The Problem: Increasing Debt for New Lawyers
Current law school graduates struggle with an increase in student loan debt from both law school and undergraduate education, along with an increasing salary disparity between public interest and private sector jobs. Individuals who desire a career in public interest may be forced to abandon that goal because of these factors and pursue a private sector position instead.
1. Increased Tuition Leads to Increased Debt
The increased burden of educational debt on new law school graduates is due to higher law school tuition and increased borrowing for undergraduate education. In the last decade, tuition at UW Law School has increased 120% for resident students and 104% for non-residents. The estimated total student budget for the 2006-07 academic year at UW Law School is $44,467 for non-residents and $26,304 for residents. Over three years, the cost of legal education equals over $130,000 for non-resident students.
Over 85% of law school students take out federal loans, as well as private loans, to pay increasing tuition bills. The average law student at UW Law School graduates owing $64,500 in debt, with some students graduating with well over $100,000 in debt.
Given the heavy debt burden most law school graduates carry, those entering the public interest law arena will face serious financial difficulty. Compounding the problem, public interest attorneys enter the workforce with slightly more debt than debt burden, Wisconsin public interest graduates are forced to spend 34% of their income.
The situation in Wisconsin mirrors the rest of the country. The average national salary for public interest lawyers varies slightly according to the type of law. Civil legal services employees earn an average of $36,000. State or local prosecuting attorneys earn an average yearly salary of $44,000. Comparatively, the average starting salary of lawyers in private practice is $90,000. After five years, the average public interest salary increases to $52,000, a paltry increase compared to private sector colleagues. Moreover, the gap between public and private sector salaries is growing. While the ratio of private sector salaries to public interest salaries was 3 to 2 in the 1980s, the ratio is currently 3 to 1. The large salary gap allows private sector attorneys to pay back their educational debt at a faster pace. The debt many law school graduates face may hinder them from pursuing public interest careers.
The Solution: An Effective Loan Repayment Assistance Program
In the past decade, law schools across the nation have taken action to promote and preserve public service law by developing school based LRAPs. For students struggling with mortgage-sized debt payments, LRAPs make pursuing public interest careers a feasible reality by providing vital financial assistance after graduation. LRAPs distribute funding in the form of grants or forgivable loans to graduates employed in public service positions whose salaries are below a designated range. This assistance offsets graduates’ loan repayments and makes it possible for them to sustain a living wage and continue their service to the community.
Currently there are few LRAP options for UW graduates. The federal government’s loan assistance programs are significantly limited for lawyers, especially those entering employment outside of direct government service. The state of Wisconsin has not established a LRAP, and private funding sources such as fellowships are rare. The law school is the most logical and effective source to fill this void in funding.
UW Law School would benefit from an effective LRAP in the following ways:
1. Funding an Effective LRAP Will Enable UW Law School Graduates to Pursue Public Interest Careers
2. Funding an Effective LRAP is Integral Piece of UW Law School’s Commitment to Law In Action
Through its innovative Law In Action approach, the UW Law School fosters the view that “the law is a profession grounded in service to society.” The Law School’s mission is to provide “teaching, legal scholarship, and public service, inspired by our distinctive law-in-action approach and our commitment to justice.” As explained by Dean Davis, “Law In Action reminds us that in teaching and research, no matter how interesting we find a legal theory, we always need to ask, ‘How does this affect people’s lives in the real world?’”
The Law School’s commitment to Law In Action is evident. Many professors develop their courses entirely around the idea of Law In Action. Additionally, by building an extensive clinical program, UW Law School allows students to practice legal skills prior to graduation and, in the process, students interact with Wisconsin residents who have significant legal needs. The Law School provides significant financial support to students who take unpaid summer internships with public interest organizations.
These programs, among others, demonstrate the Law School’s commitment to Law In Action. For students, a result of this pedagogy is a heightened awareness of the problems faced by low-income and underrepresented individuals. Therefore, the Law In Action curriculum often encourages students to enter public interest careers. By funding an effective LRAP, UW Law School would enable students to enter public interest after graduation, and pursue the ideals fostered by Law In Action.
3. Funding an Effective LRAP Supports the Wisconsin Idea
As a state funded institution grounded in the spirit of the Wisconsin Idea, UW Law School plays a unique role in the area of public service. From its inception, the University has been considered a fundamental source of statewide community support and a conduit for public service resources. In recent years, the Law School has transformed the Wisconsin Idea into the “Global Idea- the idea that we serve the university, the local community, the state, the nation, and the world.” The Law School, as a state institution informed by the Wisconsin Idea, has a responsibility to prepare a generation of lawyers to serve the citizens of the state. Wisconsin citizens have unmet legal needs. Not all people can afford to hire an attorney, particularly the burgeoning immigrant population in Wisconsin. A functional LRAP program would enable a new generation of lawyers to enter public service, including non-profit legal aid agencies, and help meet the legal needs of Wisconsin citizens.
4. Funding an Effective LRAP will Satisfy the Desires of Alumni
Alumni want a stronger LRAP. In a recent survey of Law School alumni, in response to an open-ended question, respondents specifically requested that the Law School establish a tuition forgiveness program for public interest lawyers. Additionally, the Public Interest Law Section of the Wisconsin Bar has repeatedly supported the expansion of the current LRAP. If the Law School made fundraising for LRAP a priority, it is likely these alumni would increase their donations. By funding an effective LRAP, UW Law School would foster good will with its own alumni.
5. Funding an Effective LRAP will Increase the Number of Applicants
Prospective students are becoming more sophisticated in their assessment of law schools and consider the availability of LRAPs in their decision-making process. Additionally, law school guides routinely include LRAPs in their evaluations of universities and their financial aid programs. For example, Equal Justice Works recently partnered with Newsweek to create an e-guide which makes it easier for students to compare how supportive law schools are of public interest students, including the presence of an effective LRAP. Wisconsin is not currently listed in the e-guide. By building a strong LRAP, UW Law School will demonstrate its commitment to public service and attract the most qualified public interest students.
6. Funding an Effective LRAP Will Diversify the Student Body
Students of color, first generation and returning students often face greater socioeconomic pressure before entering law school. Therefore, those who wish to pursue public interest careers may need additional support. An effective LRAP would attract students with diverse backgrounds who wish to pursue public interest careers. Without an effective LRAP, these students may choose to attend other law schools with greater debt support.
7. Funding an Effective LRAP Will Provide Positive Exposure for the University
Wisconsin’s Current Loan Repayment Assistance Program is Ineffective
Five years ago, UW Law School dedicated seed money to begin a modest LRAP for graduates who pursue careers in public interest law. Today, the LRAP remains the same, consisting of approximately $25,000 per year of diverted interest on a general scholarship fund. Each year since 2002, the school has divided this sum in the form of one-time grants to qualified LRAP applicants.
1. UW Law School’s Current Loan Repayment Assistance Program
In order to obtain a UW Loan Repayment Assistance Grant, graduates must meet several criteria. First, applicants must submit detailed documentation about law-school related debt as well as a personal statement and résumé demonstrating a commitment to public interest work. Next, applicants must verify that they have obtained “qualifying employment.” This means they must have a legal position with a non-profit organization or local, state, or federal government agency. Graduates who accept judicial clerkships or public interest jobs outside the non-profit and government sectors are not eligible for grants. Finally, applicants must show that they receive a “qualifying salary.” In order to receive a grant, applicants must have an annual salary (including bonuses and non-cash benefits such as housing) of $38,000 or less. In some cases, however, applicants may receive a reduced grant if their salary exceeds $38,000. The current program allows graduates almost one full year to secure qualifying employment. Students who graduated in 2006 do not need to submit employment verification until April 2007.
Once the LRAP Committee has determined the eligibility of applicants, committee members calculate how to divide the $25,000. The grants funds are divided so that each recipient receives an equal number of monthly loan payments. Therefore, a graduate who has a higher monthly loan payment will receive a larger grant than one who has a lower payment. If too many applicants are eligible, resulting in grants that are less than two monthly loan payments, the LRAP committee will disburse the funds based on demonstrated financial need.
2. The Drawbacks of the Current Program
With only $25,000 available each year, the current LRAP only provides assistance to graduates only during the first year after they finish school. Most graduates face ten or more years repaying law school debt. Furthermore, the distributed grants that are distributed are small. Furthermore, the distributed grants are small. Since 2004, the grants have ranged between $845 and $2,507. If the number of qualifying graduates increases, each participant receives a smaller payment. While any assistance repaying loans is appreciated, these amounts are only a drop in the bucket when compared to high debt burdens law school graduates face.
Wisconsin’s Competitors have Responded to Increasing Debt by Developing Well-Funded Loan Repayment Assistance Programs
UW Law School has fallen behind its peers. Law schools ranked both above and below Wisconsin have established successful LRAPs. The only peer institutions that do not have LRAPs are the University of Washington, George Mason University, Indiana University- Bloomington, and the University of Florida. LRAPs are available at every other peer school ranging from the nineteenth-ranked law school to the law school ranked forty-third. Five of UW Law School’s major competitors have effective programs: University of Minnesota (ranked 19th), University of Iowa (ranked 22nd), University of Illinois-Urbana Champaign (ranked 27th), Fordham University (ranked 32nd), and University of California-Davis (ranked 34th). In addition, the only other law school in Wisconsin – Marquette University – has a LRAP that is more effective than UW Law School’s. By establishing a fully-funded LRAP, UW Law School can better compete with its peer institutions.
University of Minnesota
The University of Minnesota is unique because it participates in a state-wide LRAP operated by LRAP Minnesota. The LRAP is funded by donations from the area law schools, firms, and attorneys. The law schools donate all proceeds from the annual “5k Race for Justice” to the LRAP. The salary cap to receive funds from the program is $45,000. Awards are calculated based on a formula that considers adjusted household income and debt load. During the 2005-06 academic year, the average award was $4,380. Qualifying employment includes non-profit, governmental, or international organizations, and Native American tribal agencies. However, preference is given to applicants who provide direct legal services. Recipients are eligible to receive awards for up to fifteen years.
University of Iowa
The Iowa LRAP has many positive components to consider when building a LRAP model. If students need to take out a loan above the maximum federal loan amount, Iowa will give the students loans through the Iowa Law School Foundation. Twenty-five percent of these Foundation loans are forgiven after one year in qualifying employment. After the third year of employment, the entire remaining balance is forgiven. The salary cap is 125% of the standard maintenance allowance set by the U.S. Office of Personnel Management. The allowance accounts for increases in living costs for people located in “high cost” communities.
University of Illinois-Urbana Champaign
Similar to the University of Minnesota, the salary cap at Illinois is $45,000 and eligible employment includes full-time law-related jobs at either non-profit or governmental organizations. No maximum award exists because the amount awarded depends on a formula based on income, the cost of living, and debt burden. The school gives each program participant a forgivable LRAP loan. Students pay off their law school loans with this LRAP loan. After three years in a qualifying public interest position, 25% of a recipient’s LRAP loan is forgiven. The loan continues to be forgiven at a rate of 25% per year. The loan is 100% forgiven after six years in a qualifying position.
Fordham University
Fordham has a generous LRAP. The salary cap for recipients is $52,000. However, eligible employment is restricted to non-profit organizations. The maximum amount awarded is $8,700 total when the qualifying income is $41,000 or less. If a participant earns above $41,000, the LRAP loan is adjusted. Public interest lawyers can receive payments for up to five years. Loan forgiveness begins after one year.
Fordham also operates a separate Loan Forgiveness Program for graduates who borrowed from its Revolving Loan Fund. Participants of the Loan Forgiveness Program must have a qualifying income below $59,000 and work in government or public interest. The interest-free loans begin to be forgiven at a rate of 33% each year after three years of participating in the Program.
University of California-Davis
UC-Davis’s LRAP has a low salary cap of $40,000. Eligible employment is limited to non-profit organizations. No maximum award is stipulated. Awards are distributed in the form of interest-free loans. Beginning the third year of qualifying employment, loans are forgiven at a rate of 25% per year.
Marquette University
No comments:
Post a Comment