EDUCATIONAL DEBT RELIEF
EDUCATIONAL DEBT RELIEF
EDUCATIONAL DEBT RELIEF
Because the burden of educational debt presents a formidable barrier to the pursuit of a public interest career, Equal Justice Works? provides expert advice to students, graduates, law schools, and public service employers on benefits available under the College Cost Reduction and Access Act of 2007 and in utilizing, creating or improving Loan Repayment Assistance Programs (LRAPs).
The Impact of Debt
Nearly all students borrow to pay for school. College seniors who graduated with student loans in 2011 owed an average of $26,600 according to the Project on Student Debt. The average amount borrowed for law school is $124,950 for private law school graduates and $75,728 for public school graduates (ABA Legal Education Statistics for the academic year 2010-2011). On a standard 10-year repayment plan, a borrower with $100,000 in total debt ($80,000 for law school loans plus $20,000 for undergraduate loans) would have to pay more than $1,150 per month at an interest rate of 6.8 percent.
Meanwhile, the median salary for entry-level public interest lawyers (including legal services attorneys and public defenders) is $45,000 (National Association for Law Placement 2012).
The College Cost Reduction and Access Act of 2007 (CCRAA) created a historic Public Service Loan Forgiveness program (PSLF), offering loan forgiveness after 10 years of qualifying public service employment. The CCRAA also offers federal student loan borrowers with high debt relative to their income an opportunity for lower monthly student loan payments through a new repayment plan ? Income-Based Repayment (IBR). School, state, and employer-based Loan Repayment Assistance Programs (LRAPs) continue to provide a needed complement to the benefits available under the CCRAA.
Income-Based Repayment Income-Based Repayment can substantially reduce monthly student loan payments for borrowers with high debt relative to their income. Typically, borrowers who earn less than they owe in federal student loans will be eligible to choose IBR. For most borrowers, IBR loan payments are less than 10 percent of their income. For example, a typical recent law graduate owing $100,000 in federal student loans and earning $60,000 would pay approximately $541 per month under IBR ? less than half the monthly payment under a 10-year repayment plan.
Public Service Loan Forgiveness The Public Service Loan Forgiveness program created by the CCRAA encourages individuals to enter and continue full-time public service employment.
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A borrower who makes 120 separate qualifying monthly loan payments (which need not be consecutive) on eligible loans while working in qualifying public service employment can earn substantial loan forgiveness. For example, a public interest lawyer with average student debt and an average public interest salary can make income-based payments for 10 years and earn more than $100,000 in tax-free loan forgiveness!
To qualify for Public Service Loan Forgiveness, a borrower must: 1. Make the right kind of payments; 2. On the right kind of loans; 3. While working in the right kind of job; 4. For 120 monthly payments.
Loan Repayment Assistance Programs (LRAPs) LRAPs enhance the capacity to attract and retain desirable students, cultivate a diverse student body, preserve career choices for law graduates and assist public interest organizations in recruiting and retaining public interest lawyers ? thus contributing to a more just society. Equal Justice Works is considered the national expert on LRAPs and is leading the campaign for law schools to create and improve support for students entering public service.
Equal Justice Works' Educational Debt Relief Program Equal Justice Works offers user-friendly information on educational debt relief programs to help you understand and manage educational debt. This includes:
New Ebook: Take Control of Your Future: Equal Justice Works' new ebook is now available in the Kindle Store! Take Control of Your Future is a comprehensive guide to educational debt and relief programs, so you can manage your educational debt and take control of your future!
An Online Educational Debt Relief Resource Center: Find comprehensive information on available relief programs at , including Income-Based Repayment, Public Service Loan Forgiveness and Loan Repayment Assistance Programs.
Monthly Webinars: Equal Justice Works hosts monthly webinars for prospective and current students, graduates and school advisors and administrators.
Visits to Your School or Office: Our educational debt relief experts are available to present at your school or office so that your students, employees and colleagues know how educational debt relief programs can help ease their student debt burden. We are also available to provide guidance on creating or revising loan repayment assistance programs
Student Loan Ranger Blog: Equal Justice Works' educational debt relief experts provide guidance and answer questions through this weekly U.S. News & World Report blog.
Contact: DebtRelief@
Equal Justice Works provides this information for educational and informational purposes only; it is not intended and should not be construed as legal advice. Educational debt relief programs are not automatic, and borrowers must take specific actions in order to benefit. Equal Justice Works provides free resources to help borrowers. For additional tools and information, please visit .
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