwork such as an employment verification form, contact the administrator in your state. See the most up-to-date list of state administrators we have.

Funding has been eliminated for CLAARP, but if you received notification that you were selected for an award, you must still fulfill your service commitment. You should have received a certification form from the Department of Education in early September. The form will not be posted online. If you have not received it, or if you have other questions, call 877-699-1834 to get information.

That's it for the updates. Make sure you have the latest educational debt information by subscribing to our Twitter feed and following us on Facebook.

Isaac Bowers is a senior program manager in the Communications and Outreach unit, responsible for Equal Justice Works's educational debt relief initiatives. An expert on educational debt relief, Bowers conducts monthly webinars for a wide range of audiences; advises employers, law schools, and professional organizations; and works with Congress and the Department of Education on federal legislation and regulations. Prior to joining Equal Justice Works, he was a fellow at Shute, Mihaly & Weinberger LLP in San Francisco. He received his J.D. from New York University School of Law.