Student Debt Relief
HOPE APPEARS ON THE HORIZON
By Michael Pellicciotti
Mike Pellicciotti, a deputy prosecuting attorney for King County in Seattle, is the ABA YLD Membership Director for 2007–08. He can be reached at MichaelP@abanet.org.
For the past decade, the American Bar Association Young Lawyers Division has advocated for student debt relief for new attorneys. Congress is now taking action.
Last May, the U.S. House of Representatives passed the Prosecutors and Defenders Incentive Act. It provides partial loan forgiveness for attorneys who commit to practicing criminal law through public service for at least three years. Prosecutors and public defenders are eligible for the program.
ABA Immediate Past President Karen Mathis said in a press release, “Under the current system, lawyers often are forced to leave such public service for higher paying positions in law firms or other venues, meaning that lawyers who do remain are stretched thin and must assume considerable case loads.” She added that “[i]n addition to such strain on the individual lawyers and family, this threatens the administration of justice and the very fundamentals of our nation.”
The bill now goes to the U.S. Senate, where Sen. Dick Durbin (D-IL) is sponsoring its companion bill. Both the House and Senate legislation allow eligible attorneys to receive up to $10,000 per year for debt relief. The maximum total benefit is $60,000, which is allocated on a first-come, first-served basis. The relief applies to all student federal loans.
The ABA YLD also supports other broader legislation being considered by Congress. Sen. Ted Kennedy (D-MA) is sponsoring the Student Debt Relief Act of 2007, which is currently in the Health, Labor, Education, and Pensions Committee. This act would forgive the balance of loan debt for attorneys who practice in the public sector for ten years. It would establish a tax credit for student-loan interest payments and apply to many government workers, including nonlawyers. The bill defines public-sector attorneys broadly and includes those who practice in government and public-interest legal services.
When introducing the bill to the Senate earlier this year, Sen. Kennedy said, “It’s obvious we need to act immediately to make both college costs and student debt more manageable—and that is what this bill is all about.” “The Student Debt Relief Act will help lift the financial yoke that burdens our students and families as they try to pay for college,” he said.
The loan-repayment bills passed and considered this year are not the first types of debt-relief legislation that the ABA has advocated for in Congress. In 2004, Congress created the first federal pilot program for loan-repayment assistance programs (LRAPs) by funding of the Legal Services Corporation (LSC). LSC-funded agencies were able to provide loan repayment assistance to qualifying attorneys. YLD leadership lobbied Congress for this legal services bill. As a result of the bill’s passage, a number of states have started LRAPs to help reduce debt for newer attorneys.
State LRAPs have existed for several years. Twenty states operate LRAPs: Arizona, the District of Columbia, Florida, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oregon, Texas, and Washington. Other states considering LRAPs include California, Iowa, Pennsylvania, South Carolina, and Vermont.
Many of these LRAPs are funded through state legislative appropriations and private dollars. Other LRAPs receive funding through the Interest on Lawyers Trust Accounts (IOLTA). IOLTA dollars are used primarily for maintaining quality legal-aid funding, but they are often collected and allocated by state bar foundations and can serve as a funding source to begin or support a state’s LRAP.
The YLD is committed to supporting these and other methods to relieve student debt burdens on its members. It lobbies Congress annually at ABA Day to support related legislation consistent with YLD policies created by the YLD Assembly. The next YLD Spring Conference will be held in conjunction with ABA Day in Washington, D.C., April 16–19, 2008.
 
 

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