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An American Bar Association Midyear Meeting presentation on Feb. 7 in Chicago provided an overview of the benefits that public interest jobs offer, including the financial benefits associated with student loan forgiveness. The presentation, “Public Interest Jobs: A 10-Year Path to Being Debt-Free and Feeling Fulfilled,” featured Tim Shortess of Groupon and Andrew VanSingel of Prairie State Legal Services.
VanSingel, who started at Prairie State Legal Services in May 2010, runs its low-income tax clinic. “It’s very good work and very satisfying,” he said. “You are working with people with legitimate legal problems and no one to help them.”
He noted with pride the stack of thank-you cards he gets that motivates him when he has to work late nights. “You’re not just churning away hours to make money for someone else,” he said about working a public interest job. “It’s very special. The type of work you get to do is worthwhile.”
Significantly, it also carries with it financial benefits. Shortess covered the basics of the Income-Based Repayment Plan.
You have to apply for the plan, he said, which is set up to be affordable. “It’s based on your income,” Shortess said. “Payments are less than what would be required under the standard 10-year payment plan.”
Qualification for the program is based on family size and adjusted gross income, he explained. “Every year, your adjusted gross income is reviewed to determine your payment,” Shortess said. “If your income increases, the loan servicer will adjust your monthly payment.”
The goal, he said, should be to reduce your adjusted gross income. Ways to do that include contributing the maximum amount to your 401(k) and deducting health savings account (HSA) expenses, moving expenses and capital losses.
“You really need to learn how your tax returns work,” advised VanSingel, in order to maximum deductions and reduce your loan payment.
VanSingel reviewed the Public Service Loan Forgiveness Program, an initiative established to encourage people with otherwise burdensome student loan debt to enter public service full time.
To qualify for the program, you must have a balance on qualifying loans, you must make 120 qualifying payments after Oct. 1, 2007, and you must be employed full time by a public service organization, such as a 501(c)(3) or a government entity.
VanSingel noted that legal aid jobs are in demand because of the money you can potentially save from the loan forgiveness program.
The panel was sponsored by the ABA Young Lawyers Division.