President signs loan forgiveness bill
advocated by ABA

Late last month, President George W. Bush signed H.R. 2669, the College Cost Reduction and Access Act of 2007, into law.  Among the provisions of the law is the income-based repayment program for public service, for which the ABA has strongly advocated for several years.

Under the program, borrowers of student loans who are working in qualified public service would repay loans at an affordable percentage of their income and, after 10 years of service, would have the balance of their loans cancelled.

 "It is in our interest to invest in those who serve the public," stated ABA President William H. Neukom in a prepared statement. "Today’s signing into law of the College Cost Reduction and Access Act is an important first step in helping those—including lawyers—who choose a career in public service, by giving them new tools to cope with crushing educational debts.  It will help our nation’s best and brightest pursue public service jobs in the law and in other fields."

The provision was one of the recommendations of the ABA Commission on Loan Forgiveness and Repayment Assistance, which was formed in 2001.

The average law school student graduates with nearly $80,000 of debt just from law school. Given the average starting salary of a public interest lawyer is roughly $40,000, loan repayment can claim 40 percent of a borrower's take home pay.  Naturally, this forces many to leave public service for higher paying jobs.

Under the new income-based program, monthly payments are capped at 15 percent of discretionary income.

The law includes prosecution and public defense, as well as "legal advocacy in low-income communities at a non-profit organization."  In addition to lawyers, other public service jobs are included in the new law, P.L. 110-84.  Many of the provisions took effect Oct. 1.

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