Loan Repayment Plans Make Public Interest Careers Feasible

The opportunity for lower payments and loan forgiveness could help graduates.

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Students in accelerated law programs, unlike traditional students, have only one summer for internships and clerkships.
Students in accelerated law programs, unlike traditional students, have only one summer for internships and clerkships.

Your Student Loan Ranger read with concern Staci Zaretsky's article, "As Law School Costs Skyrocket, Is It Still Feasible To Pursue A Public Interest Career?," published on October 18 on Above The Law.

We don't disagree with many of the article's points—it's always been difficult to survive on a public interest salary, law school is extremely expensive, and the temptation to join "Big Law" has always been present for the small percentage of students offered those jobs.

But the Student Loan Ranger disagrees that a career in public interest law is not viable; particularly for lawyers who graduated over the last five years, a combination of Grad PLUS loans, income-driven repayment plans, and Public Service Loan Forgiveness has made a long-term public interest career more financially feasible than ever before.

Law students (and other graduate and professional students) interested in public interest careers should use Grad PLUS loans to cover what remains of their expenses after their grant aid and federal direct Stafford loans have been used up. This means they'll only be using federal loans, which have important borrower protections and access to the full panoply of federal relief options.

[Read more about loans for graduate students.]

Those options include income-driven repayment plans, including Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), and Pay As You Earn. (The latter will be available December 21, thanks to early implementation by the Department of Education.)

IBR— the best option most law school graduates are eligible for—limits the amount borrowers pay monthly to 15 percent of their discretionary income.

Even better, ICR, IBR, and Pay As You Earn are qualifying repayment plans for Public Service Loan Forgiveness (PSLF), which provides forgiveness after 120 monthly payments (10 years' worth) made while working full time at any of a broad range of qualifying jobs, including 501(c)(3) nonprofits and for federal, state, local, and tribal governments. The upshot is that attorneys dedicated to public interest careers can make 10 years' worth of low monthly payments and then apply for forgiveness.

[Explore funding opportunities for public service work.]

The Student Loan Ranger often uses Dara Defender as an example. Dara graduates from law school with $120,000 dollars in eligible federal debt and takes a job as a public defender earning $45,000 annually. In IBR, her monthly payments will initially be about $353 per month. Assuming yearly raises of 3 percent, this will grow to $461 per month by her 10th year. When she applies for PSLF, she will have paid approximately $48,570 over 10 years, and $151,133 will be forgiven.

Contrast this to the financially unpalatable options that earlier generations of attorneys faced. If Dara attempted to repay her loans in a 10-year repayment plan, she would pay around $1,381 per month (probably not affordable on her salary) and $165,716 total. Repaying over 30 years would require Dara to pay $782 per month (more than she would ever pay in IBR) and $281,632 total.

Above the Law is correct that those options often make law grads, even the most dedicated, think twice about public service. But available relief options help keep that door open.

In addition, as the article notes, some law graduates will be eligible for loan repayment assistance programs (LRAPs) that provide funds to help them make their monthly payments through their law school, employer, bar association, or state and federal government.

[Read more about LRAPs.]

The Student Loan Ranger certainly isn't pretending these programs are panaceas. Living long term on a public service salary is plenty tough, even with income-driven repayment, and we would like to see employers raise salaries. There are jobs that don't qualify for PSLF, including working at a labor union. There are many more law school LRAPs than there were 10 years ago, but the Student Loan Ranger still doesn't think there are enough, and many have limited funds.

Nonetheless, the fact is that attorneys lucky and skilled enough to find public interest jobs, tough enough to dedicate their career to them, and smart enough to plan ahead can do a lot to ensure they are not in the "extremely perilous financial situation" the article describes. If you are, or want to be, one of them, take advantage of the comprehensive resources Equal Justice Works has to help you, including our website, free webinars, and new eBook

Isaac Bowers is a senior program manager in the Communications and Outreach unit, responsible for Equal Justice Works' 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.